Aug 12, 2021
Hi, Profit Designers! As we at
Tap the Potential gear up for a number of special, upcoming
projects, we’re taking this time to bring you some of our most
popular episodes from the vault! We hope you enjoy it, and we’ll be
back with new episodes for you very soon!
In this episode, Stephen King,
president and CEO of GrowthForce, joins Dr. Sabrina and her
co-host, Mike Bruno, for an illuminating conversation around
Should you discount during an
economic downturn? Listen in to this discussion to hear compelling
reasons why you should NOT discount, and what you should be doing,
Top executive at a Fortune 500
company. Bootstrapped CEO. Venture-backed tech startup founder.
Non-profit fundraiser. It’s safe to say Stephen King is not your
Stephen is president and CEO of
GrowthForce, one of the nation’s largest providers of outsourced
bookkeeping and controller services. Regarded as an industry
thought leader by AICPA and CPA.com, his ability to visualize the
future of accounting has lead GrowthForce to become one of the
fastest-growing companies in America.
His experience at the forefront
of technology development and accounting system design spans nearly
three decades. In 1995 he founded Virtual Growth, the nation’s
first cloud-based accounting service, and quickly grew it into a
market leader. After being acquired by Insperity, Stephen was
brought on as president of Insperity’s Financial Management
Services division, serving two years before leaving to build
He also spent seven years
working at Amnesty International USA—first overseeing 300 percent
growth as CFO, then raising over $20M a year as Director of
Development. Stephen’s time at Amnesty reinforced his life-long
commitment to giving back to the community. As a result,
non-profits represent 35 percent of GrowthForce clients.
Profit by Design is a Tap
the Potential Production in collaboration with Small Business
- Business owners are feeling a
lot of pressure in this new normal.
- Pricing is harder if you’re not
confident of the value that you’re bringing.
- Stephen addresses the issues
around discounting, then provides the math:
- If you have a 40 percent gross
profit and you give a 10 percent discount, you need 33 percent more
sales to generate the same bottom line.
- If you have a 30 percent
margin, you need 50% more sales to generate the same bottom
- If you have a 40 percent gross
profit and you ADD 10% to your pricing, you can sell 20 percent
less and make the same money.
- When Stephen let an objective
person price his jobs, his fees started going up.
- Stephen shares some case
studies and classic mistakes from clients that allow him to share
- The accounting industry was
designed for compliance.
- Financial accounting is
designed for external users. For example, it is your CPA’s job to
help you pay as little in taxes as you’re legally allowed to, to
get you through an audit, and to keep the banks happy.
- Management accounting is about
internal users and about understanding your unit economics, the
profitability on each job.
- Stephen explains the benefits
of automated activity-based costing and cautions against
- Things to consider to gain
confidence in pricing appropriately:
- Stephen offers accounting
system suggestions to set up reports to show you your “income minus
your cost of goods sold equals your gross profit”. Your gross
profit percentage is the most important number of every financial
statement. This will tell you if you’re pricing right.
- Which clients should you fire?
Which clients should you re-price?
- How do you spend money to make
money in sales and marketing?
- Dr. Sabrina explains the 80/20
principle: 20 percent of your clients and customers are responsible
for 80 percent of your revenue. If you focus on increasing revenue
from the top 20 percent by 25 percent, you’re at choice and you can
get rid of 80 percent of your clients and customers.
- One mistake is to think that
your biggest account is your best client.
- When you have the appropriate
margin in your pricing you are able to run a much more simplified,
- Whatever you do, don’t discount
your services during an economic downturn. Don’t make decisions
based on fear. You need to have an attitude of
- Surround yourself with people
who have a positive mindset and who are looking for
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