Last week, I engaged a visiting tradesman in the standard patter. "Yes, I work from home," I said, "and I do tax for small businesses." Pause. "Who does your tax?" He was a lovely chap and would make an ideal client. He said he was thinking of changing, as his current accountant had moved a long way off, and it would be handy to drop off his paperwork to me instead. He then asked how much I charged. I said £600, but if he needed book-keeping the charge for tax would be lower and we needed a meeting to talk it through. He went off with my card and said his wife - who is the finance brains - would call me.
As he left, my heart sank. I had handled the whole thing badly, and I don't expect for a moment I will be hearing from him again, as I suspect a bald quote without any investigation of what he needs etc is completely the wrong way around.
How do you deal with tradesman prospects when they ask "how much do you charge?" before you've got them to agree to a meeting, and is it feasible to state that you would have to see their paperwork etc and have further discussions with them before you can comment?
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Yes
"How do you deal with tradesman prospects when they ask "how much do you charge?" before you've got them to agree to a meeting, and is it feasible to state that you would have to see their paperwork etc and have further discussions with them before you can comment? """""""
It is entirely reasonable (unless you do fixed price scheme on turnover), would you expect a quote from someone who hadn't seen the work to do .
If pressured I would say it is impossible to give an accurate quote without seeing his books, but a ball park figure is £x - £y but if extra work is necessary the charge may be more but you would discuss that first to give hime the chance to do the work himself.
Take a punt ....
give him a number or a range ... if you [***] it up then there is always years 2 -10 to get it right.
If you don't hear from him again it is because you were more expensive than his current accountant not because you came up with a figure. Not coming with any sort of indication would have scared him off for sure ... Jo Public does not sign up to a meeting without knowing if they can afford you.
It is a difficult one, I have now got into the habit of asking them what services they expect to be included in the fees and if pushed will quote some ball park example figures with PLENTY of caveats. I then explain that in order to provide them with a precise quote I will need to discuss their requirements, books and records in more detail and arrange a time to see them. I try not to give instant quotes without finding out about the business, bookkeeping etc if I can help it, but some people insist on it and I tend to find that they are the ones that are just looking for a cheap job, no matter what quality of service you offer. In such cases I sometimes turn it back on them and ask them if they would quote a job without seeing it first.
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You are missing something here - follow up.
A simple call, even if you end up leaving a message may yield a response.
Yes, but you can use your experience too...
Potential was a tradesman. A few questions:
Who does your bookkeeping?
Is it just you?
Is it mainly domestic work you do?
From that, surely you could construct a quote that's going to be about right? We all must have loads of such people on our books (or have done over the years). What we do is not the same as fitting a kitchen or even laying carpet ... how many variables are there?
£600 sounds a bit
steep for a sole trader. I would have estimated £3-400 and you went from high to low whereas you should have quoted lower and said "it may cost more depending on the paperwork"
Mind you if his current accountant charges more you've got a good deal (potentially)!
Hmm
steep for a sole trader. I would have estimated £3-400 and you went from high to low whereas you should have quoted lower and said "it may cost more depending on the paperwork"
Mind you if his current accountant charges more you've got a good deal (potentially)!
Sorry but the above is nonsense - you can always reduce a fee but getting a higher one is hard work. Go in high (ideally more than you actually want) because they might bite straightaway and if they baulk at it come down a bit nearer to what you were after in the first place. Quoting ranges is also a bad idea, if you quote £3-400 the punter will think its £300 and you'll walk away thinking you've agreed £400.
In which case .. worth a follow up Moonbeam
Your quote is almost certainly competitive and they might just need a very small nudge over the finishing line. If you don't want to call them then write a nice letter giving a bit more detail about you and your fees ... what's covered etc and how much you'd appreciate a chance to discuss it further (given how local you are). Something really friendly and un-pushy could seal the deal (address it to Mr & Mrs as the spouse might be the decision maker).
Moonbeam
I have done what you did. I am sure I will carryon making mistakes.
It's the follow up I am not good on.
The fee you have quoted sound okay to me.
Quote "From £X ..."
it;s useful on both sides if your prospect knows that you are in the ballpark re. fees. no point wasting each other's time if he wants cheap as chips.
i have a standard menu that i quote "from" ...
i.e. "from" £195+VAT per simple tax return ... "from" £750+VAT per company ... etc
i also always qualify the prospect before naming a price ... ALWAYS ask what they are currently paying (8 out of 10 will tell you on the spot), this give you the choice to match it, undercut it, even go over it. if a prospect asks me to quote without knowing what he is paying, i ask how long he has been with his current accountant. if its 2 years or more, i tell him that prices between accountants dont vary that much (a half-lie!) & that what his current accountants charges is a good indicator of how much work is required to deal with him.
then, always ask ... "do you want cheap fees, no advice or do you want a sensible fee and me to take the time to understand your affairs and suggest how you can save tax and make more profit"
you have to position this conversation from the start - do you want cheap, or quality? i am very bold about this - i tell them they can't have both.
this means that the cheapo merchants will show their colours - so tell them straight!
the ones that want good service, good advice AND their compliance works doing well ... have to PAY!
do not compete on price! be brave, hold your nerve, be prepared to let the prospect pass ....
i have found that the best protection against bad clients (bad=low fees/profit) is good marketing ... if you have a steady stream of new prospects, you can choose your price, client type, relax in your meetings etc. you want to market yourself as something special - so that tradesmen (or whoever), are beating a path to YOUR door, and asking YOU "will you take me on" ... sounds far-fetched? it isn't ... not easy though of course!
Moonbeam the new Lancsboy
@Lancsboy - spot on.
I always focus on the tax savings that can (potentially) be achieved.
There are so many small business who pay low accountancy fees and pay too much tax.
Those who quibble on the price at the start are often slow to pay too.
Another option i
I have some vouchers I have prepared and if I am, not sure I would send a friendly letter as stated above and include a voucher for say £100 off the first year's fee. Sometimes this sweetens the deal.
The amount you have quoted in my opinion is about right, its only £50 per month.
Yesterday I had a discussion with a carpenter. His standard of work is very high but he was complaining that he losses jobs to Bodgeit and Co.because of their lower price. My suggestion was that he quotes and says if you want a cr*p job I can recommend someone who will charge about 25% less.
We then discussed whether he could get an introducers commission for the cr*p job....
I have charged a monthly fee for 27 years ....
..... and the fees are reviewed against inflation every 3 years. I have people paying the index-linked equivalent of what they started on a Quarter of a Century ago so you can see how important it is for me to quote the right price!
I have found it is a mistake to quote a figure up front (you never get any further). I invite the prospect in for tea and a chat on an entirely no-obligation basis. This is my Sales Appointment but I give out generously. If the person is newly self-employed then I point out that I am giving them a primer in how things work (how to register for the various taxes, how tax payments work, the likelihood of getting investigated etc). This usually works - I have sold myself successfully - and if they are a tradesman I can usually pitch a price there and then.
If I am in doubt about how much work may be involved I may quote later by email after more research (for instance finding out how much they have been paying my predecessor!) and as they leave the meeting I re-emphasise that they are not obligated until we have agreed a price. I have notes setting out how our fee structure works which I hand out or email
I used to sign up 100% of prospects so I was obviously too cheap. Now it is about 90%
The wisdom comes from my time with the Life Assurance industry - sell the Appointment, not the product