State of the Economy - For Accountants
What Does the State of the Economy Mean for the Accounting Industry?
Or more specifically, the solo accountant industry?
This is the question that’s been rolling around in my head this April.
If you just got your head above water post-April 15th, first of all…welcome back! Second of all…welcome to the roller coaster. Hop aboard! The stock market has been on a wild ride (don’t check your 401k this month) and the word “tariff” has likely been Googled more times than “how do I file an extension”.
In all of the industry noise I’m exposed to, I don’t hear a bunch of noise on the effects to our micro-niche industry. It’s one of those moments when I start doubting myself…”Am I crazy? Am I the only one seeing this? Am I the only one feeling this? Is it just my clients in a tailspin right now?”
If I am crazy, you can stop reading here and get some time back for the rest of the day. :o)
I absolutely don’t know where this roller coaster train is going, but here’s what I’m seeing in the now:
Sales pipelines drying up - my service-based business clients have been watching their sales pipelines dry up since fall. Months ago we were seeing the effects of productization of services in their industries - ones they use to charge premium fees for - driving prices down, then tariff war and stock market fears seized up funding that stoked the fires of my clients’ clients’ (not a typo) businesses.
Small business layoffs - I’ve walked through layoff discussions with my top tier clients this month. Cuts have already been made in early April…more cuts pending in summer if sales pipelines don’t improve
Cash is burning - clients are cutting all expenses they can to save their cash reserves (see #1 and #2)
So what does this all mean for the solo/almost-solo accountants?
We will be (or already are) affected - these things trickle-down. Current businesses will start looking for more affordable solutions…including accounting services. TBD on how new/startup business will view accounting prices. Will new businesses find new profitable niches in this new economy? Will they need premium accounting and finance professionals with premium rates? Time will tell.
We need to be nimble - I love a good “slow and steady wins the race” story, but when an economy is changing daily and can turn on a dime, it pays to not sit back on your heels. Will clients and prospective clients show more interest in your lowest tier pricing option? Maybe…be ready for it.
You will need new solutions - Clients will face new problems, so we will be asked for new solutions. I think accountants (and bookkeepers especially) often times feel afraid to speak up. You have a solution or idea, but what if it flops? So you don’t say anything. Or what if it really helps your client and shows them you’re truly there to serve their best interest. Don’t be afraid to gently (but confidently) offer an idea.
Be ready to pivot on pricing - If you’re one of the costs your clients are looking to cut, be ready to offer a more affordable option for them. That means lower price for lower services, not lower price for same services. It’s usually easier to keep a current client than find a brand new one.
I hope you know me well enough that I don’t bow down to the gods of fear-mongering headlines and doom-and-gloom. That’s not what this email is intended to be. This is just want I’m seeing on the ground, happening right now.
And at the end of the day, I have an immense amount of faith that everything will work out and we’ll all be okay. Truly.
Erica