Cultivating a Sales Mindset with Mike Meilinger

The Modern CPA Success Show: Episode 99

Tom (00:00:17) - Welcome to our episode of the Modern CPA Success Show. I'm Tom Wadelton. I'm a virtual CFO with Summit CPA Group. We're a division of Anders. I'm joined by my co-host Adam Hale, who is a founder of Summit CPA Group and is now a partner with Summit. Adam, welcome.

Adam: Thanks, Tom.

Tom: And our guest today, whom you're going to be hearing a lot from, is Mike Mellinger. Mike founded his own company, specializing in consulting and CPA practices. So Mike, welcome to our podcast today.

Mike (00:00:44) - Thank you. It's an honor for you guys to have me here. I'm a big fan of Summit CPA. You guys have taught me a lot and helped me a lot with my practice. I'm very thankful to be on the show. Appreciate it. Thank you.

Tom (00:00:55) - Thank you. Do you want to tell us a little bit more about yourself and your firm to kind of help set a foundation?

Mike (00:00:59) - Yes. A little about myself that makes me a little different from most CPAs is that I actually did what most people do. I started a firm out of my house, gosh, back in 1997. And I grew the firm, partnered with people. In the first week, I worked a hundred hours, first year I worked 120 hours a week, probably made $20,000, slowly built the firm up to probably about $600,000 or $700,000 in revenue. But we hit what every CPA firm does. We hit the grind. And the grind is where, gosh, you're getting clients, you're losing clients, and it's really because you're just taking everything, right? If they breathe, you're taking them as a client, you're writing off bad debt and doing stuff. So I got real frustrated with that, and I got so frustrated with it. At the same time, I made a little money investing in real estate.

Mike (00:01:46) - I sold the practice, luckily for me, the great recession came. So all the money I made in real estate, I lost. And I had to really focus on a litigation practice. So from about 2000, I signed a five-year non-compete. So from about 2006, I believe when I sold it, to about 2011, I just did litigation support, business valuations, forensic accounting, got some good relationships with attorneys. But I realized it was really a terrible business if you wanted to build a business because litigation was very, "Hey, let me sell it, let me do it, let me bill it, let me collect it." And everything was myself. In fact, one of my attorneys, who's one of my largest clients now, always said, "Mellinger, when I first met you, you said you were never gonna have another employee again, and now you have 20, 22 employees." And I was like, "Yeah, that model did not work for me because I don't like it."

Tom (00:02:42) - That's right. So...

Mike (00:02:43) - Around 2010 and 2011, we started a CPA firm, and the greatest thing we ever did was, I was looking at this thing called accounting sales. And you paid them like 50 or $60,000, and they would hire salesmen and they'd go in and they would build you a firm. And at the same time, someone had told me about Strategic Coach, which I know you guys are big fans of Dan Sullivan, who isn't? And me and my wife went to this sales thing in Philadelphia, and it was like, "Hey, you can come one day, and if you decide you don't want to do it, we'll give you your money back." And I went there, and my wife was really excited. I mean, we had to drive at that time, she wouldn't fly, so I had to drive from South Carolina to Philadelphia. And I was like, "I'm not doing that because that sounds exactly like the firm I just sold, and I don't want to do that." So instead of doing that, I went to Strategic Coach, and it was at that time we started our practice. So, since then, our practice has grown, and we have currently 21 people in our firm. We roughly do about $3 million in revenue, and we've been growing on average, I want to say 24% a year since we went through Strategic Coach. I might be lying, I tend to exaggerate, but we did go from when I attended Strategic Coach, the revenue was $250,000, and today we're at $3 million.

Adam (00:04:13) - Okay, great. Yeah, that's great growth. I mean, what do you, obviously you're giving a lot of props to Strategic Coach, but what are the things that you think really have created that catalyst? Because what I hear out there a lot is, and I think it's only when you get to a certain point, people are like, "Well, there's a ton of business out there. I can't find the people for it." But I think there is this middle earth or this initial stage, especially for people listening right now who are trying to build their company and build their clients. It's like, "How do I get to the right clients?" You know what I mean? Because I think there is that evolution, like you said, where you're taking anybody with a pulse, then you're taking anybody that'll pay the bill, and then you're kind of trying to move upstream a little bit. So talk to us a little bit about that journey. How's that looking for you?

Mike (00:04:56) - Well, the one thing that Strategic Coach really taught us, what's really helped our business grow, was there's a secret to growing your firm: hanging onto your good clients and not having a turnover of good clients. I can count on one hand the number of really, what I would say, good clients that we've lost. The other clients that we've lost, usually, hey, we've outgrown them, we've become too big, we've become too expensive. But not churning your clients is the number one way of growth. But the other thing is, and I was reading a book on sales today and it gave a great analysis, is remember, you're not an alchemist, you're a prospector. So a lot of times what we have to do, we're trying to turn water into gold. We're trying to turn these crappy clients into great clients, but you have to be like a prospector and you have to shake, you know, get rid of the sand.

