The firm down the road charges £800, so you charge £800
You have wanted to put your fees up for a while. Then you think about the other firms your clients could walk to, and what they charge, and you leave your prices where they are.
Nearly every firm owner stuck under a ceiling describes it the same way. Everyone round here charges about the same. That must be the price.
It is not the price. It is what is left over when a prospect cannot tell four firms apart.
What a prospect does when nothing separates you
Sit on their side of the table for a moment. They have spoken to you and to two other firms. All three are qualified. All three were perfectly pleasant on the phone. All three will file the accounts and the return, on time, correctly.
Now they have to choose one. What have you given them to choose on?
If the honest answer is nothing much, then they will choose on the only thing that is visibly different between the three of you, which is the number at the bottom.
That is not a market rate. A market rate is what something is worth. This is what happens in the absence of a reason.
Which means the firm down the road is not holding your ceiling down. The lack of any difference between you is.
They are not price sensitive. They are value sensitive.
"My clients will not pay that" is the most common sentence in a pricing conversation, and it is almost never actually tested.
So look at the same client outside your office. They are driving a car they did not have to buy. They have the newer phone. They went somewhere on holiday that cost more than your annual fee, and they will go again next year.
Nobody walks into an Apple shop and asks whether there is any movement on the price.
They are entirely capable of paying more for something. What they have not been given is a reason that yours is worth more. That is not a failing on their part, it is a communication problem, and it belongs to us rather than to them. It is the same gap as the one between what firms think they sell and what clients think they are buying.
The firm you are measuring yourself against
There is usually one specific firm in mind. Bigger, busier, been going longer, charging about what you charge and apparently doing well on it. If he can only get £800, the thinking goes, then £800 must be the number.
You can see his client list. You cannot see his margin, his write-offs, how long his work sits in progress, or what he actually takes home at the end of it.
One firm owner told me his benchmark was a large local practice he admired. It also turned out the man ran it on 70 hours a week. He himself wanted to work ten.
Measuring your fees against another firm only works if you also want their business. Most of the time, when you look properly, you do not.
Narrowing is not the same as turning work away
Suggest specialising and the same objection arrives within about ten seconds. So if an e-commerce client walks in next week, I turn them away?
No. Price them. Take them if you want them.
A niche is not a door policy. It is a decision about who you go looking for and what you become known for, and there is no revenue lost in making it. What changes is where your marketing points, not who you are allowed to serve.
It matters because when you try to appeal to everyone you appeal to nobody. "Accountants for small businesses" tells a landlord with nine properties nothing at all. "Accountants for property investors with two to fifty properties" tells them they are in the right place, and it makes the fee a much smaller part of the decision.
You also do not have to leave the market you are already in. If your work comes through one referral network, the answer is not to abandon it. It is to stop being one more general practice inside it and become the firm that network sends its property people to. Inch wide and mile deep, in the same pond.
You already have the expertise
The next objection is about credentials. We would need two years of research into stamp duty and capital gains before we could call ourselves specialists in anything.
If you already act for sixty property companies, you have done the two years. You did them one client at a time without labelling it.
No client has ever asked to see the reading behind the advice. They want three things: the headache gone, a tax bill lower than it would otherwise have been, and somebody who picks up the phone.
Think about the last time a client rang about buying a commercial property, worried about the VAT on the purchase price, and you spent five minutes explaining how a transfer of a going concern works. That conversation saved them thousands of pounds. It appeared on no invoice and no timesheet.
That is the expertise, and you are giving it away already. Positioning is just the act of saying so out loud, before the client has to find out by accident.
A price out of a system is itself a positioning move
Positioning changes what somebody is willing to pay. A pricing system changes whether you can ask for it without your voice going up at the end.
A price that comes out of your head on the day sounds like a price that came out of your head on the day. It invites a negotiation, because it is audibly negotiable.
A price built in front of the client, from their own circumstances, does not. Two properties is this. Five is this. Ten is this. Bookkeeping on top, payroll on top, registered office on top. Scope drives the number, and the client watches it happen.
Two useful things follow. They can see what they are paying for, itemised, rather than one lump they have to take on trust. And they can see the number came from their situation rather than from your mood that morning.
In a close-knit market where clients talk to each other, the second one carries more weight than most firms expect. A good deal of haggling is not really an attempt to pay less. It is an attempt to find out whether they are being treated the same as everybody else. A system answers that before they have to ask, which is also why giving way on the number once is so expensive.
None of this is a compromise on value-based pricing. Charging by the number of properties, employees or transactions is the scope of the work driving the price, which is exactly what should drive it. It is pricing on time that is the problem, not pricing on size.
Then say it monthly
One mechanical point to finish on, because it is the cheapest increase available to you.
£800 a year is £67 a month. Quote £95 a month instead and you have raised your fee by a little over 40 per cent, and it will land more softly than the £800 ever did.
It also stops you funding your clients. Take somebody on today, file nine months after their year end, invoice, then wait to be paid, and you can be the better part of two years from winning the work to seeing the money. No other profession lends like that.
The part nobody wants to hear
Every firm owner who tells me their clients will not pay more has one thing in common. Not one of them has asked.
They have worked out the answer in advance, on behalf of a client who was never given the chance to respond, and then priced accordingly for years.
The ceiling is not your market. It is the highest price you have so far been willing to say out loud.