Thorsten Jekel
Yes, on that note, welcome again to another episode of Digital4Productivity. And as you know, I always deal with the topic of technology, but always with the focus: “Switch on the brain first, then the technology”. And that means, above all, that technology makes sense when it helps to optimize business models or make them possible. And as you know, I’m someone who earns most of my money by trading time for money. And I learned from my interview guest, among others, that this might not be such a good idea and that there are much better ways to sell your expertise. The basic idea that I would like to talk about in this episode is a brilliant one for me. Coming from a knowledge worker who said, okay, for a daily rate you get a consulting service or a training service, I have already developed a bit further into the topic of saying, okay, you want a result, in return you get a package and in return you get a package price. That goes in the direction of value-based pricing. But it goes a bit further, namely the idea of saying, I’m building a product out of a product. A product is called a service, so to speak. And that brings us to a topic where it’s about saying that I’m building a product called services from my offering. And that sounds very theoretical at first, but you’ll see in this episode, I’ve invited an absolute expert on this topic and this absolute expert is, I’ll give his name away now, many of you will already know him, Maik Pfingsten. Welcome, dear Maik Pfingsten.
Maik Pfingsten
Thank you Thorsten. Nice to be there.
Thorsten Jekel
Yes, it’s great that you’re here. And for those who don’t know Maik yet. He’s someone who, for me, belongs in the category that I always really, really like to follow, namely the swimmer indicator here. What does that mean? I’m always reluctant to let a non-swimmer explain to me how to swim faster. I somehow have such a limiting belief system. And dear Maik Pfingsten, who comes from a consulting corner, has managed to build a standardized, very valuable product in such a way that it has generated extreme utility value for the customer and also for him at the same time. And that leads me, before we talk about you, to the question: what is this basic idea that I’ve been talking about for so long in the introduction? What is the problem with the issue of time versus money? And what is the basic idea that you hold against it with your topic Product means Service?
Maik Pfingsten
You know Thorsten, I was still very young when I started thinking about self-employment. I came from the Ruhr area, grew up between coal and steel, then studied engineering, and during my studies I naturally started thinking about self-employment and entrepreneurship, because I realized at the time that Maik and the time clock weren’t going to be friends in life. I didn’t think I was an artist, so come on, you know what, I’m an entrepreneur. And so I sat at all the start-up seminars and all the places where you hop around at the university and everyone told me, yes, start-up, start-up, start-up, you have to found a tech start-up here somehow. Of course, that’s three times as hard when you’re studying engineering than when you’re studying any other subject in context, because they always thought that we’d leave the university as engineers and tomorrow the next Silicon Valley would somehow fall in Bochum. And I used to sit in all these start-up seminars and business games, and of course I also devoured books and everything, and I always said: No, I’ll get myself some VC money, I’ll put 15 employees in there, I’ll burn the money, clear the market, sell the stuff. That’s not my thing. Somehow I didn’t feel at all entrepreneurial. And then I always went to the lecturers or to all these start-up consultants or VC people and business angels. And I always said, so is there anything else? Then they said, if you’re an engineer, you just open an engineering office and then you just have to trade time for money. That’s what the others do, too. Have fun. And that’s how I left university. Then I worked for five years in industry in automotive development, as a development engineer, systems engineer and then I realized that none of that would work. In 2005, I went into business for myself and started an engineering office. What did I do? Implemented the plot exactly. Hired 15 employees, yes, set up a “time for money” business model, sailed through the automotive and economic crisis in 2008, came out of it with a black eye and realized, eh, that’s not my business model here.