Mike (00:05:43) - And when you see a gold nugget, you have to go for it. And that's what Dan taught you, is focus on relationships, multiply opportunities. So just by focusing on those strategic clients and then asking some powerful questions like, "Hey, who's someone you know that I should meet?" Really trying to get referrals from those top-line clients is really, really key. Everyone talks about, and I'm trying, trust me, I guess you guys might have seen some of my LinkedIn videos, we're trying to get more marketing done and get more awareness about us. But 99% of our business comes from referrals, and it's usually from one of our, what we call critical or Pareto clients that is sending us another client. And the way it works with referrals is referrals go downhill really well. And when I say that, I'll give you a little story.

Mike (00:06:40) - I had a client, one of my first clients, it's a funny, almost a Jerry Seinfeld story client, because my future partner didn't know at the time he was his CPA, and he was charging him $350 a month. I went in, was charging him a hundred bucks a month, and all of a sudden the guy showed up and I had to hide in the bathroom. They're like the barber on Seinfeld, I don't know, I don't wanna do this. But, um, he was, hey, I got this guy, I'm referring this guy to you. He's got all this business. And it was a pretty influential guy, and he would always say, hey, I'm trying to get you this guy. And no one ever came. Right? Then one of my clients, my first high-net-worth client, said, hey, I referred this guy to you the next day.

Mike (00:07:17) - The guy called. And then he came in, and the next day he signed the engagement letter. So really, I think it's a matter of, hey, prospecting, you're prospecting, you're looking for gold, and you just can't, you can't get swayed by the trivial few. You gotta serve the trivial many, you gotta serve the mighty few, right? And yeah, and that's how our business is swayed. We really probably do have a customer concentration issue, compared to some CPA firms. We have some clients that pay us in excess of a couple hundred thousand dollars a year. We have clients, a lot of clients pay us a hundred thousand dollars a year. And then it goes down, and I always, I talk a much better game than I actually do. We do have some smaller clients too. So, so when you add--

Adam (00:08:04) - Of course, yeah, of course we know, and some unprofitable ones, and we call those legacy clients, um, is usually what we do. But, and those are the ones you have the relationship with. I think what's interesting about what you were saying there is that as you focus on relationships when it comes to sales, I think, um, you know, I think that CPA firms, especially large ones, have always been really good at sales. You know, everybody's on the partner track, everybody goes to the country club, the Rotary Club, they build relationships. Um, the only thing that, like when Jodi and I very first started our practice, it wasn't GR Hale CPA Firm, intentionally it was Summit CPA, because right out of the gate, we didn't want you to know if there were two of us or 200 of us.

Adam (00:08:45) - And then the other thing that we found challenging was we wanted people to come for the brand and not for the people. And I don't mean that the people make the brand and that's what stands behind them. But what I'm saying is not only being here because X, Y, Z person works here, but this type of person works here and this is the type of service they deliver. So early on, sales were super easy because I was selling it, I was gonna work it, Jodi was selling it, Jodi was gonna work it. And so whenever you're like the primary go-to person, it becomes really easy to go, hey, I just sold you on me and what I can do. Um, and then Jodi and I would have different flavors on how we delivered, obviously. Um, but as we scaled and really grew, that's when, for us, it really became about creating a brand promise and a foundation.

Adam (00:09:37) - And then that's why we went to those subscription service models where we really wanted to say, okay, you're subscribing to a small, medium, or large, and this is what it means. We really started with blowing out service packages first, and then, of course, accompanying that on the back end with pricing. So it was really services and pricing. So a lot of times when we have people come through the course and they're just like, hey, Tom, how do we get clients? It's like, I don't know, what are you telling them? Are you telling them that you do everything under the sun? You know, how do you find those A clients? And to me, it's about defining what you're going to deliver, how you're going to deliver it, and putting it into a package that's digestible and understandable for the client.

Adam (00:10:21) - And then armed with that information, even though it can be a little bit of a chicken and egg thing, go through that, figure that stuff out first, then you have the ability to get into sales mode because now you know what you're selling and the client knows you're not just selling you personally. And I can do anything, just ask me. You're saying, no, this is what I do and this is how I do it, and if you want access to that, here you go. You know what I mean? That was kind of the shift that I don't know that we, I would love to say in hindsight that we were really thoughtful about all of that, um, it just kind of happened over 10 years of just messing it up and realizing that Jodi was the guy, or I was the guy, and looking at ourselves like, we don't want to be the guy.

Adam (00:11:06) - Right. You know what I mean? Like, that, you know, and then kind of coming back, especially as you start leveraging staff. And I think that traditional CPA firms are like, that's what you want, and you just want 35 of those guys, or 50 of those guys, or a hundred of those guys, and let's share under one shingle. You know, let's just all be under the same roof. And it's just like, I don't know if that's where we try to make it more brand-focused than partner-focused on the sales side.

Mike (00:11:31) - I agree with you. And that model really doesn't work because a lot of times when you just have 30 of those, you create like 30 little kingdoms, right? And what we see now in the market is that some of those firms are really hard to sell right now. You're not building any real value because it's really, they're coming to you. What's great about, unfortunately in South Carolina, I can't, I have to use one of our--

Adam (00:11:55) - That's what I was gonna say. Some states you have to use your name just like law firms do. Yeah.

Mike (00:11:59) - Well, with that said, once clients meet me and they figure out my attention deficit problem--

Adam (00:12:07) - They don't wanna work with you anyway. They have no problem.

