By Allan Boress, CPA, CVAExactly how did Bernie Madoff build his business? You just don’t wake up one day on the way to be indicted and have a $50 Billion practice. And, nobody turned this book of business over to ol’ Bernie as so often happens in our profession.
Rather, we can look at how he built his business, step-by-step and then emulate it to build your own, or how to start and grow a niche.
Nobody showed me how to develop an accounting or consulting practice. Back in the day, there weren’t any decent books or tapes about it, as nothing of value had been written for CPAs. So I had to invent it as I went along. Being an auditor by training, I noted diligently what worked – and didn’t. The end result was two books, “I-Hate-Selling” Bookfor the face-to-face interview and closing side), and Best Practices of Marketing Professional Services, co-authored with Mike Cummings.
Let’s take a look at how to build a $50 B practice, from scratch…
Step 1: Find anyone to be a client. The first handful are going to be golden, as they will be the basis for your anecdotal, or actual, case-studies. As a young man, Bernie probably worked his “warm market,” as financial people are taught to do. He went to his family and friends and neighbors and anyone else who knew him and told them he was now doing investments, and did they have some money they would like to try with him?
In starting a new business, I don’t care what you have to do (legally) to get those first notches under your belt.
Step 2: Do a bang-up job THAT IS ACKNOWLEDGED. Many clients leave CPA firms that are giving them good work product and service, but the client doesn’t know it…
Before, During, and After, you have to keep the client on point to realizing that what you are doing for them is beyond what could be expected. Establish goals walking in, keep the client informed during the process, then explain to them what you did that is of value to them (e.g., what you do that others might not, how thorough the process was, where the client will see benefit).
Mr. Madoff probably produced good results, and then asked those clients if he could use them as a reference. In my experience, people are delighted to help out in this way if they have seen the value in what you did, especially compared to what there were receiving or could reasonably expect.
Step 3: Ask for referrals. People like to help other people, it is just part of being human. So many times in our practice, people will call, or come in for a casual conference. Repeatedly, they will ask what they owe, and we will tell them “Your prayers and your referrals.” This might be why we are the fastest growing firm in our geographic area, averaging a new client per day.
It’s much easier to have others do the selling for you. Eventually, as with Madoff, as your business increases and the quality of clients improves, you wind up with “machers” as Madoff did (big shots doing the selling for you). After 30 years of consistent (but phony results), Madoff had people with money making referrals to him. This eventually led to 12 Golden Geese (the feeder funds and money managers you have been reading about in the paper).
Step 4: Pick your niche. Not sure how this happened for Madoff, but it usually has fallen down to here for us in the various iterations of our practices over the years. People want to buy from people who are similar to them (96% of African Americans voted for Obama). Similarly, Madoff specialized in the high end of the Jewish community. Also, people want to buy from people who know their business.
Step 5: Replicate as above steps 1-4, and never be satisfied. Most CPAs grow their practice to a certain point and stop. They don’t realize that marketing allows one to constantly raise fees and upgrade the quality of client. Just yesterday, I found out that a client from last year had dropped off their stuff for their 1120S. I had my partner call them and ask for a retainer that was twice what they paid us last year. Even though we are staffed up and probably could have gotten the work out without any blip in our schedule, I knew they weren’t going to be our client this year unless they paid for being the high-maintenance people are. They came by and picked up their stuff – great! Now they can drive someone else nuts. I was free to do this because there will someone coming in right behind them, due to our consistent, effective marketing.
Put the $50 Billion Man’s marketing plan to work for you. Legally, of course!
By Allan Boress, CPA, CVA – author of The “I-Hate-Selling” Book, available at amazon.com