Recently, Alan “Blake” Blakeborough, Founder of Tax Titans, and I had a chance to have a thought provoking conversation about the value of strategically transitioning the bottom 10-20% of clients in a CPA firm- and how to do it professionally.
Most CPA firms pour their heart and soul into serving their clients. But what happens when certain clients cease to be a good fit, yet we feel obligated to keep serving them out of loyalty or guilt? These unprofitable clients can take an immense emotional toll on firm owners and staff. They sap your energy, creativity, and patience. They demand disproportionate time and resources, reducing your ability to serve ideal clients. Yet severing ties is difficult.
Recognizing When a Client No Longer Fits Your Vision
A challenge many firms grapple with is acknowledging when a client no longer aligns with their vision or niche. Over time, every firm amasses a set of clients that, for various reasons, cease to be profitable. They may have been a perfect fit in the past, but circumstances change. These “C or D” clients can significantly impact a firm’s overall profitability. They can cause distractions and lead to unnecessary burnout, particularly when they demand more time and effort than they’re worth.
Every firm has a “John”
John has been with your firm for over 20 years. But as you’ve grown into a niche, technology-driven firm, John’s needs no longer match your expertise or vision. Serving him requires triple the time of your average client, and his fees barely cover costs. Still, letting John go feels like a betrayal of your long relationship. You struggle with guilt at the thought of “firing” him.
The truth is, keeping unprofitable clients out of obligation hurts your firm and prevents growth. It leads to burnout, frustration, and a lack of work-life balance. It hampers your ability to maximize the potential of your top clients. And it sends the wrong message to staff about priorities.
Fortunately, there’s a solution. The Tax Titans Client Transition Program provides a way to ethically transition unprofitable clients like John, while ensuring they receive ongoing quality service. Tax Titans will take over the tax compliance work for clients selected by you so you can re-focus on ideal clients. You’ll be compensated, and you can remain as involved as you wish.
This solution provides emotional relief and empowerment. You’ll reduce feelings of guilt, obligation, and being stretched too thin. Your energy will be reignited, and staff morale boosted, by serving the right clients.
Evolving your firm requires making tough decisions in line with your vision for the firm’s greater good. The Tax Titans program provides a mechanism for professionally transitioning unprofitable clients, so you can achieve the perfect balance of fulfillment and growth.
The Crux of Strategic Client Selection
By being strategic about the clients you want to transition onto the Tax Titans platform, firms can free up more resources to focus on the more profitable clients that align with their service niche and firm strengths. This is about business evolution. It’s about formulating, communicating, and implementing a strategic vision and mission.
Managing Your CPA Firm as a Profitable Business
Ultimately, managing your CPA firm as a profitable business means working with the ideal clients for your firm and recognizing when to part ways with those who no longer fit that profile. Thanks to Tax Titans, firms are now able to do just that.
In EmpowerCPA™, we teach the POWER model: Prepare, Optimize, Win, Evolve, and Results. Strategic client selection is an important step as your firm evolves as a profitable business. Saying goodbye to clients who no longer fit is hard, but Tax Titans allows you to do so with empathy, professionalism, and care.