Mike (00:12:09) - And I say, usually, you know, I get them all excited with all the ideas, and then I introduce them to Karen or I introduce them to Will or I introduce them to Travis. We still haven't created, you know, our packages consist of what we start people as, we call it a CTO. And I know someone says I gotta get better branding for that, but it's Chief Tax Officer.

Adam (00:12:28) - No judgment zone here. Technology.

Mike (00:12:30) - And what we do is, hey, here's what we're gonna do. You know, we're gonna do this role for you. We're gonna look at forecasts, we're gonna look at your taxes, we're gonna figure out the strategies that you need to execute to minimize your taxes. And then we take them up to that controller level where, hey, in addition to your taxes, we're probably gonna reorganize your chart of accounts, probably gonna create a financial dashboard. Look at those things, maybe talk to you about a budget, and work with you on a quarterly basis on some of the financial metrics too. We do a lot. We try to get into offshore accounting, and our client journey usually starts with the CTO package. And then something goes wrong with the bookkeeper, something happens.

Mike (00:13:17) - Or, or, and like I was gonna say, one thing where people, where CPAs can find existing clients sometimes is statistics. I look at Rootworks a lot, and this might not be fresh, but I think a million-dollar CPA firm, the average million-dollar CPA firm, I want to say has like 700 individual clients and 125 to 150 business clients. Okay? And so the secret that most CPAs won't do is to really try to get out of the individual tax work. And nowadays, especially with artificial intelligence, you want to develop a sales mindset. Let me tell you what you gotta do. You gotta stop keying in stuff. You gotta get on the phone and you gotta call your client. You gotta talk to your client. Even if you're not thinking, "Oh, I gotta charge 'em for this call." Call. Hey, what's going on in your business?

Mike (00:14:11) - Here's anything that we need to know, and just let 'em talk to you. And a lot of times, um, just having them talk to you, you'll realize, "Hey, do you need some help with that? Maybe I can take that off your plate." "Oh, sure. Yeah. Mm-hmm." And so then, that's how you grow the sales. But the biggest thing is just talk to your clients, all your business. "Hey, what's going on in your business? How's this affecting you? The banking thing, are you worried about this?" You know, if you have a financial planning practice in your firm, this is the perfect time to be talking to people about, "Hey, you got $3 million of cash in your business or a million dollars of cash, what are you doing to protect that?" Right. Have you thought, I mean, stuff like that.

Mike (00:14:59) - I mean, not to play off the fear, but a lot of clients are calling us. It's the perfect time to talk to 'em. But I think the number one way of developing a sales mindset is, I think the first thing is you got to care about your clients. You really gotta care about them. Okay. And the point is, you know, I probably care too much. That's why I can't have everyone as a client because, you know, I'm the kind of person, I'll be honest with you. Sure. There's a lot of clients who went bankrupt, I did the accounting work. No. And I could get paid, but never really got paid. And then also, Oh, good. Yep.

Adam (00:15:34) - We've been in that situation a lot.

Mike (00:15:36) - That's caring too much, right? So, the first thing is, you gotta care. Right? But the second thing is, you gotta believe in your heart that you can help them, right? You gotta have the confidence mm-hmm. that you can help them. You know, you gotta talk to the clients, you know, I have, I'm very blessed 'cause I have a mastermind group with a lot of my good clients and stuff. And I, and they tell, I've heard stories, "Oh, Mike, you really gave great advice here. Oh, Mike, you saved me a lot of money here. You really changed my life and stuff." So I know deep down inside I can help this guy and believe it. So that's the second one. You gotta care. Two, you gotta know you can help them. And then three, you just have to have the confidence to communicate to the client. Not by bragging on yourself, but just by believing in yourself when you say, "Hey Adam, here's what you need to do. I'm gonna solve this problem for you. We're gonna do X, Y, and Z. It's gonna cost you this much. I'm gonna send you the engagement letter. You don't have to pay it today, but let's get started. When would be a good time for us to start?" And if you truly believe in those three things, then you will. That's the sales mindset in a nutshell.

Tom (00:16:54) - Okay. Good. Yeah. If I can drill in on one piece of that that you talked about, Mike. So you talked about existing clients and moving from the CTO model to another one of your packages. So growing existing clients, do you have in your mind targets for your growth to say, "Here's how much of the growth that I'm achieving this year is gonna come from my existing clients and how much comes from new clients?" Do you think of it in that way? Or is that not really a...

Adam (00:17:16) - He's gonna give you a real quick answer. Watch this. Go Mike.

Mike (00:17:19) - I, I should, but, uh, okay. Once a year I do what I think is, is I remember watching you guys. I always said, "This is how many clients we're gonna get, and this is how many clients we might lose." And they had this whole mathematical formula. I was like, "Man, that's really good." Now we do have a pipeline. I think you guys might have even suggested we use Pipedrive. Is that right?

Tom (00:17:45) - Uh-huh, Pipedrive, HubSpot are two of the big ones. Yeah. Yep.

