Some companies are vital.
Others…. Not so much.
In the 1940’s Joseph Juran coined the term the “Vital Few and Trivial Many”.
This term came about after Juran continued the work on the 80/20 rule originally brought to us by Pareto…
Pareto observed that 80% of Italian property was owned by 20% of the Italian population.
This principle can also be applied to the fact that 80% of your income comes from the 20% of your high value clients.
And 20% of your time produces 80% of your results.
Which means that this rule can be an incredible tool for growing your Accounting/CPA firm.
What you need to do is figure out which 20% of your activities will produce 80% of the results you want. Likewise, by identifying which 20% of your clients (who represent 80% of your revenue) you can go out and find more customers like them, dramatically growing your revenue and profits.
If you then take these 20% of clients and apply the 80/20 rule again, you will see that the top 20% of your 20% of your clients (or the top 4% overall) represent 64% of your sales.
Now these are the customers that you need to find more of.
Higher revenue, fewer clients. This equals freedom.
A nice idea, but how easy is this to achieve?
Well, we know that the 80/20 rule can be applied to pretty much everything in life. Which means that there are 20% of accountants being vital, and… 80% not so vital.
So, this means you are at a crossroads. You can keep on doing what you have always done, or you can make yourself vital.
The Good News
In 2017 I carried out a survey of the accounting profession. After spending 2 years analysing the results and speaking with hundreds of accountants from around the world I have determined there are 5 distinct characteristics that make a VITAL accountant. These are:
considered to be important or beneficial; cherished.
having a major impact or effect.
regarded as reliable or truthful.
able to move quickly and easily.
producing a great deal of profit.
These 5 characteristics result in you being a VITAL accountant.
absolutely necessary; essential.
How Do You Become Vital?
To become a VITAL accountant you have to go through a number of stages. You can dabble and go the long way (we recommend against it) or you can jump straight to becoming VITAL.
These are the four stages:
Work with anyone | Do all things | Compete on price
Work with a Hunting Niche™ | Do all things | Less price sensitivity
Niche specific solution | One type of client | Higher average fees
Specialist | Sought after | Higher revenue | Fewer clients
Most practice owners unfortunately sit in obscurity. They run a commoditised practice, compete on price and work all the hours under the sun. They don’t enjoy working in the practice and are frustrated with their team and their clients.
At the other end of the spectrum, a select few are VITAL. They achieve this because they are Valued, Impactful, Trusted, Agile and Lucrative.
The VITAL Accountant/CPA
A Vital Accountant/CPA has all the luck.
They attract the best opportunities.
They hire the best staff.
They get the best clients.
They make the most money.
They win all the awards.
They have all the fun.
If you want to be VITAL it is your job to make it happen.
Over the coming weeks I will be sharing a series of articles on how to become a VITAL accountant. If you haven’t already… make sure you connect with me here on LinkedIn, and join me and over 1500 other practice owners in my Facebook group Marketing For Professional Advisors.