Drilling Down with Geraldine Carter
On episode 43 of The Unique CPA, Randy is joined by Geraldine Carter of the Smart Strategy for CPAs podcast, on which Randy was a recent guest. Geraldine’s company, She Thinks Big Coaching, specializes in helping CPA firms find their niche in order to do more profitable, more efficient, better work for their clients.
Today, our guest is Geraldine Carter. Geraldine is a business strategist and coach for CPAs, and the host of the Smart Strategy for CPAs podcast, which I was honored to be on recently, and had a great time. She works directly with CPAs to help their practice develop high margin fractional CFO and advisory services, help them switch from hourly billing to value-based, menu, or segmented pricing, and helps them develop and attract the clients that they’re going to be thrilled to work with. Geraldine, welcome to The Unique CPA.
Hi Randy, thanks so much for having me. I’m happy to be here.
Well, I’m happy to be talking with you again. We had a great time when I was on your podcast a week or so ago—or a few weeks back. And so again, I appreciate you having me on, and I’m putting pressure on you. I’m expecting to have as much fun today. So I’m going to take responsibility if we don’t—if that doesn’t happen. But no, it should be fun. I enjoyed talking with you.
So let’s let’s get into it right away, because the stuff you have to talk about, I find really intriguing and important. And you and I talked and traded emails before we decided to record this, and I asked for a few topics you might be interested in discussing. You sent me three, and then I asked, “Which one are you most passionate about?” And it happened to be the one I was most intrigued about. So I figured that was a good one to at least start with. And your topic was titled and this is—this is why I find it so intriguing—it was titled, “What eating kale taught me about the accounting profession.” So how could we not talk about that? So you want to expand on what that’s all about?
So sure. The title is a bit grabby, and as stories go, you know, I ate a little bit more than kale for two weeks. But really what happened was that for 35 years of my life, I was in mild, but chronic pain. It didn’t prevent me from doing anything. I still ran marathons and the whole bit. But it was getting worse and worse over time, and after I had my two kids things just got really bad. And I went to my physician, she said, “Now’s the time we have ‘The Talk’, in capital Ts, about suppressing your entire immune system, because what we don’t want is for your joints to fuse.” And I was 42. And I said, “Yeah, I’m not ready for that. And I said, you know, how about before we do this—how about before we suppress my entire immune system for the rest of my life—how about we see if there are other ways of getting to the root of this problem?” And I’d been having some side conversations simultaneously. I said to her, “Give me six weeks. I’m going to throw the book at this thing. If I can’t find any improvement in symptoms after that time, I’ll come back and we’ll talk about suppressing my immune system.”
And I went home, basically scrubbed my diet clean down to carrots, kale, coconut cream, cauliflower rice. And after 35 years of being in mild, but chronic pain, being on, you know, low-dose steroids, you know how long it took for me to notice the difference?
Yeah, you know the answer to this because we had the conversation! But it took two weeks.
It took two weeks! And I went back to her, you know, six weeks later, I was mostly fine. After four months I was totally fine. I haven’t been on prescription medicine since. And, you know, I don’t see her anymore, and I solved the problem. The point is that sometimes solutions can be right in front of us and entirely obvious, right? But because we get so immersed in our training, and we’re super intelligent, and we want to find complicated solutions, and you know, things follow all the rules that were taught.
[bctt tweet=”I went home, scrubbed my diet clean down to carrots, kale, coconut cream, cauliflower rice. And after 35 years of chronic pain, on low-dose steroids, you know how long it took for me to notice the difference? Two weeks.” username=”TriMerit”]
And in fairness to my physician, she was practicing inside what she was bound to do by law. But nonetheless, you have to ask yourself the question, “If that’s the case, are we not looking at this problem from perhaps the wrong angle, or maybe would some other angles be useful?” And what I find with my clients when I onboard them is that in this first session that we have—it’s four hours long, it’s designed to make a bunch of progress in a short amount of time—when I ask them, “If you could have your way with one of your best clients, what would you do?” They list off six or eight of the same things every time. You know, entity structure, tax planning and strategy, PPP, ERC, plug the expense leaks, and all the rest. “How much money would you save them if you did all those things and if you could make sure that they did the things that they needed to do?” and have them rattle off all the numbers, add it up, and time and again, the numbers come down to the same three: conservatively 10%, probably 15, and if a few cookies crumble our way, 20-25%.