Mike (00:17:48) - That's been a real blessing. And so we do follow that, and we do track our metrics on the pipeline, but, mm-hmm., I'm a big, um, sometimes I'm too much of a quick start. I'm really getting into action a lot and say, "Hey, I'm just gonna close, you know, I'm gonna close $200,000 of business this month." And then I try to do it, mm-hmm.. So I'm not the best when it comes to process. There are three things. Okay. Give everyone a little business consultant. I listen to way too many podcasts. Three things that you have to do to have a great business. You have to be a great leader, you have to be a great salesman, and you gotta be a great builder. So the builder thing, my plan is to become a great leader and a great salesman this year so I can pay a great builder...

Adam (00:18:34) - That's the way to do it. Then you can, then you can buy a great salesman, and then you'll really be a great leader. Yeah. Because you'll be in full lead mode.

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Adam (00:19:23) - Yeah, I mean, I think that, you know, just to kind of circle back around and not to beat this, but I do think, you know, what you were talking about at the beginning was building that confidence in what you do. I think most people inherently know what they do is right, but I think that a lot of us get imposter syndrome. Imposter syndrome's real, you kind of gotta get over that. Stuff that seems silly and common sense to us because we see it every day is not silly and common sense. You know, a mechanic talking to another mechanic about doing something, they're just like, "Well, duh." You know, but you explain that process to somebody that has never done anything mechanical in their life, they're just like, "Wow, this person's brilliant." That's, that's kind of, you know, you, so you kind of have to like, you know, self-check yourself a little bit there and just know, "Hey, I do have a lot of experience and knowledge in that."

Adam (00:20:15) - But I think you strengthen that and you can solidify that by, again, if you really write down what your brand promise is because clients will ask us over and over and over again. Just had a client the other day, they asked me, "Okay, this sounds fabulous, Adam. What's my ROI? Like, what working with you? What happens?" You know what I mean? And I love that question, and I won't bore you with my pitch, but I give them exactly what I want the ROI of working with us and how we do all that stuff. And it's like, and that's because I understand my brand promise and that is my ROI. And then from there, it's because I intuitively understand what those packages are and how they can help people. And so if you start with that piece and really break that down, I think whenever you're trying to create that sales mindset, it's about understanding what that script is.

Adam (00:21:07) - And, and you know, Mike, you're obviously naturally gifted at talking, and you know how to just kind of gel with conversations. But I think that if you practice that quite a bit and know what you're delivering and you know what the capabilities of your team are, then because that's for us, not only does that um, do those service packages offer clarity to the client and help in the sales process, but it also offers clarity on the operational side when somebody actually has to execute on it. And then we even go further downstream. And that actually also defines how we pay our team. So we've kind of got it fully integrated, but at the base, it's like making clarity for the client and then following it up and backing it up with the team. That's not you, Mike, because again, like you mentioned, you're not gonna do the work anyway, so you want to make sure what you said happens to them. Yeah.

Tom (00:21:59) - And Adam, on the leader side, what I've seen you do, which I think is good on the operational pieces, you've taken pieces of the brand promise in our different meetings, like with the CFOs, and say, "Hey, here's what I'm promising. How does that align with what we're actually delivering?" Now I've heard you even say, "One of my fears is I go tell a client we do A, B, C, and then find out that Tom likes to do his own thing and he doesn't do that way." And just recognizing we don't want that inconsistency. What we promise is what we want to deliver. So I've seen that try to really tie it into the operations piece of it.

Mike (00:22:27) - Awesome.

Adam (00:22:28) - Yeah.

Mike (00:22:28) - And one thing I think that benefits everyone is taking some sales training, actually writing a check and taking some sales training. I've been through several sales courses and they've all helped with actually selling. And you almost have to do one, someone like myself probably needs to do one once a year because the problem is it works and then we change it. So it works anyway, then we change it. I mean, Dan Sullivan said it best. He was talking when I went to the group, he had like three segments. He had, "Hey, if you make over a hundred thousand dollars a year in this group, you make 250. Maybe it was half a million dollars a year in this group, and a million dollars a year you make this group." And there was really no difference in the course material at that time.

Mike (00:23:19) - I was really limited in my thinking, and I was like, "What's the difference in the course? It is the exact same course, but he was charging double for each one." So like, the one I was in, I went into the lower level, it was like $5,000 or $4,000, the next one was eight, and the third one, $16 or $12, something like that. And I was like, "Taking the same course, why would someone pay more for the same course?" I figured it out the first year I was there. But he said people would ask him, and I never got it. Coach Dan was really good about selling his ideas but not delivering. So he had a model, but one time he was speaking, he said, "People always ask me what the difference is between the guys at the million-dollar level and the guys at the hundred-thousand-dollar level."

Mike (00:24:01) - And I always tell them, "I'm gonna tell you the truth, the guys at the hundred-thousand-dollar level are usually smarter than the guys at the million-dollar level. But the guys at the million-dollar level, we would tell 'em, 'Hey, we need you to do X, Y, and Z.' Okay?" And they would go back and do it. The guys at the hundred-thousand-dollar level, they think, 'Well, you know, I could do it this way and maybe get it better, or I could do this and make it more efficient, and I could do that.' And the reason I've gotta take a sales course is because every time I take a sales course, they give you a script, you follow it. "Oh, oh, oh wow, I just closed a big sale. I just closed a $50,000 sale. I just closed a $72,000 sale."

