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Mathematical Proof Specializing Will Make You a More Profitable CPA
I am here to offer you mathematical proof that different is more profitable.
The best possible strategy to becoming more profitable without having to work so hard includes specializing.
A few weeks back, a well-known software developer turned consultant named Jonathan Stark invited me to be on his podcast, Ditching Hourly, so we could discuss other ways to bill forensic accounting. And it was in our conversation that he dropped this equation that I want to share with you.
Here is the max price formula that proves that specializing will make you more profitable:
Desire x Buying Power / Availability of Options = Max Price
Let me give you some good news and some bad news.
The bad news is that making yourself different is among the hardest and most necessary gates to pass through on your path to becoming a highly compensated CPA.
Now, the good news. Because this gate is one of the hardest ones to get through, very few people actually get through it. Many people try, but they either get lost or they run out of steam, or they don’t see it through.
If you are willing to come in and see it through to the other side, you will find that you are in small, great company.
So if you have the courage to commit to the process of specializing, which really only takes about six months, you will cut the number of options your prospects have down to such a small number that you will be able to bump up your max price by a factor of three or five or even eight or more.
If you want to work on upping your max price, here are some initial steps you can take:
- Run through your client roster, and note which clients are in a lot of pain.
- Then look at their buying power. Which of your clients are best positioned to invest with you more deeply? Conversely, which ones do you know will never have the buying power to work with you in a way that lines up with what you want your business to be doing?
- Finally, look at how many CPAs around you look just like you in a white press button-down shirt who do all things for all people.
Look inside your client roster and leverage the types of businesses you already have as clients to begin the process of specializing. So that you can look different from the white shirt CPA next to you, who specializes in serving everyone and no one at the same time.
Remember, specializing is a process. It takes three months just to see if you’re getting traction. It takes six months to know for sure if your specialty is working. But if you commit to an industry that is specialized enough, and you give it time, you will get there and you will reap the rewards of being able to maximize your price.
And when you maximize your price, you will be able to work with fewer clients. And when you can work with fewer clients, your business gets simpler. And when your business gets simpler, you don’t have to work as many hours.
There you have it – mathematical proof that different is more profitable.
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