Thorsten Jekel
And the interesting thing is, before you go any further. We have an episode here that is certainly interesting for all entrepreneurs on the one hand, but today in particular it is intended with a target group in mind. Many of my listeners are tax advisors. I’ve been a DATEV reference customer for 20 years and I’ve been giving the executive seminar on the iPad in day-to-day office life since 2012. And one of the things I always ask at the very beginning is why are you coming to this seminar? And many people always say yes, the iPad is somehow an element of a consulting experience. I hear that again and again from my participants. And I always like to build on that by saying, yes! So I also believe that the topic of booking commuting folders is something that AI can do today, an Indian tomorrow or vice versa, depending on how you look at it. I believe it can be a sustainable business model. And I believe that as a tax consultant, you can create a great benefit by helping your clients to streamline this annoying topic of bookkeeping as much as possible with smart IT tools on the one hand and providing them with business advice on the other. And that’s where I learned from you, dear Mike, there’s an idea that some tax consultants in your client base have also implemented, that I can build products that I can standardize to a very high degree, where I can create great value. So those of you who are tax advisors, stay tuned. Once we have explained what this topic of product means in terms of service, we will also provide very specific examples from tax consultancy. I just think it’s important to first understand what the basic idea behind this product-based service is. And you’ve already said that you founded an engineering firm. And I always find this example so easy to grasp, this topic of specifications in the context of project management. Would you like to use this example to explain what the old approach is and what your idea is on the subject of product? Because I think it’s always such a tangible example where you can very quickly understand the difference in thinking.
Maik Pfingsten
Exactly. Out of this frustration that I described, in 2010 there was exactly this impulse to do things differently. And then I turned everything completely inside out, started again and said, we’re going to do it differently and then, through the steps I took, I got to the point where I said, wait a minute, I have a service, this is the specification sheet for those of you who haven’t heard the specification sheet yet, imagine this is the building application that the architect makes when you want to build a house, we engineers do this for a technical development product, it’s a technical document. It’s forgotten afterwards, but it’s simply necessary in the engineering context. And we always do that individually. It’s part of my systems engineering craft, it’s just part of it. It’s not the most exciting thing, I’ll be honest. But it is an extremely important artifact, a technical document in the context of project management. But we’ve always done it individually and sometimes over months and then billed on an hourly or daily rate basis. Somehow it never worked out for everyone involved. So the result was there, but it was really to the point.
And so, in March 2015, I reached the point where I said I would sit down for a day and rethink this and thought about what customers want. They want a specification quickly. I can deliver that. That’s part of my profession. But when we do it this way, I think very carefully about how a star chef’s recipe works from my point of view. I am a master of my trade, yes, and then I think about how I can deliver exactly the same result in two weeks. Completely approved specifications in the quality and excellence that I expect and even expect in my profession. And at a fixed price, too, so that I can get out of this temporary situation. And that’s what I did that day and at the end of the day I had a specification sheet in two weeks. That was my engineering service and the price was based on the value that I deliver and the value always depends on the size of the project budget that the customer has. Most of them were in the 5 million euro range and then we have that, I have a way of calculating that down. I can go into detail, but first the abbreviation with a sub-calculator and then I always came up with somewhere between 10 and 25,000 euros per specification. And the exciting thing was that the customer suddenly didn’t care how much time I invested. And because I had this highly standardized, systematized approach, I was suddenly able to go in and keep improving this Michelin-starred recipe, and I was down to under 30 hours on my end. I don’t know, you have to imagine that in 2017 I was standing in front of my monitor staring at the send button for fifteen minutes when I wanted to send out an invoice for €25,000 because I knew I was going to send it out. The customer will pay it immediately, they know what it’s about. But on my side, it only takes 30 hours. That’s so radically different. And that’s what I mean. And project per service is much more than just a systematized, standardized service. But it is, it opens up, it’s actually the perfect business model for us freelancers.