Yeah, significant. It’s not chump change, especially if you’re talking about a $3 million business, you know—20%, you’re looking at $600,000. So I see this time and again with the clients that I work with. That they’re stepping over, just to, you know, to take the middle path, we’ll say 15% on behalf of their clients. So you have to ask the question, “What’s going on, in the profession, that CPAs and accountants for some reason find themselves unable to, or don’t have the time to, or are too busy to, or haven’t perhaps given themselves permission to, or feel like they’re operating outside of their lane? What’s going on, that they’re not capturing 15% on behalf of their clients?” Which also translates to higher fees for them, right? You’re talking easily, multiple tens, if not hundreds of thousands of dollars a year in fees for the CPA who can help multiple clients recapture this money.
So really the story about you know, sorry about eating kale is about, “Are we stepping over? Are we overlooking what is simple and obvious, because we’re almost too well trained to even see it?”
Right. So what do we do about it? We know there’s a problem, then.
Yeah! Well, what I do about it with my clients—and I work one-on-one with a very small number of clients so that we can focus on turning the ship that is their business. And what we work on is assessing their client roster, seeing who make great clients for them. Who are those top clients that they can do this level of work for, that they would be able to get these great results for? Because you’re not going to get this for all of your clients, certainly not your D1s who are, you know, not cut out for business, let’s just say.
So we find the right clients that we can offer these services to that have trusted relationships. You know, these may be people that have been clients for ten or fifteen years, that you can say, “Look, I think we have a better way of working together, and I’d like to propose some ideas to you, but it would mean some changes in how we work together. Are you open to it?” And we set the CPA up—my client—to have services outlined for that client. We design the service with the outcome in mind, right? What are you going to do to recoup $600,000? What’s that service going to look like? How often do you need to meet? What time of the year do you need to meet? What are the steps? You’re going to walk them through—what’s your process going to look like in order to get those results. And we design for the results.
[bctt tweet=”Depending on what’s going on with my client, how we’re designing things, we’ll strategize the pricing, and set them up to have a conversation with their client, given which one—which package—we want them to go for.” username=”TriMerit”]
And then we price the service. So—and we’ll develop menu pricing, and we will position the service that we want the client to pick as the middle option. Typically we’ll apply one of two pricing curves within menu pricing. So for your listeners, they all know by now, you know bronze, silver, gold. But within menu pricing, you can apply either what’s called colloquially “might as well,” which is 1x, 1.5x, 1.75x. That drives the buyer to the most expensive option because they say to themselves, “Well, if I’m going to do the basic, well, I get so much more in the middle, I might as well do the middle.” And then if they’re at the middle, then they say “Well, I get so much for a little bit more, I might as well do the biggest one.” So that drives them to the biggest one. Or you can do Goldilocks—remember, Goldilocks likes the middle of everything: the middle bed and the middle porridge. So Goldilocks is 1x, 2.2x, and 5x. So the 5x one is really expensive, way out at the end, and it anchors the price high. And so it drives the buyer to the middle option.
So depending on what’s going on with my client, how we’re designing things, we’ll strategize the pricing, and set them up to have a conversation with their client, given which one—which package—we want them to go for. So that’s the very short version. I mean, that takes about four to six weeks to get there. But at a high level, it is very doable, and it looks pretty much the same, for across many CPAs.
So you just called that menu pricing, and I’ve always heard three tier pricing is that it sounds like we’re talking the same thing with that, correct?
Okay. All right. Makes sense. And I’m no pricing expert by any means, so it probably is interchangeable, and I just haven’t heard it. So okay, yeah, that makes a lot of sense to me. And I’ve actually discussed whether we should do that internally. And a lot of that stuff is based on value, but that three tier menu type bracing to me makes a lot of sense. So if I do, I know the expert to go talk to, so appreciate that.
So then what does this look like the process from the CPA? You know, we are going to identify the clients we want to work with, the clients that we can help the most, the clients we can’t help or don’t want to help, I guess… are we letting them go or how does that work?
Yeah, so there are a lot of clients that need to be disengaged. And I think CPAs are really feeling this, this year with right now, a 14 month tax season. It’s going to be another year maybe before it really gets wrapped up. And there’s so much more work to be done than there has ever typically had to be done in a tax season—and CPAs were already overworked and stretched during tax season. And this year, it’s just been off the hook. And you can see it and you can feel it when you sit inside Facebook groups for CPAs, and read the griping and the frustration and the exhaustion, you know? You can kind of—you can feel it come off the screen.