Mike (00:24:42) - And then you say, 'Eh, you know, I can just wing it next time.' So that's the biggest thing about mindset, is you cannot wing it. Winging it doesn't work. And, um, one, and I, you know, and unfortunately, someone, I was talking to a client the other day, he says, 'I have a PhD in how not to do things now.' Yes, that was funny enough. Yeah. Hey, join the club. I feel that way too. But winging it doesn't work, following a process. So, uh, I've been through a lot of good sales trainings and I'm about to start another one. I've been reading a great book that I think is really good. Um, people might make fun of me for recommending it. It's called "The Way of the Wolf" by Jordan Belfort. Have you guys read it? Nope. Nope. Well, let me give you, I'm writing it out. My daughter was like, uh, she was looking to read the book and she was like, 'Hey, you're reading a book written by a criminal.' I was like,

Adam (00:25:32) - . Oh, okay.

Mike (00:25:33) - You know that. And she was like, "Well, Jordan Belfort, and he's really good, the Wolf of Wall Street, Wall Street character, right?"

Adam (00:25:41) - Okay, got it.

Mike (00:25:42) - Yeah, okay. His book is really good. And another good book that I think every CPA should read, my wife gave it to the CPA we were at, is "The Prosperous Coach." And it's a book on coaching. But what it does, it talks about, you know, especially in my position, I'm in a position where I coach a lot of people who make millions of dollars a year, like 15, 20 million, 5 million, so forth. You guys can look at my revenue, do some basic math, and say, "Mike's not making 15 million a year, right?" So, but one thing it taught me was, hey, everyone has money, but there's only one me. Everyone has money, but a lot of CPAs get intimidated because our clients run better businesses than us. Or really, the truth is, they're in much riskier businesses sometimes than we are. And because of that, they produce a larger return. So that's just the way it is. But I thought "The Prosperous Coach" was a great book to read about the mindset of how you coach people who you might be technically intimidated by. I remember one of our first high-level coaching clients came in and he was making 7 million a year. And me and Travis were like, "Oh gosh, you know, how are we gonna help this guy? Does that mean..."

Adam (00:27:00) - Sure, right. I think you're doing pretty good. So...

Mike (00:27:04) - We went in, and he's still one of our clients who refers us a lot of business. We've been coaching him, he's doubled his income, he's drastically increased the time off. And he gives us a lot of credit for, "Hey, you guys really came in and forced me to change some of the ways we were doing business." You can always help, right? And, and, and I would tell you that I'm probably one of his most trusted advisors now and probably the newest one. Because he is an eight on Instagram, very loyal to people. So he's got people he's been working with for 20 years, I've been working with him for like six, five or six. But, but you can deliver value to anyone because the truth of the matter is, as a CPA, you get to look at a lot of businesses and you get to see a lot of people make mistakes, and you're really getting a master's in business by observing business and seeing what's going on.

Mike (00:27:52) - Mm-hmm. You see the mistakes, you get to see, "Hey, this worked over here, this, that," and a lot of us, we undercut that. We really undercut that expertise. So, you know, it's really, you just have to have the confidence and the belief. I always think it's good to, and I should write more of these down, write down some of the success stories that you've had with clients. Even if it's a client saving 50 bucks on taxes, there's more, right? But the thing is, sure, you know, you create results. That's one of the biggest things that you have to believe as a salesperson. Then you gotta get your team to believe that too. So yesterday we came across a good sales opportunity because I'm always telling my team, talk to our clients, talk to our clients with the offshoring, with the artificial intelligence.

Mike (00:28:35) - Your CPAs really should have the ability not to be doing a lot of tax returns and actually communicating with clients. You guys have a great system where you meet with them weekly. We're not there yet. But the talking to them, we've got a CFO engagement, and it might not be a true CFO engagement. This is an older client, real established, with a large company, 40 million in sales. But he's like, "I'm working on the weekend doing some financial things." I think it's gonna be more of a, "Hey, let's optimize your process. Let's offshore some of this work. Let's see if we can create some Excel spreadsheets." He's probably, I would be shocked if he's doing this number because he's in his sixties, but he was just talking, he was like, "I think I'm gonna hire a CFO or controller," and our employee had a really good conversation with him. So, "Hey, you should talk to Mike. We do a lot of that to help you." And so, you know, and then of course with sales, knowing the right questions to ask people, which probably should get some for you. You guys know the better questions. No question I'm gonna ask them, "Hey, if I walked in, I was your CFO today, what would you have me do?" And most businesses...

Adam (00:29:44) - That's a good question. That's...

Mike (00:29:46) - A good question. What would you have me do, right? And just listen and listen, and figure it out. So, but getting that mindset to your employees, like you guys have, where hey, talking to the client, the most valuable thing you can do is talking to the client. In "The Prosperous Coach," there's a great quote called the lamppost, and it says, "Imagine if a business owner went outside every night after work and talked to a lamppost for 30 minutes, and he told the lamppost, 'Hey, I'm trying to do this. I'm struggling with this. I'm doing this. I'm doing this.' And the lamppost never said anything. Do you think the business owner would get some value from doing that every day, just consistently saying, 'Hey, this is what I'm working on, this is what I'm struggling with, this is what I'm doing, this is what I need help with'? And the answer is yes. So most of us think we have to create the value. The truth of the matter is the client has the value, you just have to have them speak it. And one of the rules... I know I'm talking too much. No one's told me to shut the hell up yet. So...