Thorsten Jekel
I think that’s totally brilliant. To a certain extent, I already put this into practice as a speaker when I’m asked how you can get away with charging 500,000 euros plus 500 travel expenses for a 20-minute lecture. That means you get the lecture for free, it’s not an issue at all. You just don’t get 35 years of life experience and a bunch of speaker training and an executive MBA degree and a bunch of mistakes that I’ve already made. You have to pay me for them. And experience shows that they are a bit more expensive than the five and a half. So it’s a little bit where someone says that’s a perverse hourly wage, where I say, no, that’s simply the “best of” in the field that you have. But now I think you’ve implemented it even more consistently. Perhaps you would like to use this example, I found it vivid, I also read your book on the subject of product is service and in this book, which I can highly recommend, there was this example of how you calculated the price. How do you come up with €20,000 for a specification sheet, if you could perhaps outline it briefly, because I thought it was an extremely good way of thinking, that you simply derive a price from the value that you create for the customer that is so plausible that nobody would think of saying that they are stupid to take so much money from me, but rather the opposite. I think it would be exciting if you could outline that for us here.
Maik Pfingsten
With pleasure. I always had a similar problem with the specifications. What should I base this price on if I don’t want to base it on my time? The number of pages is also kind of stupid, because I’ve seen so many specifications in my life. The more pages, the more likely it was to contain total garbage. So if I generate a specification sheet in two weeks, experience shows that it’s 30-40 pages condensed down to the exact content that needs to be included. How do I get a price for it now? And then the next step for me was to say, okay, what can I use as a starting point? And with my clients, it was always the project budget. Yes, what is the budget that the customer is planning for their project? And then I had an initial discussion, yes, that’s your project budget. And since I was working in an area back then where we have to work with confidentiality agreements and so on, because specifications are usually two years before something like that even sees the light of day. Yes, I described technologies that were only just coming onto the market, they didn’t want to tell me the price. So I’ve always taken a punt and said something like €5 million and then I’ve always looked at the other person in the first meeting and thought, aaa, he’s going to get a total eye twitch, then I’m probably way over what they’re used to and just fell off my chair, then I’m way under what they’re used to. And so I was able to make the first assessment. And then I said, listen, project management also means we do risk management, very classic basic work, so we said, yes, yes, yes, I knew exactly that they don’t do that, because it’s always such a beloved child, risk management, in project management. And then I said, yes, 30% risk contribution, i.e. 30% probability that projects will fail. There are countless studies on this in our context. 30% or, to put it simply, one third, one third of 5 million euros is 1.5 million euros. That’s the amount of risk that I theoretically put in the safe in Switzerland. And if there’s a fire in the project, I’ll get the money out again and use it to pay the project fire department. So, I solve my problem, or, and this is also part of risk management in project management, I think about measures to reduce the risk beforehand. One measure could be, for example, to put super good project managers in there who are extremely experienced. That reduces the risk. I put a project team into the project that is incredibly experienced in this topic. Reduces the risk. Or, oh wonder of wonders, we sit down at the very front and document the customer’s wishes and requirements. It’s called a specification sheet, reduces the risk. Yes. So, there are also studies on this. If I use them, they will probably fall off my chair completely, because the specifications reduce the risk very, very significantly. And so I once went into the discussions and said: You know what, we’re going to do it very simply, one third, one third, one third, so, no, one third project management, one third team, one third specifications, risk reduction. That means one third of 1.5 million euros risk is 500,000 euros. In other words, the value of your specifications is €500,000. They’ve looked at me with sunshine eyes because no one has ever calculated what a piece of paper is worth? Yes. So, and then I went there, okay, when we see this specification, how much value contribution is coming from you, how much is coming from me? And then I went with an 80/20 approach, that’s one possibility, you can also take 50/50 or others. But I went with 80/20 because I said that the content of the specifications comes from you, it’s highly individual, it’s your stuff. I am the professional. As the methodologist, I’m the one who turns it into a professional document. And so I have said that 80% of your value contribution is the content, 20% of mine is the craft. 20% of 500,000 euros is 100,000 euros, that’s my value contribution. So, and now it’s like this with specifications in a project, they have three, four, five iterations over time, they are constantly updated, there are new wishes, new requirements and I was on the initial specification or wrote on the initial one. And I said, let’s divide the whole thing by five. Yes, 100,000 divided by five is 20,000 and that was the price. And that’s how I proceeded.