Most CPAs have way too many clients, because when you start out the way to grow is to say yes to everything. But then, especially if you’re hourly billing, you hit a ceiling, and you just cannot find more hours in the day. What they end up doing, though, is still wanting to make more money, and they add more clients, and they try and scale. And they try and build a practice by volume. But you can see what happens when you’re stuck hourly billing, you just end up kind of in this swirl, where you’re always behind, always backed up against a deadline, and never really doing what you know you could do for your best clients. Because you’re saying yes to everything that comes in the door, because you want to help people, and CPAs by nature are helpful people—and it ends up that they’re just caught in this, on the hamster wheel.
And the way off the hamster wheel is to get rid of, to disengage, the bottom 20% of your clients as quickly as you can, because they’re keeping you stuck from growing your business. They’re categorically in the way of business growth. That’s a very scary process for each of the clients that I work with. They all tell me it’s the hardest step of the process—even harder than niching. It’s scarier than niching.
It’s the hardest step. But it’s actually, I think, intellectually, everybody knows it should be done. It’s just—I don’t know if you see that, but it’s just, I can understand that being the hardest step.
Yeah, it’s an emotional step. Let’s face it, these are people with whom you have relationships.
It’s difficult to let them go. But you need to let them go in order to grow your business. And, sometimes, it’s also good for them. Because it sets them free to find something else that may work better for them. And I’m not saying it’s guaranteed to be better for them, but sometimes we need to get our ego out of the way and believing that we’re, you know, saving everybody, when really we’re not, and we can be in the way of our own clients.
So we’ve got to let go of the biggest possible tranche of clients from the bottom up, so that we can free up time to focus on developing the services that are going to best serve our best clients. Because the price differential on serving your best clients is a 3–5x factor at least. And I hear these, you know, percentages bandied about, in when I listen to other podcasts and read other white papers, that advisory services, you know, add 30%, and I’m scratching my head going, “Hmm, my clients are not adding 30%. They’re basically tripling to 5 to in some cases 10x-ing the amount that they’re charging their clients”—and I hate to use the word charging—but the price ends up being a significant factor more than it previously was, because we’re focusing on the value and the results that our clients have been desperate for, for so long, that have to do with what we’ve been hearing: cash flow forecasting, scenario planning, and all the rest. That’s where the real value is
The monthly write-up is—I can’t believe I’m using this jargon, I’m not a CPA, it should not be allowed! No, this is like getting the ball to the 40-yard-line and spiking a touchdown. You are not in the—you’re not in the end zone. The real value is way down at the end, when you can help your clients make better decisions about their cash, about where they’re going to invest their cash in order to grow their business, whether or not they should buy the building or lease it, help them get the documentation pulled together that they need to bring to the bank, have conversations with their financial planner, have conversations with their lawyer, you know, quarterbacking those kinds of things. That’s where the real value is. So the fees, as Alan Weiss says, “fees follow value.” So helping my clients shift their focus onto what is most valuable for my best clients, born out of that, are much higher fees—and a much simpler accounting practice at the end of the day.
Right. You’re dealing with fewer clients, doing the stuff you like, showing the value that you’re bringing to them, so they see how important it is, and you’re able to generate more fees, then. Did I summarize that okay?
Yeah, in a nutshell, that is right.
All right. Nice. And then, so the one thing you just mentioned—I just heard the word, but I’m not sure what context, is “niche.” So when they’re doing this, is it becoming a niche practice? Are they you know, are they concentrated now? “I love working with dentists, and so I know I can do the best possible work with the dental industry.” Am I gonna be a niche accountant now? Is that something that you promote?
Yeah. So among the first steps in the process is to find their niche or their specialization. So let’s clarify the difference: So you can specialize by what you do, and you can niche by who you do it for. In terms of who you do it for, is the more obvious path, because most CPAs are going to stay doing tax and accounting, and they’re going to narrow into a certain industry. So for example, my clients have narrowed into real estate investors and agents, they’ve narrowed into health and wellness coaches like that, they’ve narrowed into creatives, and narrowed into farming. For example, I have one client who is in South Texas—she knows exactly what her farmers, who’re farming 10,000 acres, need. They’re all ag farmers, they’re not cattle ranchers, right? Different sub niche.
[bctt tweet=”Niching is a key part of the process, and it makes your systems inside your business so much simpler. So when you narrow, all of a sudden, it just it makes it so much easier to systematize.” username=”TriMerit”]
By contrast, I have another client who specialized in stock options and RSUs for companies that are about to IPO. Because these folks are about to receive a giant windfall, they have no idea what to do with it. So that’s a specialty. Most of my clients are going to narrow into a niche—it’s more straightforward. It’s what they’re already doing, typically. Where CPAs can get stuck is thinking that niching into, let’s just say professional services, is “nichey” enough. And it’s not “nichey” enough, because an architect is really different from a lawyer, which is really different from—let’s just say—a financial planner. Those are different businesses, different types of people, different pain points, different business models.