Adam (00:30:46) - I'll whenever

Mike (00:30:48) - One of the rules of consulting that, and I think I'm the first one to say it, that I usually give credit to everyone I steal stuff from. Um, with that said, one of the rules is I always tell people, "Hey, here's the deal. If you ask the right questions and you listen carefully to your client, they will tell you all the problems in the business. The second step is if you listen carefully to your client, if you ask the right questions, they will tell you all of the answers to the problems." It's usually right. They just don't have the guts to address it or they, or there's some type of a lot.

Adam (00:31:28) - Or the confidence. I mean, sometimes I think they just, you know, I think they just don't understand that that is the right answer or whenever they hear it played back by, you know, it's just outside insight, right? So exactly what you said, we always tell people we're guides. We're not the hero of the story, right? You need to make sure that you're asking the right questions because the clients do have all the answers. They just might not know how to put the puzzle together. So they've got all the pieces. It's your job to listen and say, "Yeah, let me play that back for you. So if we do this and this and this, then..." And then the cool thing is, if you're doing VCFO services like we do, which is the backbone of everything that we do and our brand promise is, you know, providing financial clarity, we use a financial forecast for that.

Adam (00:32:10) - We can show them the answers. Um, so I thought your question was great that you ask a client whenever you come in, "Hey, what would you have me do?" A lot of times whenever we're asking them strategic questions, one thing that I always ask them is, and maybe I have to adjust this for inflation, I don't know, but I'm always like, I'm like, "Hey, if I give you 10 million today, what would you do?" You know what I mean? And then sometimes they're like, "Well, I would go buy a beach house." I'm like, "Cool. So succession planning is checked." Um, you know what I mean? Like understanding, you know, just what their motivation is and those kind of things. And, and again, I know that's, um, you know, we're talking more about like the sales mentality and how to build that. But I think what we're trying to get to here is if you believe and know how you're gonna consult with the client, um, you know, that kind of goes back to those pricing packages and that brand promise. That's ultimately where you're gonna have the confidence and the understanding of knowing what your ROI is to that client so that they, you know, they feel confident in working with you.

Adam (00:33:09) - So

Tom (00:33:11) - Yeah. So Awesome. Mike,

Mike (00:33:13) - For the record, I just wanna say, uh, I think Jordan Belford is a reformed person. Now, , I don't wanna

Tom (00:33:23) - DiCaprio that you're convinced now

Mike (00:33:24) - Online be like, get the hell outta here

Tom (00:33:29) - In the coaching that I do with a lot of other CPAs, pricing seems to be a huge stumbling block for people. And the questions you ask over and over are around, "Well, tell me how you price this." And I see a real fear when they're kind of talking to someone about a general kind of service that they do. I'd love if you're in the way that you're doing selling and maybe guidance that you would give people on how you end up pricing well things to where you feel like it's fair and maybe it doesn't take so long that you lose the prospect because you can never get back to them at the price.

Mike (00:33:56) - Right? Those are, those are, and I've had the experience in both losing prospects because we took too long. I've had a lot of experience in underpricing, so

Tom (00:34:04) - I've got a

Mike (00:34:05) - PhD in underpricing services.

Tom (00:34:08) - And hopefully a solution.

Adam (00:34:09) - We probably went to the same school I do as well. So

Mike (00:34:12) - With that said, and, and a lot of times, and me and I think have similar personality be a really good problem solver, probably real quick on his feet. Very, very intuitive. And so one of the things I never tell clients anymore, my staff tells me, don't tell my how simple that is. Cause I'm always like, oh, that's simple,

Mike (00:34:29) - That's easy. Right? No, no. It's gonna take some time. Always say, "Hey, it's gonna take a little time to get that done, but I think we can do it." But the one thing we talked a little about is that most CPAs are scared to sell stuff because they have to do the work themselves. And the reason they have to do the work is because they've priced it in such a way that in today's market, they can't pay anyone to do it for them.

Tom (00:35:08) - So you just multiply times four. Right?

Mike (00:35:09) - Let's try to multiply by four because, and I still miss it sometimes because CPAs are naturally perfectionists.

Tom (00:35:21) - Mm-hmm.

Mike (00:35:21) - In fact, I was shown a video from Bill Murray when he played meatballs and he did that, "It just doesn't matter," and I was talking about all the stuff that we do. It just doesn't matter, right? We tend to underestimate and staff is gonna take longer because of perfectionism. Your typical CPA is gonna have a high FactFinder and follow-through. What I found from talking to a Colby certified person is that when they said, "Oh, they're high follow-through," that means they're like the government. Now I get it.

Adam (00:35:37) - Right? Yes.

Mike (00:36:10) - I understand. I always thought high follow-through meant they just drilled it down, but no, no, no. They're like a bureaucrat. They're bureaucratic. And I was like, oh, now we're hiring all these high follow-through people and I'm like, just get the return on.