Thorsten Jekel
In other words, I’ve already taken half a step in the direction of saying, okay, you’re paying me for my experience. But that’s not the value, but to say that you’ve consistently gone from your shoes into the customer’s shoes and said, what value do you generate and what is the value contribution that you deliver and for which you are fairly remunerated? And your success proves you right. So against this background, for me it was a completely new way of thinking and also a further development, the topic of value-based pricing and the topic of package prices has been taken a step further, I think. I have now announced that we will make the whole thing very tangible for tax advisors who are listening here. So, what are you drooling over for so long? This has nothing to do with us as tax consultants. I think it has a lot to do with tax advice, because what I perceive, I’m also working for a tax consultancy, what I perceive are several points. Firstly, I notice that this battle for €9 for a payroll is getting tougher and tougher, where there are simply competitors who, whether from low-wage countries or supported by AI, can automatically map such solutions. So I don’t think we’re on the right track in the long term. The next thing I notice is that employees don’t necessarily enjoy doing these kinds of lolo jobs in this area. And what I also notice is that it is therefore difficult to get employees. And ideally, you have to do jobs that are well paid with fewer and fewer staff. And what is the tax consultant’s starting point here? I think we can start with her. I thought that was a nice, tangible example, and I think she has given some thought to the topic of net wage optimization. What is the approach that this colleague has very successfully implemented there?
Maik Pfingsten
Exactly. Just to jump the bridge for a moment. How does he get from a specification sheet to a tax consultant? The background is that I started a second podcast in 2014, where I poured a bit of my freelance entrepreneurial knowledge into it. That led to other freelancers coming up to me and saying, I want to do that too. That then led to a second business, which is exactly what I do today. I do what I actually wanted to do ten years ago. I help other freelancers to take this path, to take this step. And Jaqueline approached me. That was in May 2023 and said Listen, we need to talk. She is a tax consultant, a traditional law firm with 12 employees. Traditional business for 30 years. The usual content. But also exactly the topics you mentioned. AI is changing business models, especially in this context. The shortage of skilled workers is a huge issue. Yes, I can understand that. These are highly qualified employees. Especially when you’re in a more complex context, it’s often people with a commercial business background who, like you, have also studied for an MBA in some form or another. And then you don’t want to post a salary or complete a sales tax return in a tenth of a percent. You didn’t study for that. In other words, she came up to me and said, I want to do this differently, I have an idea. I have an area in my law firm where I can offer a service that is outside of traditional tax advice, payroll accounting, sales accounting, year-end tax returns and so on, the usual things where she can also take herself out of the old business models, which are often calculated in terms of time versus money or are always agreed with clients. And that was precisely the point where she said that I can use my expertise and competence to help a very defined target group to reduce personnel costs on the one hand, but also to become highly attractive as an employer and at the same time protect myself from having to worry about others poaching my employees. And the target group she chose were master craftsmen. Small businesses, ten people. The problem is, how do you now make this service a standardized, systematized product called a service, i.e. a service that works like a product, where she can promise a clear result, like I can with the specifications, because she can put a clear price on it without the customer having the feeling that, yes, here comes another three times the corner and wants to have additional demands or something, but really quite clearly this is the value, this is the result, this is the price. And so she came to me for the workshop. It’s a two-day workshop. After the two days, they all walk through my door with the finished project per service, the whole service is systematized. Value-based pricing, pricing structure, documentation and everything that I did with my star chef recipe back then. I subsequently trained my star chefs on it, i.e. other freelance system engineers who were already masters in their field. And that’s exactly where she got involved, where she said, you know what, let’s do this now, I want to have this, I want to have this as a very clear offer. That’s the personnel diamond, where she’s just going to clean up this master craftsman within four weeks for a fixed price, basically, I’ll say it now as an engineer and entrepreneur, on the subject of wages. But that’s not the real aspect. It frees up money in the company, yes, it reduces wage costs and at the same time increases employee satisfaction. And it makes it possible for those in the skilled trades sector in particular, who have a huge fear that they will be poached tomorrow. And it does this at a fixed price for a fixed period of time. And that is the personnel diamond that Jacqueline has constantly developed as a tax consultant.
