Lots of exciting AI action this week in the world of accounting including the fact that this may end up being my final newsletter.

That is (gasp) on how you interpret a recent announcement from the AI overlords (skip to the AP news announcement below).

TL;DR: Its man versus machine and I’m just getting started baby!

So PLEASE be sure to share this newsletter so AI doesn’t take my job. 🤓🔥🤖

One Hour, $32K, Endless Growth: The Productization Path

Imagine unlocking $32,000/yr with just 1 hour a day of work.

Here's how step-by-step leveraging two very powerful concepts:

Productization + The Pareto Principle

The Pareto Principle (aka The "80/20 Rule") states that 80% of your results come from 20% of your efforts.

"Productization" allows for a standardized method of creating, producing, and distributing the creative or intellectual capital being offered to current clients.

The goal is to take a service and package it in a way that it earns additional revenue without a lot of added cost or labor time with increases in sales.

Lazy? Maybe. Smart? You betcha. 🤓

In a nutshell productization involves taking tasks that are performed frequently and require little sophistication then turn them into a digital product.

Let's just use a typical bookkeeping firm as an example.

Here's a 4-step productized service funnel break-down (in this example assuming your bookkeeping business has 300 prospects/leads per year):

1. Lead Magnet
Start your journey with a robust website lead magnet (i.e.: "Small Business Owner’s Guide to Bookkeeping Basics")
- 300 prospects opt-in for the bookkeeping basics ebook
- 60 prospects (20%) download and read the ebook (active leads)

2. Digital Product
Offer a one-time valuable product to your active leads (i.e. "DIY Bookkeeping Template Bundle"):
- Offer the $39 DIY template bundle to the 60 active leads
- 15 prospects (25%) purchase the bundle
- Revenue from digital product: $585

3. Service Consultation
After a customer purchases your digital product, they become qualified for additional high-value services.
- Offer the 15 template buyers a 1-hour QuickBooks consultation for $250 (one-time fee)
- 9 buyers (60%) purchase the consulting service
- Revenue from consultations: $2,250

4. Ongoing Bookkeeping Services
Consultation customers are now qualified for your core monthly bookkeeping services.
- 6 consultation customers (67%) sign up for $400/month bookkeeping services (4 hours per client)
- Annual revenue from ongoing services: $28,800
- Total hours per month for ongoing services: 24 (4 hours per client)

Total Revenue: $31,635

Total Hours Spent: 297 hours

Hourly Rate: Approximately $106.52

Hours per Week: Approximately 5.71 hours

Hours per Day: 1.14

With a total revenue of $31,635 and spending just 5.71 hours per week (just over 1 hour per week day), the growth potential is extraordinary.

This is how you transform your practice with productization.

Imagine earning over $31,000 a year by dedicating less than six hours a week to specific clients.

That's the transformative power of productization, amplified by the wisdom of the 80/20 rule.

This 4-step funnel is not just a strategy; it's a blueprint for success.

It enables you to work smarter, not harder, focusing on what truly brings value and growth to your business.

Productization is more than a trend; it's the future of accounting.

You will build stronger relationships, deliver unparalleled value, and watch your practice thrive.

The possibilities are endless—let’s look at some examples.

Here are three more ideas to get your dopamine ignited:

Product #1: The Tax Report Card ($250-15,000)

Quite a range in fee, I know. The way this works is promoting a Tax Report Card service for a minimum fee (typically about $200) where the deliverable is a summary of recommendations.

For prospects where you see a significant tax reduction opportunity you upsell to a Tax Strategy Plan which includes a more comprehensive analysis of their tax situation and an optional recurring monthly fee for implementation of the plan.

The one-time upsell would be a percentage of their estimated tax savings (i.e. a $10,000 fee if you find $80K in savings).

Not all prospects will purchase your Tax Plan but that’s not the point.

Your goal is to at a minimum monetize your list of your qualified leads (opportunities if you will).

If you spend $200/day and sell at least one Tax Report Card it pays for itself.

Let’s be conservative and say that 1 in 5 Report Cards can be upsold to a Tax Strategy Plan, you have effectively created a revenue generating machine.

Product #2: The Business Health Check ($250-2,000)

A Business Health Check provides a snap-shot analysis of a company's financial health and operations.

It is ideally suited for small businesses under $1M in revenue who use QuickBooks Online and have clean books. In this example we’ll compare a “Basic” versus a “Comprehensive” business health check.

Option 1: Basic Health Check

• 1 page report: This will include KPIs in a visual form superior to the often hard to read format of the default QBO reporting.

• 3 action items to improve financial health: Your value-add will include 3 action items that help steer the client to taking action on your analysis versus just filing it away. This action leads to a service engagement (i.e. monthly bookkeeping package).

Option 2: Comprehensive Health Check

• 2 page report: This is a bit more detailed than the Basic and includes other metrics such as Debt-to-Equity Ratio, etc.

• 5 action items to improve financial health

• 2 operational efficiency recommendations

The requirements for this productized service would typically be:

• Read-only access to QuickBooks Online

• Last 2 years of tax returns

For each option your team will review the QBO and tax data to identify opportunities to improve profitability, cash flow, and compliance. Then distill these down into simple, high-impact recommendations delivered in a 1-2 page report.

Some firms spend days on this but here we are leveraging the 80/20 principle to uncover the low-hanging fruit in their data. Anything more comprehensive needs to be a regular service engagement.

Product #3: QuickBooks Setup Service ($500-800)

This is a productized service best suited for new businesses. Remember, this is best suited for a service that is performed frequently and require little sophistication which makes it an excellent candidate for a product.

This includes setting up their Chart of Accounts, Items List, Customers, Vendors, Employees, and basic Preferences in QuickBooks Online. Estimate 2-3 hours to complete based on company size and complexity.

Final Thoughts:

Some will charge more, some less—these are just example ranges. You can only determine the fee if you have previously completed these as services and understand your cost structure and margins.

Remember one of the main advantages to evolve a former service into a product is to serve those prospects or clients who are not yet ready for a full blown engagement or to hire you as their accountant or bookkeeper.

When they are, and have had a favorable result with your entry-level product, they will likely be better clients anyway since you know more about their business and have already established trust and set expectations on a fundamental level.