We got into audits through HUD audits for mortgagees. We found it to be a scalable business, because we didn’t have to be on-site; we could do it all throughout the United States. We started putting a lot of effort and marketing dollars, growing to 40 or 50 audits, and then the federal government decided to let the big banks swallow up the little mortgage companies and oversee them. The revenue center we were building vanished—literally—overnight. BUT THEN WE GOT A PHONE CALL.
Virtual 401(k) Audits When we started to gain traction in the Virtual CFO space, there were people who said we got lucky, that we were able to go against the grain and work remotely in that one specific niche because of the nature of the VCFO service. They said, “you can’t do 401(k) audits remotely. No one’s going to hire you to do that.” But we decided to find out whether we could get the VCFO model to work in other areas of accounting, and we bucked the system again.
One of our earliest clients called us up and said, “Hey, I know you don’t need to do my HUD audit, but I really enjoyed working with you. I like your style. I like the fact that you don’t have to be in my backyard. Can you do our 401k audits?” So we dug in, spent three times the amount of time we should have, and started to figure it out, with the help of consultants who reviewed our process. As we learned, we started putting out information, writing articles, and sharing what we were learning. It turned out to be the perfect niche. Unlike HUD audits, 401(k) audit season doesn’t overlap with tax season, so we were able to distribute the workload more evenly throughout the year. Companies are required to do 401(k) audits when they have 100-plus employees, so they’re established companies with systems, a payroll
company, and high quality data—which makes them straightforward to conduct. It’s also a great market because when a company crosses that 100-employee threshold, they’re having to educate themselves about the 401(k) process for the first time. That means that when those clients would search, “Why do I need a 401(k) audit?” online, they’d find our articles and, even though we might have been halfway across the country, we could end up working together. In our early stages, nobody did 401(k) audits virtually, so we had a big competitive advantage. Not only were we doing something unique, we were putting out a lot of content to educate clients, and we had a transparent billing model. People could go on our website, click a button, answer a few screening questions, and get a quote. They didn’t have to wait two to four weeks to hear what the quote might be. -ADAM HALE
It started with one audit, and it blew up into just under 200. Everyone in the industry said, “You can’t get 401(k) audits by doing them virtually, by having a national presence, or by doing podcasts and blogs. You get them with an outbound sales approach, traditionally through the Request For Proposal (RFP) process.” And that’s not how we did it, and we were very successful: 401(k) audits were a million dollar stream of income when we were a $10 million company.
Our thought-leadership approach creates demand for this service, so we have clients who follow our podcasts and blogs—maybe for months—that call us up and initiate the sales process. With this kind of inbound marketing approach, our accountants don’t need to go out and make sales pitches. When we hire someone, they get handed a book of clients; they aren’t expected to land them, which is the industry standard. That means they have more time to spend on delivering expert service and not honing their sales skills. And, starting from their first meeting, they can approach their client as partners, not as salespeople.
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