So niching into professional services—not “nichey” enough. Pick the profession. If you’re not sure yet. Then pick three within professional services. You can pick architects, consultants and engineers. And that makes it more clear to your buyer. Because one a huge benefit of niching and being really specific, is that your marketing starts to stick. If you’re too general, just “professional services,” your marketing is like Teflon. It doesn’t stick to anything, just goes right on by. And architects don’t think of themselves as “professional service providers,” they think of themselves as architects. And you’ll never get marketing pain points that are painful enough and sticky enough that it’s going to attract the right people.
So niching is a key part of the process, and it makes your systems inside your business so much simpler. Because now you don’t have to have all these processes and try and systematize, like keeping frogs in a wheelbarrow—it just doesn’t work. So when you narrow, all of a sudden, it just it makes it so much easier to systematize. And then you can work on optimizing your systems and making the results better quality and more consistent for your clients. When you get better and more consistent results for your clients, now you start to get more powerful referrals. So the whole thing just becomes an upward spiral.
And I’m assuming niching, too—it’s usually if you’re creating a niche, a clientele that you’re going to work with, it’s a niche that you are passionate about, or enjoy, which obviously then makes it even a stronger practice going forward. Because this is what who I like working with. One example is, if people have listened to the show, I think it may have been Episode 3, we had Josh Lance on. And Josh, his niche is craft breweries, which I want that niche! But his niche is craft breweries, and it was just a really interesting discussion on how—and you just mentioned—the marketing, and how to go the business and how to generate new business. And he also was virtual, and so he could, based on that, he could hire anybody anywhere around the country, and he could get clients anywhere around the country, because he didn’t have to be in front of them. So yeah, I think that’s a great—sorry, I’m taking all your talking time now. But just you made me think of that that niche practice that he built. So I would suggest people go listen to the episode, I think three.
Yeah. And just to tack on to that, you know, one thing that we’ve learned from COVID is now you do not have to work only inside your county or your state, right? Now you can work all across the country and even across borders. So differentiating yourself by zip code anymore and saying, “I’m a generalist, and I work inside 83340,” that’s a terrible market position. If you’re a craft brewer, you can work all across the country now and you can attract those clients, and like you said, we only need a handful.
And though people are intimidated by a niche, and don’t know how to find one, when I work with my clients, we find our niche in 20 minutes. It is so easy, it is right there on the page. But it’s just when you’re steeped in it. When, you know, you can’t see the label when you’re inside your own jar. But I can promise you that it is right there. These people are already on your client roster. It just it’s too obvious to be able to see when it’s you.
Right. And so you mentioned two ways actually: the niche and the specialty. I’m assuming the majority end up with a niche. I think you already said that. Can you give me a percentage of who becomes the specialist rather than the “nicheist?” I don’t think that’s the word, but…
I’m not sure I understand your question—like in terms of percentage, how does it break?
Yeah, let’s say the clients you work with and I know you work with a small percentage of firms and do a lot of work with them. But if you work with say ten CPA firms, nine become a niche firm and one becomes a specialist? Or how would that break down generally, do you think?
That’s my current breakdown is one out of ten who is niched by topic.
Okay! All right.
By specialty sort of, so I just mix it up. I have one out of ten, who has specialized and the the other nine who have niched by industry.
Okay, so I guess maybe to try to maybe wrap everything up—the way we’re looking at this is, you know, someone’s been in practice for a long time, you know: five years, ten years, fifteen years, twenty years, and they’ve been doing things one way. It’s not the easiest to switch, but that way has got them to today, and they’ve done okay, probably done all right. But what you’re saying is that to move forward, we need to look at changing things. And you know, what, what got you here isn’t gonna get you there. Is that the way to look at this?
Yeah, and that’s one of my favorite phrases, and I love that book by Marshall Goldsmith, What Got You Here Won’t Get You There. And, in fact, I wrote an email to my list—I host a daily list for my subscribers, where I send out just one tidbit per day. If people are interested, they can find it at my website, it’s shethinksbigcoaching.com. And I talked about, what got you here—not only is what got you here not the thing that’s going to get you there—but the thing that got you here is the very thing that’s preventing you from getting there.
And the things that got you here are hard work, right? Your work ethic and your willingness to bust your tail and put in your hours. And saying yes to everything, like we talked about earlier. And those two things are in your way now, of getting you there. Because CPAs will do well to get out of is busting your tail delivering services, and start focusing on delivering transformation and outcomes. And start saying no to all but the best opportunities.
