In his book, Thiel contrasts secrets between conventions and mysteries. He contends that conventions within business are easy to uncover (like, you should use a CRM to manage your client’s information), and that mysteries are impossible to uncover (like, you will make a lot of money if you can predict what the stock market will do tomorrow). He makes a point that secrets are not easy to discover, yet they are not impossible. You will not stumble into secrets – if they are to be found, then you must search for them.
Our profession, and most businesses, believes that there are no longer any secrets to discover. Thiel talks about possible reasons why people believe this, but suffice it to say that this is a false assumption for business owners to make. It is in fact a dangerous assumption, because if you believe there are no longer any secrets to discover you will be committed to staying the same- running your business with fear, and relegated to the status of a commodity.
Before I share the one big secret that large CPA firms don’t know, let me share a few ideas that I would classify between conventions and secrets. I’ll classify these as False Assumptions because they would be easy ‘secrets’ to discover if firms actually believed they were true.
False Assumptions of our profession:
1. There are no great people for firms to hire. This will be easy for firms to correct once they stop making the assumption that the problem is with the market place and the hiring pool. The problem lies within firms.
The truth: Great people are looking for great firms. Said another way, great firms attract great people. There are few great firms to be found.
2. The competitive market is pushing down firm prices. Great companies will always be able to out-price their competitors. Always. This assumption can be overcome when we realize that we control our prices, and that a market is not to blame.
The truth: Great firms focus on the value they sell, not the service. When we begin explaining our value, and demonstrating that what we are selling is different from all other firms, then we will be allowed to raise our prices.
3. Firms need to become more efficient to become more profitable. Seeking efficiencies may help us to eliminate stupid, inane behaviors in our firms, but this is a job that any smart employee can point out in the next company meeting.
The truth: Great profit creation does not come from doing fast things faster, but from increasing the value we offer our customers. Often, inefficiencies will be a result of this, and must be tolerated.
4. Technology is setting apart early-adopting firms from laggard firms. Technology has become a major distraction in our profession. To prove this, firms have begun naming themselves after the technology they use. Further, some firms have even begun building their own software dashboards (Are you a professional firm, or a technology company?) It’s true that well-designed cloud-based products like Xero, Avalara and Zoho Books are the best products to use. But using them won’t guarantee a customer that you can transform them. Customers want to buy transformation.
The truth: The thinking and beliefs of firms, and the process by which they transform their clients, is what sets one firm apart from another. Technology is a tool. You can use great tools, or poor products, but a firm’s focus must always be the transformation of their customers.
Now to the 1 big secret that large firms don’t know:
Our customers have changed.
The CPA profession is changing in so many ways. We’ve already talked about a few false assumptions our profession has adopted because of this fact. In fact, the whole world is changing at a very rapid pace. But the knowledge that our customer has changed is a tectonic shift in the (1) permissions, (2) opportunities, (3) customer desires, and (4) dangers before our great profession. Let’s explore these four areas.
We are serving new customers now, with a new awareness of technology, and a stronger familiarity with the effect a brand has on a firm. We are allowed to do amazing, new, and sometimes crazy things. In essence, we have permission to do things that seemed crazy just 5 years ago (like operate 100% virtually). With this permission comes an obligation to do what no other firm is doing. Larger firms seem the most locked into doing things the way they did them in 1975. Hello?! Our customers have changed since 1975. You have permission to change too.
Firms have before them an opportunity to craft a type of firm that has never existed before. Do you want to exclusively serve companies solely crowd funded by Kickstarter? You can. What if you want to become the accounting firm that serves Crossfit gyms across the country? Do it. The opportunities will be taken by some, and will be ignored by others. In particular, large firms are ignoring the massive opportunities they have to make a brand new firm. But the fear of being forced to disrupt their large, bulky business model keeps them locked in the past, while great opportunities pass them by.
Customers want something new. And they will pay more for the privilege of buying something new and valuable from our profession. I’ve seen it as Thriveal firms are experimenting with this truth daily. If our customers are different, then you will find that their desires are also brand new. It is our burden to create, craft, market, and sell this new thing to the new customer with new desires. The revenue of large firms is unfortunately so reliant on selling accounting, tax preparation, audits, and payroll that they can’t see their customers want something deeper. Customers want and need transformation.
The revelation that our customers have changed has a dark side. Customers will find what they are looking for, because there will always be an innovative firm willing to sell them what they truly want and need. The danger to firms, particularly large unwieldy firms, is that they will be left behind. Large firms are lulled into the belief that everything will remain the same. But heed my warning that our customers have changed. You must change too. Though our profession’s generations have never seen firms close down for market reasons, I believe that day is coming.
Secrets are worth seeking out. Have you learned any new secrets about our profession from this article? What can we do now?
Jason is the Founder of Thriveal and the Chief Innovative Officer of his CPA firm, Blumer & Associates. He is the co-host of the Thrivecast and The Businessology Show and speaks and writes frequently for CPAs and creatives, his firm’s chosen niche. Jason loves to watch documentaries on just about anything. He lives in Greenville, SC with his wife and their three children. Stay connected with Jason by signing up at JasonBlumer.com.