One big mistake in the approach to Practice Growth
Mistake: structuring practice work around client projects
Why Projects kill Profits
In theory, the project approach should work. It means upselling clients into larger services and digging deep to find solutions to individual problems.
However, the reality is different, and all too often, projects mean lost time, frustration and creeping costs:
- cost blow outs – scope creep & time overruns. Reluctance to bill for the actual time spent, for fear of client reaction.
- The team doesn’t always know what to do. This holds up work progress whilst everyone waits for you to work out a problem.
- partner fatigue – you spend your day solving a myriad of minor project issues, answering team queries and end the day exhausted & wondering what you achieved.
The Solution to Unprofitable Projects
If you’ve found yourself cutting time from client invoices or shaking your head over unbillable hours, there is a solution that can unlock the growth of your practice.
The answer is to bundle your services into set packages & products. These are presented to clients as defined service offerings that deliver solutions to their specific problems, and are delivered as repeatable processes by your team.
What Packages and Products should look like
For the sake of implementing these in your own practice, I’m going to explain the difference between ‘packages’ and ‘products’.
Packages are a bundle of services that when offered all clients will select one. ie the ‘Compliance Basic’, ‘Compliance Plus’ or ‘Compliance Business’ packages. (Every firm will have its own definition of packages they wish to offer).
One of my firms offers ‘Compliance Plus’ as the minimum service offering, ‘Business Advisory’ as the main stream and a ‘CFO based package’ as the upper package (this service has a starting price of $5,000 a month).
Packages come in different levels. It’s possible that one Client’s ‘Compliance Basic’ package could be a few thousand dollars whilst another client’s might be $20,000. Your levels will depend on your Client’s demographics, structure and volume of work. the main point is, it doesn’t matter what pricing level, all clients on the package all get the same deliverables, ie financial statements and tax return.
Products are a value adding service that meets a specific need within the client base and matches the skills within the team. ie. the Family Board (click here to read previous TA)
By defining your service offerings in this way it forces the practice to focus on and adhere to systemisation. Since the products are positioned as the solution rather than individualised projects, repetitive delivery enables automation.
This then becomes a way of life for the team and clients. In the words of great business pioneers, (Theodore Levitt, HBR 1976) industrialisation occurs within the business. In fact, Industrialisation is the real secret behind this approach, because it enables a production line, which leads to greater effectiveness in delivery of profit.
How to implement Products and Packages in your business
Whilst it may be easy in theory, transitioning your practice to a Package and Product model can be difficult. Here are some simple to steps to help you get started:
- Rearrange your menu of services and/or FPA service list into commonly used services list that can be packaged. Do the same for process for value add service product offerings.
- Create a one page brief for each Packages & Products, this will create clarity on how you articulate each one to clients and is also a great ‘leave it with them’ flyer.
- Categorise your clients into potential Packages and Product users – download my farming for client opportunity spreadsheet, 26Group_Farming for Client Growth Spreadsheet
Moving from project based work to a Package & Product Model is just one step that I coach my ‘Practice Accelerator’ Partners through.