When Frank read my post “Compounding works on expertise just like it does on money” he had an upside-the-head moment.
He told me during our virtual coffee that it was as if I had seen right into his business.
Frank, the owner of a fractional CFO firm, took pride in the detailed process they’d developed for getting clients started.
Reading my words “starting every client from the beginning means you aren’t leveraging your own accumulating expertise” hit him hard.
The firm was 5 years old, they successfully delivered impressive life changing differences to several dozen companies, and yet, they started each one the exact same way today as they had done 5 years ago.
As Frank quickly realized, they were not growing to their potential because of this. Hourly billing was holding them back as well.
Rethinking the first step
They had to rethink what the first step could look like and also begin to meet companies who were ready for that new, more advanced, first step.
More advanced meant delivering more significant IMPACT, which would lead to higher fees for Frank’s firm.
The first step was to write a new description of their great fit client.
- Firms with higher revenues ($7-10 million instead of 2-5 million)
- Who served their own clients with more complex expertise.
Frank met the Owner of a dental practice that had grown from 1 dentist and 1 hygienist to three dentists and plus several professional team members.
The Owner mentioned to Frank that while revenue was increasing, profit never grew.
This conundrum is music to a CFO’s ears!
Frank knew that his team could help this dental practice understand that while the number of patients increased, and the range o f services they offered expanded, their costs were also increasing at the same rate.
This cut into profits.
Frank quickly saw opportunities for increasing profits.
The dentist was also a pretty good businessman, who didn’t need to be brought along slowly.
Frank and his team began the engagement with more complex analyses than they’d been doing with their smaller clients.
The Owner loved this and bought into their recommendations quickly.
After several months, the Owner was highly confident making decisions about the practice: where to expand and, most importantly, what to discontinue. He also did not want to start at the beginning with every patient.
Frank told me last week that setting his firm’s starting level about three steps up from where they had been for the first 5 years was generating higher fees and more profit.
“I wish I’d worked with you sooner, Susan” he said.
Since time machines only exist in fiction, he can’t go back.
Neither can you.
But you can start today, compounding your expertise and ability to deliver ever more significant IMPACTs to your clients, and earning higher fees yourself.
If you study this image of a staircase, you’ll see the effect of compounding on revenue.
When each period’s revenue is 20% more than the previous period, progress is impressive.
This is the effect of compounding on money.
And compounding works the same on your expertise.
The one penny of interest earned today, and added to the principal, generates more than a penny of interest tomorrow.
The IMPACTs you deliver to each client, when added to your foundational expertise, should generate more IMPACTs to the next client.
But YOU have to make that happen.
Be like Frank…
Build on the IMPACTs you deliver today. Find clients who want that and deliver greater IMPACTs to them. Charge proportionally and your own fees will increase.
Need a lift or a boost? Text COMPOUND to 703-801-0345 to start the conversation.
