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Understanding Pricing and Value with Stephen King

On today’s episode, Stephen King, president and CEO of GrowthForce, joins Dr. Sabrina and her co-host, Mike Bruno, for an illuminating conversation around pricing.

Should you discount during this economic downturn? Listen in to this discussion to hear compelling reasons why you should NOT discount, and what you should be doing, instead.

Top executive at a Fortune 500 company. Bootstrapped CEO. Venture-backed tech startup founder. Non-profit fundraiser. It’s safe to say Stephen King is not your traditional CPA.

Stephen is president and CEO of GrowthForce, one of the nation’s largest providers of outsourced bookkeeping and controller services. Regarded as an industry thought leader by AICPA and CPA.com, his ability to visualize the future of accounting has lead GrowthForce to become one of the fastest-growing companies in America.

His experience at the forefront of technology development and accounting system design spans nearly three decades. In 1995 he founded Virtual Growth, the nation’s first cloud-based accounting service, and quickly grew it into a market leader. After being acquired by Insperity, Stephen was brought on as president of Insperity’s Financial Management Services division, serving two years before leaving to build GrowthForce.

He also spent seven years working at Amnesty International USA—first overseeing 300 percent growth as CFO, then raising over $20M a year as Director of Development. Stephen’s time at Amnesty reinforced his life-long commitment to giving back to the community. As a result, non-profits represent 35 percent of GrowthForce clients.

Profit by Design is a Tap the Potential Production in collaboration with Small Business Consulting Group.

Show Highlights:

  • Business owners are feeling a lot of pressure in this new normal.
  • Pricing is harder if you’re not confident of the value that you’re bringing.
  • Stephen addresses the issues around discounting, then provides the math:
    • If you have a 40 percent gross profit and you give a 10 percent discount, you need 33 percent more sales to generate the same bottom line.
    • If you have a 30 percent margin, you need 50% more sales to generate the same bottom line.
    • If you have a 40 percent gross profit and you ADD 10% to your pricing, you can sell 20 percent less and make the same money.
  • When Stephen let an objective person price his jobs, his fees started going up.
  • Stephen shares some case studies and classic mistakes from clients that allow him to share their data.
  • The accounting industry was designed for compliance.
    • Financial accounting is designed for external users. For example, it is your CPA’s job to help you pay as little in taxes as you’re legally allowed to, to get you through an audit, and to keep the banks happy.
    • Management accounting is about internal users and about understanding your unit economics, the profitability on each job.
  • Stephen explains the benefits of automated activity-based costing and cautions against time-leakage.
  • Things to consider to gain confidence in pricing appropriately:
    • Stephen offers accounting system suggestions to set up reports to show you your “income minus your cost of goods sold equals your gross profit”. Your gross profit percentage is the most important number of every financial statement. This will tell you if you’re pricing right.
    • Which clients should you fire? Which clients should you re-price?
    • How do you spend money to make money in sales and marketing?
  • Dr. Sabrina explains the 80/20 principle: 20 percent of your clients and customers are responsible for 80 percent of your revenue. If you focus on increasing revenue from the top 20 percent by 25 percent, you’re at choice and you can get rid of 80 percent of your clients and customers.
  • One mistake is to think that your biggest account is your best client.
  • When you have the appropriate margin in your pricing you are able to run a much more simplified, streamlined business.
  • Whatever you do, don’t discount your services during this economic downturn. Don’t make decisions based on fear. You need to have an attitude of gratitude.
  • Surround yourself with people who have a positive mindset and who are looking for growth.

Links and Resources:

Taking care of yourself is important now more than ever. Are you ready to take your life back from your business?

The FIRST STEP is taking our Assessment at:

https://www.tapthepotential.com/assessment

NEXT, meet with our Success Team Lead to debrief your results.

THEN, join our Better Business, Better Life™ program!

Get the Book!! How to Hire the Best – Contractors Edition
www.TapThePotential.com/book

How to Hire the Best Toolkit

www.TapThePotential.com/Toolkit

Get Your 2020 Action Planner Now!

The Pumpkin Plan Action Planner 2020

https://www.tapthepotential.com/planner

Dr. Sabrina’s WEBSITE

Dr. Sabrina’s PODCAST – PLEASE RATE & REVIEW!

Profit by Design, a Tap the Potential production in collaboration with Small Business Consulting Group

For Resources & Tools from Sponsors – https://www.profitbydesignpodcast.com

Subscribe & Share Podcasts! – https://www.profitbydesignpodcast.com/podcasts/

Facebook Grouphttps://www.facebook.com/groups/ProfitByDesign/

Calm App

Maslow's Hierarchy of Needs

Are You Leading with Love or Know Another Entrepreneur Who Is Being a Gift from Their Gifts During This Time?

Please use hashtags #leadwithlove #beagift and we will be re-posting these social media posts!

Books Mentioned:

The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field by Mike Michalowicz

Connect with Stephen!

Stephen’s Website – Check Out His Evergreen COVID-19 Resources!

Stephen’s LinkedIn

Stephen’s Twitter

About The Author

Dr. Sabrina Starling, The Business Psychologist and international best-selling author of the How to Hire the Best series and The 4 Week Vacation™, is the founder of Tap the Potential and host of the Profit by Design podcast. At Tap the Potential, we work to free business owners from the constant demands of a growing business.

We believe work supports life, not the other way around. Clients in our Better Business, Better Life coaching program have more time for what matters most and more money in their bank account than they’ve ever had. Next, we send them off on a 4 Week Vacation™ to celebrate their hard-earned journey to take their life back!

Dr. Sabrina and her team at Tap the Potential are on a mission to change the story of entrepreneurship from one of long hours, grinding it out, to one of sustainably profitable businesses that support and enhance life. The Tap the Potential Solution™ and our Tap the Potential Family of Business Owners are disrupting small business as usual. We are on our way to making the Tap the Potential Solution™ the mainstream model for growing business.

By 2023, 150 Tap the Potential clients will have taken 4 Week Vacations. These are the trailblazers, role modeling what’s possible for entrepreneurs. In many entrepreneurial circles, it is becoming more and more common for one entrepreneur to ask another, “Have you taken a 4 Week Vacation™?” (as opposed to asking “How many employees do you have?” or “What is your annual revenue?”). Taking a fully unplugged 4 Week Vacation is rapidly becoming the recognized symbol of entrepreneurial success.

Never one to accept the status quo or back down from a challenge, Dr. Sabrina’s How to Hire the Best series grew from her desire to solve the toughest hiring challenges interfering with her clients’ growth and profitability. What sprang from her experience working with entrepreneurs in rural areas catapulted her into becoming the world’s leading expert in attracting top talent in small businesses—no matter what hiring challenges those businesses are facing—and earned Tap the Potential’s reputation as the go-to resource for entrepreneurs committed to creating Great Places to Work with thriving coaching cultures and highly engaged team members working from strengths.

As The Business Psychologist, and with her years of driving profit in small businesses, Dr. Sabrina knows what it takes to find, keep, and motivate exceptional performance out of your biggest investment—team members.