Matt and Micah break down the importance of resolve and consistency when considering account minimums.
To frame the content of this episode, let us just briefly explore the idea of account minimums:
You are required to charge your clients a baseline fee to make payroll, keep revenue in an upward spiral, and to ensure the longevity of your firm. In a similar light, you wouldn’t take on a client who won’t bring a predetermined amount of guaranteed revenue to your practice.
This is obvious and simple but so difficult to stick to.
The soft and hard minimums you set up as a baseline for your entire practice are the foundation for your entire firm.
But as Matthew attests, once you set your minimums, the universe, some higher-power, future clients, you name it will test your resolve on the amount of money they think they actually need in revenue to work with you.
And in this episode, Matt and Micah provide you with anecdotes, examples, and ways of sticking to your baselines for finding ideal clients, as well as maintaining the integrity of your practice.
A few of these concepts are briefly discussed below.
The Pitfalls of a Hybrid Firm
When talking about minimums and fees, pro bono instances may come up in your practice. There will be referrals from good friends, family members, or those who are in emergency situations that will want a discounted rate.
As Matt and Micah stress, there is nothing wrong with philanthropic work at all!
They have done their fair share of pro bono work for clients and have kept lower rates for those who have been with the practice longer. But there are very legitimate risks for having a firm that is a hybrid of high-and-low rates: that is, the majority of clients pay the full rate while some get discounted rates due to myriad reasons.
Sticking to a fixed fee, never dipping below at least the minimums you have in place, and then limiting the pro bono cases to very rare instances is extremely important to keep in mind.
You run the risk of spreading yourself a little thin if you are devoting time and energy to pro bono cases that aren’t growing the revenue of your firm.
Remember, the ability to bring massive value to your clients presumes you have enough revenue to reinforce the entire operation. It is a feedback of value that needs to have the proper inputs for a consistently quality output.
Don’t be Afraid of No!
One of the biggest mistakes that Matt and Micah notice with other advisors is they equate any business with good business. You think, yeah, maybe I can waive the minimum I have in place because my practice will look really impressive with X many number of clients…even if the revenue is nowhere near the goal.
Don’t be afraid of saying no, and of waiting for the client (they are assuredly out there) who fits your measurements and goals.
And don’t forget this other very important reason for learning how to say no:
Sometimes a prospective client just won’t mesh well the values and core beliefs of your practice.
That’s completely understandable and inevitable. But the sooner you stay in control and cultivate the resolve and consistency to stick to your minimums, the quicker your enterprise will grow to be all that it can be.
Listen along for mistakes that were made by Matt and Micah in their own practice, as well a much more thorough explanation of these concepts within the episode itself. This blog post barely scratched the surface!