Adam (00:36:23) - Yeah. Just get it done. Hundred dollars. How can we lose money on a $3,500 return? You know, it's like...

Adam (00:36:29) - I always, uh, I always kind of relate stuff back to contractors because obviously they're usually the worst. You never pay a contractor an hourly rate, you know, to build your deck or do whatever. Because, you know, at the end of the day they'll be like, "Yeah, that only takes me six hours." But what they forget about is your house isn't square. The six trips they had to make to Home Depot, all the other stuff that comes into it. So you always get a fixed fee from them. Clients are much the same way with us. You know, they probably want the fixed fee, the budget, and that kind of stuff. So the way I generally equate it to clients is I'm always like, it's like a bathroom remodel, smallest room in the house, seems super simple, right? Yep. And we do it all the time.

Adam (00:37:08) - So you're in good hands. Like if there's a problem we'll figure it out however, we don't know what the mess looks like until we knock down the walls. Once we start pulling apart the drywall and we look back there, man, it could just be a mess. And so again, you're in good hands, we'll take care of it. We'll keep you informed on what the new timeline looks like and what the damage is. But at the same time, it's like you never know until you dig into it. So I think a lot of times when you say, "Yeah, in a vacuum, does that take two hours? Absolutely." But what you're not accounting for is the fact that they only gave you half the information and the other half of the information was wrong. So, you know what I mean? Like, you're always like, so it's not even a matter of just being a perfectionist. Sometimes I think it's just sometimes it's like you just get dealt generally. I mean, hell, how many times do you ever run into a client or a prospect and they're like, "Yeah, I think my books are in really good shape," and you're just like, "Oh, shit." Yeah. I mean, you know, don't get me wrong, I appreciate the ones that are like, "Nah, it's probably a disaster," because then I'm usually not as like, I get into them like, "Oh, actually they're not too bad." But every time somebody says they're in good shape, I'm always like...

Mike (00:38:17) - I'll be that.

Adam (00:38:19) - Yeah, that's what I'm saying. I mean, I'm usually, it's usually an easy spot to just laugh and go, yeah, I hear that a lot. You know, and they're like, well, okay, you know, so it's a fun spot. But I'm just saying, whenever you go to price an estimate. But that same token, I mean, for us, and I don't know if this is true for you, Mike, and I don't know that everybody feels the same way. But we are a subscription-based business, and so we're comfortable with win some, lose some. So we're comfortable with knowing what our capacity is to do that bathroom remodel, and if one's a little bit more damage than the other because people, because we give pricing first call. Mm-hmm. I mean, I know that gives a lot of people heartburn.

Adam (00:39:03) - They're just like, whoa, I need to get me into your books. Let me look around, let me review your tax returns. Let me do this, let me do that. You know, get a blood sample, and then I'll get back to you in a couple of weeks and let you know what it looks like. We're like, man, we crank out bathroom models all day long. We've seen the dirtiest, the nastiest, the clean. Like, we've seen the whole variety, and we feel comfortable in our skills, in our experience to be able to take that on. Now, if it is like the floor's falling out, we will let you know real quick if it's anything remotely to what you think it is today. But for the most part, we're able just to knock that pricing out right on that first call. And clients, not only do they appreciate transparency, but I think it lends into the credibility of, "I do this all day long."

Adam (00:39:55) - The difference between me and your CPA firm that you just talked to. And they're just like, well, in fairness, you know, Adam, I never really went to my current firm and asked them if they could do all this stuff. And I go, well, I bet you could go to them right now and they can do everything we just talked about. They're like, oh really? You think so? And I'm like, yeah, they can do whatever you need them to do. That's kind of the, that's how our industry works, but this is what I do. And they're like, oh yeah, good point. Okay, nevermind, um, yeah, option B, you know what I mean? Like, you know, it's a pretty quick, you know, you can get a feel for if somebody can do it or, you know, it's like, um, again, just going on a spiel here, but the contractors, I'll never do this again.

Adam (00:40:43) - I needed a really good drywaller to redo some stuff, and at the end of his van, it said "drywaller and paint." So I had him go ahead and paint. He painted like I paint, which is not very good. And I'm like, he was a great drywaller, fantastic at that. But then he put "and paint," and it was definitely "and paint" like, um, and so, it's like, it's one of those things where you can tell when somebody actually does it and focuses on it, and that's kind of their thing. And so you can do that by industry, you can do that by service line. You, I mean, there are a lot of different ways to slice what you do, but that's why I always come back to, like, in that sales mindset mentality. It is like, like you said, it's figuring out what the packages, the services you want to sell, and how you want to package them. Figuring out the brand promise, you know, and then figuring out how the pricing is. I agree with you. Study all the sales stuff you possibly can and then go back and reprice because you probably screwed it up the first time. I just...

Mike (00:41:48) - ...want to point out what you said, actually. You're teaching me some really valuable insight here. I'm one of these guys, I'm not comfortable losing money, even though you do anyway, right? So, but I was sitting there thinking, and I think I stole that from you, the contractor thing when we did it. We had a big blunt with a small client where all of a sudden we did all this stuff, and then we were, my Karen, I talked to the client and the client got really pissed, and he said, "I'm going up there," you know, and he was a construction guy, and I was like, Karen, here's what we'll do. I said, "I'm gonna call, get a check for the fee he paid us. I'm going to talk to him. I'm gonna say the first thing I'm gonna do is, 'Hey, my reputation's important.'"