Thorsten Jekel
Cool name too. So how does this benefit me as a medium-sized company?
Maik Pfingsten
All of this is implemented within four weeks and is audit-proof. Yes. In other words, you don’t run the risk – and this is often a discussion with tax consultants, which I often hear in the background – that there are certain people on the Internet who quickly and technically chase strange explainer videos around the world, even though they’re not tax consultants at all, and who pick on the tax consultant guild like crazy. That’s part of their advertising model. But whether this is legally secure and whether you as an entrepreneur can really stand up to a tax audit is another matter. But by then, this get-rich-quick-quick guru will have moved on. And that’s just what she says. Within four weeks, I’ll make the issue. You have a cost reduction. You can still pay your employees more net from gross in the end. So you can increase wages, of course, or the value, so it’s not just the wages, there are a few different things, I think she has 50 or 80 different things that you can take advantage of. It always depends on the employees, what they want and at the same time what they want as an attractive worker. And that’s after four weeks, without having to change the tax office. That’s incredibly valuable for the master craftsmen.
Thorsten Jekel
It’s also good to say, oh, I already have a tax advisor and so on, but in addition to that. And as I understand it, the employer can save on ancillary wage costs under certain circumstances and the employees also have a higher net wage, so it’s practically a net wage optimization for both sides. But I thought it was very, very smart to solve the whole thing in a legally secure and even intelligent way. I also listened to the interview you did recently in your last podcast episode, and it was very interesting to hear you say that you’ve already exhausted everything as far as this topic is concerned when you go in and see, hey, you’ve already exhausted everything. Wonderful. Not an issue at all. So to say honestly that you’re not paying any money. In other words, you don’t pay expensive money now without having a result. If it can help, then it definitely helps more than it costs. And I also learned from our mutual friend Martin Sänger that she is even working on models that she says, for example, if there is a disadvantage in the area of pension entitlements, that she even builds constructs where corresponding funds are saved, where this disadvantage is compensated for in the long term. So if I understand it correctly, it’s an overall concept that has a great benefit for the client and for the employees and thus also leads to employee loyalty among the clients in the very top target group, if I have understood it correctly, right?
Maik Pfingsten
Exactly. And the magic now is that she does it according to a very clearly defined star chef recipe, which always runs the same way, always runs the same way, which is always carried out in exactly the same way, including the documentation, right down to the fact that she can always make it more effective. The exciting thing is, and she’s having the same experience as I did back in 2017 with my star chefs, with the system engineers. Suddenly you’re actually bringing this profession into her passion for craftsmanship. You know, with me, the systems engineers like to design systems. For her, in the context of tax consultants, economists, whatever business studies, anything that deals with taxes and has an academic background. On the one hand, she loves to live her profession, yes, but on the other hand, you don’t want to be standing in the boss’s office every two minutes saying, “What should I do next? Instead, with my help, she has basically condensed this star chef recipe from her head to a point, extracted and condensed it to a point that she can then pass on to her employees, who in turn – and this is the exciting thing – can then proceed according to a very clear process, according to a very clear star chef recipe, and can always promise the same result with every artisan customer, but with individual content.
Thorsten Jekel
Totally brilliant.
Maik Pfingsten
This suddenly frees up time for creativity. You know, it was the same for me with the specifications and my system engineers. Yes, they knew exactly how it would work. And when we get into the subject matter and the topic, then maybe you can write it like this or write it like that. And that’s exactly what happens in the end. Your valuable, highly-paid, university-educated employees aren’t down in the engine room all the time wondering whether I have to turn it this way or that, but they’re upstairs and know exactly how we’re going to get from A to B. These are the waypoints we have to make. That’s how we have to do it. In terms of content, in this case with the personnel diamond, you can be totally responsive to the customer. Of these 80, you said there are 80 measures, 50 or 80, I can’t remember exactly, not all of them are applied. But there is this high level of professionalism and individuality in the content, but always with the same standardized procedure. That’s the magic behind it.
