Being Black Doesn’t Mean I’m Cheap
Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. - Romans 1:37, ESV
Per the AICPA’s statistics, there are approximately 650,000 CPAs in this country and less than 5,000 are black. We also know from the AICPA that less than 1 percent of CPAs that are partners or owners of CPA firms are black.
Hence, with being a unicorn in the industry, this makes us a target of predatory pricing by unscrupulous business owners looking to save a dollar or two. Here are some real examples below, where identities have been hidden to protect the guilty:
Scenario One: I worked for a tech startup led by an African American man. We had a contract with fees of $5K per month and then we got this email…
…I will also reduce each one of your consultant fees by 50 percent of its current rate. These measures, including one more, will add approximately $10k/mo to keep on hand. I appreciate the fact all of you have another main source of income where a decision like this can be made with only moderate impact… Thank you for your skill, passion, and understanding.
The client terminated me and hired a predominately white accounting firm and paid them the $5K that I was asked to give 50 percent back. Before our contract ended, we found he embezzled money from his investors to pay for his Ivy League MBA and is facing potential litigation and/or prison for that and other securities laws violations, so we dodged a bullet.
Scenario Two: We had an existing client that we had for some time, a Caucasian Gentleman, that was on the verge of building a $40 million apartment complex in the south. We had submitted a fair contract to help them with their opportunity zone compliance. We were told that our offer was going to get rubber stamped, but instead we got this note:
…This is a busy group. We are honored that you would be willing to take our small project on. We hope at some point we will be in a position of needing a firm such as yours. As for today, as a startup it is not in our budget. We truly appreciate your time and the effort put forth to prepare the Engagement Letter. We wish you the best of luck and we will keep you in mind as our paths cross others that need the sophisticated services of a firm such as yours.
That was a heavily coded message for saying “we don’t like your price.” But the same client then hired a firm that charged more money than us for less services, despite our long-term relationship. Yes, that firm was also predominately white as well. Sadly, I’ve learned the expression about “White is Ice.”
Have the above events stunk and hurt? Absolutely! However, I’ve bounced back and my firm is still growing strong! Here are some tips that have helped me endure these things and thrive and I thought I’d share them with you below:
Google Your Competitor(s). Yes, go on Google Maps and find firms within a 10-15-mile radius of your market. At my firm, once a year we have someone on the team who checks on the prices of our top competitors within a 10-15 radius of our offices in San Diego, Los Angeles and Austin.
They use a phone that is not associated with the firm and they gather that information. We then compare those rates to what we charge. This is important because often times we have people claiming that such and such firm is charging say $200 for a Partnership Return when we know it’s not true and we’ve done the research to rebut such lies.
Collaborate with Other Professionals. I have relationships with CPAs of other ethnicities around the country and I’m also in a CPA mastermind group. This is important as this helps me be aware of what fees are charged and why, so that my firm’s fees are in line. Some items we do charge more for because it’s our niche and specialty and some items we charge slightly less but overall, we tend to stay within a reasonable range of plus or minus 10-15 percent.
Get a Business Coach. Why? Because you will get rejected a lot and you will endure unfair criticism and need a voice that is on your side that can help you get out of your head. They will also provide you with tools on how to build a better rapport with clients and prospects that, in the beginning, may not see you as equal to the typical Caucasian male CPA.
Get a Therapist. This may sound corny, but most of us minorities and women have endured some level of trauma in the workplace before we started our business or will continue to. When I first started, I had a woman in San Diego spread a rumor that I never sat for the exam and it nearly killed my practice.
We had to send a cease and desist letter with my AICPA Board scores to her and others to prove I actually sat for the exam. These professionals help you process events like this and ensure that you do not take out those frustrations on clients, your staff or contractors unknowingly. Mental health is critical to success.
Stand Firm. After you’ve done all the above, you have to stand firm. If you waffle in giving pricing to clients, you’ve lost your integrity. It’s okay to be flexible, but you can’t give in on everyone. Rolls Royce and Apple haven’t significantly lowered their prices during the pandemic and neither should you.
Remember, your business is not a commodity, but a service that is helping other businesses and/or families not only save on taxes, but preserve and build multi-generational wealth.
Eric Pierre, CPA is the man behind Pierre Accounting. Eric graduated from Stephen F. Austin State University with a master’s in professional accountancy and a bachelor’s degree in business administration in accountancy, with honors. He has been featured in Forbes, Spectrum News, and...