Mike (00:42:29) - "If you think I screwed you, here's your money back, period. We'll be done. I'm not mad, I'm a big boy. I can lose on this." But then I use that change of conditions, which is very good. As you know, you build houses and do this. There's been a significant change of conditions in this scope. And we really, you know, like you said, the reason, you know, yeah, I'll give you money back, and I'll lose whatever I've got into it, but I'm fine with that because if I continue under this, I'm going to lose a lot more, you know? And, yeah, it ended up he said, "I don't, you know, no, I really, I, you know, you're very valuable what we've done so far and all this," and we ended up still doing work for him and got it done.

Mike (00:43:13) - But the change of conditions, especially with construction clients, is really powerful because they understand they have to change orders and different things that you have to be careful of. But, um, I was like, you, I think you make a really valuable point, and I want to stress that. And it's really finally hit me in the head, get pricing quick, use pricing in such a way that, um, and just be quick with it. Don't, you know, because what we do is I should lie on a couch while I talk to you because it's your therapy session, and most expensive people to sit there and look at price and returns and then, you know, and we still miss. It's like me and Kevin, sure. But so, so hey, have your standard pricing, you know, Hey, Mr. Turn and price it and say, guess what? Hey, next year we might have to increase the prices, right?

Adam (00:44:04) - Right, right.

Mike (00:44:05) - One thing, Adam, too, what we did, you'd be proud of me, I actually tried to do some real accounting work, um...

Adam (00:44:10) - Oh no, we...

Mike (00:44:11) - We're looking because we do a lot of outsourced bookkeeping, and we were looking, you know, because we were like, why does this engagement take this and why does this engagement take this and Uhhuh, and we start looking at transactions. What's the average transaction enter? Now with all the computerized stuff and artificial intelligence, that's going away, we're expecting to make all this money. What I found, and this might be wrong, you guys probably know better than me, the most expensive element of bookkeeping is the communication process that drives up your cost more than anything because it's the client all of a sudden mm-hmm. because we're like, hey, we got the book done. The client's like, well, I want to do this or this or this, or Oh sure, this thing's not working or this thing, you know, because we still don't do a good job of making them standardize, Hey one credit card, one bank account. But we start looking, it's all, the communication process that you have is really from an activity is really driving up your cost a lot. And it is the same thing with tax returns too. We're really famous for filing like 70% extensions and, um, newer returns.

Tom (00:45:13) - You'd rather do less than that. Yeah, sure.

Adam (00:45:15) - Yeah, no, I agree. I mean that's why we get a little bit more prescriptive with those service offerings. So we can kind of take control of that narrative, and we have those scheduled cadence meetings so that we're not being overridden all the time by all that client communication. We can push it down. We have a review process, a lot of times we talk a lot about, you know, no homework. So, um, you know, set the precedent with the client that to some degree it's a working meeting, um, so that you don't have to leave with a laundry list of things to do post-meeting. You know, it's supposed to knock it out, gain an understanding, and move on. So...

Tom (00:45:51) - Mike, as we wrap up here, I guess I'd be interested, and I'm happy to give one, if there's one point that you want to leave people with, and I guess I'll ask Adam the same thing, and I'm happy to give one. People walking out and saying, okay, you're convincing me I need to be more sales-focused and have that culture in there. Is there one thing that you would suggest, and I'll let you choose. You want to go first? You want to go last? What's your preference?

Mike (00:46:11) - I'll go last. Just, okay.

Tom (00:46:13) - Um, Adam, I'm happy to start off, and I'll steal one thing. Yeah, that maybe you had said, Mike, that if someone's saying about this and you're saying, I'm not there, I don't think it works, I'm just gonna be better. I think your suggestion, whether it's a resource like the book or a class that you're taking, of saying there's something I'm gonna do that I'm gonna get better and build a skillset, and that's gonna help me make that change. That'd be one, my one thing that I took away from here. Adam, what's...

Adam (00:46:36) - Yeah, to me, it's just structure. It's, it is literally service package brand, brand promise, pricing. Like if you get that structural piece down, um, the rest of it all kind of falls into place. And you can not only make yourself have the sales mindset, but that'll resonate with the rest of your team because they'll understand it and they'll be able to do it without any issues.

Tom (00:47:03) - Great point.

Mike (00:47:04) - Right. And I would go down, I think, following a process is so important. All the top salespeople follow processes, and that's the only way really if you ever want to systemize your business and not be doing all the selling to get the thing done. And then the second thing I would stress really is the confidence that you can help the customer, the confidence that your solution solves their problem, and is really probably one of the most important things. Because if you're not confident that you can solve the problem, you'll not close the sale.

Tom (00:47:38) - Yeah, that's an excellent point. What a great way to end this. Mike, thank you very much for your time today going through this. I hope people got a lot of value out of it.

Mike (00:47:44) - Thank you, guys. Yep.

Tom (00:47:46) - Thanks, Mike. Yep. We'll talk to you soon.

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