Thorsten Jekel
Totally brilliant. And if I take a look now, what is the fee structure? How do you charge your clients for this service in structural terms?
Maik Pfingsten
It calculates the value that it releases through its performance. Basically a bit like I did with the specifications. She has a different approach. Yes. Where she starts. She has a different, different, so I’ll say different parameter that she is working on. But the basic idea is exactly the same. She takes a value, or a button, a starting point from which she calculates and then tells the customer okay, with this content, with these numbers that you give me and what I see, what I can create in terms of benefits, my ratio of Hm to Hm results. Yes. It’s always a bit different for each of us. But in the end, she says: “After four weeks, you’ve tidied up the entire Personal A topic for your ten employees. I’ve handed everything over to you so that you can continue on your own. You don’t need me anymore. It’s a fixed price. You don’t need to change your tax advisor. And above all, it’s legally and audit-proof. After four weeks.
Thorsten Jekel
Totally brilliant. I think that’s great. In the first step, I always thought more about the brilliant benefit for the client. Thanks to you, the interview and your book, I also understood that it is of course also a highly attractive topic for employees in the law firm. I hadn’t even thought about it in the first step. What I also found exciting was that you used another tax consultant as an example, who I think discovered this topic of real estate for himself and the transfer of real estate as a product means service. Would you perhaps like to tell us, if you are allowed to, what this tax consultant’s approach is?
Maik Pfingsten
Yes, the last case came pretty much a year before Jacqueline approached me with the topic. And that really surprised me, because yes, over the years I’ve always been asked by all sorts of other freelancers, but in my engineering context it was often from a scientific and technical background, studies, so specialist courses. And now suddenly I’m faced with a tax consultant, in this case Lars, and I think okay, that’s crazy. Of course, as an entrepreneur I know tax consultants, I’ve been self-employed for 18 years and I’ve built up and sold a few companies. So I know what tax consultants do. But now Lars suddenly stood in my doorway and said: I want to do what you’re saying in the podcast and in the book. And he was the first in May 2022, a year ago. And in his case, it turned out that his specialty is standardized inheritance and wealth transfer. So he specializes in entrepreneurs who have real estate assets of over one million euros, where within, I’m not sure, six weeks, I think it is, he has completely settled the entire inheritance, including a current lifetime tax saving.
Yes, that means that his clients are typically entrepreneurs who have built up a business in the classic way, you know, 20-30 years, earned money, then bought a property here and bought a property there. And now you get to a point where you think, oh man, I might have to sort out my inheritance, because I might have something in my background for reasons, family always has reasons that bring something, there are always times when you want to have things sorted out beforehand. Yes, because I know that if I haven’t sorted it out, then the state will take it somewhere or I haven’t sorted it out, then someone in my order of inheritance will get it, who won’t be able to handle it and will throw it out the window or something. There are endless reasons. But the problem for these customers is that normally, if I want to go and say I’ve got three properties, a million or two or something, I don’t know where to run to first. And then I somehow run to the internet first. And then the big danger is that we quickly run after certain riches on the internet, quickly and frantically. I think we all know them.
Thorsten Jekel
The Lambo faction.
Maik Pfingsten
Yes, them too. Yes, and then, but there’s no one who says, hey, I’m a) in a position to cover all that before my profession, my qualifications and also my further training. And I promise you, it will be sorted out within six weeks, including taxes, notary, contracts, your wishes plus tax optimization. There was no such thing out there. And that’s basically what Lars did. It was precisely this step where he said, hey, listen, I’m doing this, I’m organizing it in a highly systematic way. Again, the same as with Jacqueline or the same as with me back then with the specifications. The content is individual. The procedure is always the same. The exciting thing with Lars was when we did this workshop, it’s two days, the first day is systematizing and let’s visualize this star chef recipe, this process, this approach, we stood there the evening before and Lars said to me: “Okay, amazing. This one part in my five phases, but this one part in this one phase, this is the part that only I have to do because of my profession, it was right there.