I think Warren Buffett said something like, “the difference between successful people and really successful people is that the really successful people say no to just about everything.” And the mindset, once you’re tapped out and tapped out—mindset needs to shift, I got to say no to just about everything, but the best opportunities, so that I remain free to focus on building out my services in a way that maximize and optimize outcomes for my best clients.
Yeah, I think that’s great advice. And I think that’s a great wrap, although I am going to steal a little bit of a wrap-up here just to let you know: what you’ve been saying, the “what got you here” is the way I used to be. I used to be working the crazy hours—I was in public—working the crazy hours just pumping out the tax returns and, and you know, finding that, you know, I had no other way to go. I was capped out on hours. In fact, I was squeezing hours into where they didn’t exist. And that was 15 years ago. And I became that 10 percenter of who you work with, and the specialists, and man that just changed everything. It’s just, I don’t have the crazy tax seasons, I am able to give great advice to clients who very well appreciate it, and been able to grow the business nicely.
So I can attest to what you’re saying works. I maybe not did it exactly the way that you would probably promote me to do it, but we’ve—I think we’ve got there. So I definitely think your advice is great, and people should definitely hear what you have to say. And to that end then, how can people get ahold of you?
Sure. So if people want to find out more about the work that I do, they can find my website at shethinksbigcoaching.com. If they want to start out listening to the podcast—and you can listen to Randy and our episode together, you can find it at Smart Strategy for CPAs. I think it was Episode 135 in that ballpark. So those are the best two ways to find me, or you can also of course, find me on LinkedIn—I’m just Geraldine Carter.
Great. And we will put that in the show notes. And any final thoughts for you before we wrap up?
Randy, it’s been a pleasure connecting with you both of these times, and I love the work that you’re doing. So keep it up.
Well, thank you and back atcha! I think your advice is—really everybody—and honestly everybody can learn from that, whether you’re a one person firm or you’re a top 100 firm in the country. I really think that advice could go a long way.
So thank you for for being here. I look forward to talking again someday. And I want to thank everybody for listening.
Thank you for joining us today. And you can find all the links and show notes for today’s episode as well as more about Tri-Merit at TheUniqueCPA.com. Remember to subscribe and join us for our next episode where we’ll be going beyond compliance into forging new pathways of delivering value to clients, diversifying your revenue streams, and leading edge management techniques and styles.
Randy on the Smart Strategy for CPAs Podcast
About the Guest
Geraldine Carter is the founder of She Thinks Big Coaching, where she helps CPAs get out of the accounting rut, write their own rules, and create the businesses they want to own.
She was co-founder and served as CFO of Climate Ride, using her cashflow forecasting models enabled the nonprofit to raise millions of dollars for climate change efforts. Geraldine helped build Climate Ride from the ground up to a seven figure operation in six years.
After seeing how many small businesses suffered at the hands of their too-busy CPAs (and being one of them), Geraldine founded She Thinks Big Coaching. She now coaches CPAs to stop being so busy for the masses, and start making a real difference in their select clients’ businesses, while making their own business more profitable and more sane.
Geraldine earned her Bachelor’s in Civil and Environmental Engineering from Cornell University in 1998. She earned an Associate Coach Certification with the International Coach Federation in 2015.
Meet the Host
Randy Crabtree, CPA
Randy Crabtree, co-founder and partner of Tri-Merit Specialty Tax Professionals, is a widely followed author, lecturer and podcast host for the accounting profession.
Since 2019, he has hosted the bi-weekly “The Unique CPA,” podcast, which ranks among the world’s 5% most popular programs (Source: Listen Score). You can find articles from Randy in Accounting Today’s Voices column, the AICPA Tax Adviser (Tax-saving opportunities for the housing and construction industries) and he is a regular presenter at conferences and virtual training events hosted by CPAmerica, Prime Global, Leading Edge Alliance (LEA), Allinial Global and several state CPA societies. Crabtree also provides continuing professional education to top 100 CPA firms across the country.
Schaumberg, Illinois-based Tri-Merit is a niche professional services firm that specializes in helping CPAs and their clients benefit from R&D tax credits, cost segregation, the energy efficient commercial buildings deduction (179D), the energy efficient home credit (45L) and the employee retention credit (ERC).
Prior to joining Tri-Merit, Crabtree was managing partner of a CPA firm in the greater Chicago area. He has more than 30 years of public accounting and tax consulting experience in a wide variety of industries, and has worked closely with top executives to help them optimize their tax planning strategies.