Maik Pfingsten
My employee can do everything else. And I can do it all remotely, and that was the big aha for him. He no longer has to travel to the business, he can do the whole kick-off data recording remotely or his employee can often do it remotely, do the whole preparation remotely, the whole calculation, his star chefs can do it all remotely. Then, of course, he has to use his profession. He has some additional training on the subject, which I’m not that familiar with, inheritance and assets, the opening of all these, in any case he has this additional qualification that you all have as tax consultants. And then he does that part and then it’s basically just a matter of handing it over to the client, the instantiation, maybe the lawyer, the notary, who then has to follow. And after six weeks, the client has everything settled at a fixed price and has saved on taxes.
Thorsten Jekel
I think that’s totally brilliant and I can already think of two or three other things in the first step in the context of tax advice, for example, such a topic as handing over a company to the next generation, which I can now think of spontaneously, for example, is perhaps an issue for one or the other entrepreneur. Or to find successors outside the family, to say I am selling my company. Of course, the content is individual, but at the end of the day, I’ve been there. I used to work for an American company as an employee and managing director. We regularly bought and sold companies. I accompanied some of them through the due diligence process. It was always the same process in the end. So I’d say they structured it very well and in the end, I’d say it was a recipe. Yes.
Maik Pfingsten
And the real trick and magic lies in getting it out of the heads of us freelancers. Of course, I also wrote specifications beforehand. That’s what we do on the first day, the systematization, the visualization, to say okay, what is master craftsmanship from your point of view, from our point of view? How should it work? What is the star chef’s recipe? And once I have done this visualization, once I have taken this step, then I can go to the next step and teach my star chefs how to do it. That’s exactly what I did back then. Lars can do the same. That’s exactly what Jacqueline does. That’s exactly how the others who have gone in the direction of product per service as a business model, like a fund, are proceeding, right up to and now comes my big learning from the summer of 2021. The step in this direction, which I just told you about at the beginning of the podcast, was in March 2015. That’s when I made this so-called product per service from the specifications, without knowing what kind of racehorse I was putting in the stable. I was asked for the first time in 2019 whether I would like to sell it all. That didn’t work out in the end. There were various reasons for that. In the end, they didn’t have the budget to cover the purchase price. They approached me. I didn’t care in the end. And then two years later, someone else came along and asked, can I do the same thing again? Can I buy that? And we came to an agreement. And then we signed a contract in July 2021 and had set ourselves a handover period of three months. And then I handed everything over to him. I had two product-based services in my engineering office. The last one is two weeks, the other is virtual mentoring in systems engineering. It’s a year-long mentoring for mechanical engineering SMEs, but it’s also highly systematized. I handed it all over to him with documentation, everything, the website, everything in a podcast that the other… The engineering podcast, the engineering podcast that I had, everything is in this whole sale, I handed everything over and thought okay, now we’ll do the classic three months when you hand over companies. You accompany the person who bought it over time, explain things again and so on. After two weeks, but after two or three weeks, I don’t know, after three weeks he came to me again, he came to me and said, you know what, I can run on my own. Try doing that with a freelance mind business, which we all are. And it doesn’t matter whether you come from a scientific or technical background, as a freelance entrepreneur or from a commercial or business background. We have this knowledge in our heads. And if we want to take this step, we have to get the knowledge out. We need to develop this star chef recipe from it. Then we can put the value-based price on it. And suddenly, and that was my big learning, you have a saleable business as a freelancer.
Thorsten Jekel
That’s still interesting, even though I’m thinking about it. I often have discussions with tax advisors who have perhaps been young for a bit longer, like the two of us. And then they say: Yes, I’ll do a few more years and then I’ll retire. So, when in doubt, I ask, if you want to retire now, what are your thoughts? Do you want to pass it on to the next generation? Do you have family you want to pass it on to? And then sometimes they say, yes, maybe they won’t be so enthusiastic about rocking the boat before they take it over. And even more extreme is to say, yes, if you want to sell it to someone else, how valuable is the brewery you’re selling there? And if you then have a product called a service, for example, that can be taken over on a one-to-one basis, the resale value of the law firm naturally increases dramatically. And that is of course another topic that I find so exciting. That’s why I said to myself, why don’t we do an interview together and let’s get this into the DATEV community. So I’d like to take this opportunity to say a big hello to Katja Knödel, who is always happy to take the whole thing further in her community. So I think, dear Katja, you will agree with me that this is a very exciting topic for tax advisors, because I always like to pass on useful information and tips in my newsletter and in my podcast. And if I recommend someone, like I’m recommending Maik now, then it’s someone who I say is such a useful offer, a valuable offer, that I say even if they don’t implement it with Maik, it’s hopefully already an incredibly great impulse that others have implemented. And if necessary, Maik can of course also be brought in to provide support. So I think that I have to, if I look down my own nose, I’ve already gone down this path to some extent, but I’m not yet consistent enough to do it together. So from that point of view, I’ll also take a look at my own nose on this subject. What if I’m a tax consultant now and I say, I find this somehow interesting, what would be the next sensible step, Mike?
Maik Pfingsten
So MaikPfingsten.de, the internet knows me, just type in Maik Pfingsten and then we find Maik with AI and Pfingsten like Christmas relatively easy to remember. The internet knows me, you can find me on the website, there is a separate section for the two-day workshop. If you’re interested, you can make an inquiry there. If you say: “I don’t really know yet, I’d like to hear more. I’ve been broadcasting a podcast for us freelance entrepreneurs for ten years with “Freiberuflich selbstständig”. You should listen to it. It contains case studies. But I’ve also documented all my experience there. So feel free to go back to the very old episodes. There’s a lot there too. Lars, for example, said that he stumbled across an episode where I talked about Kanban. That was an episode six or seven years ago. Feel free to use that. Do you have any more of a feeling for what we’re talking about here? The book is also a possibility, of course. Or just talk to me. Like Jacqueline did at the end and said, listen, we need to talk.
Thorsten Jekel
Wonderful. And I see that I would like to come full circle to the topic. What does it have to do with the topic of digital for productivity, with the topic of technology and digitalization? You said so well earlier that it has also enabled tax advisors to say that perhaps they don’t always have to be on site somewhere, but can also work remotely, work distributed. And I think it’s really important to think about how to use which technology. But I often find that the first thing people ask is: Yes, what microphone do you have that sounds so good? What kind of camera do you have that makes it look so good? And I say that’s always the second question you should ask. The first question is always, what business models are possible through distributed working? What business models are possible because I can really take things apart and structure them using Kanban tools, for example? I’m also a huge fan of Kanban, but it’s precisely this issue of “first switch on the brain, then the technology” and then, of course, technology can help. And then it’s an essential element. And it doesn’t always have to be high-tech. I know, this topic of Personal Diamond, there are also a lot of phone calls involved at first, so that you say okay, that can also be good for all phones. So ultimately there are different ways and I just thought it was important because it really jumped out at me. I can also highly recommend the book. I read it in one go on a Saturday, because I said it was really extremely useful and good to read to really get to grips with the subject. I’ve also included all the links to this episode. You can also find them in the show notes. For those of you who might hear me on the Maik Pfingsten podcast and say “What kind of guy is he? Well, we simply got to know each other through Martin Sänger and said, man, we find this so exciting, let’s just have a chat about it. That’s why you can either listen to us on Maik Pfingsten’s podcast and I’m happy to add this topic of “simply using technology”. And Maik Pfingsten is the one who adds the brains in terms of how do I build business models? And that’s something that I always deal with very intensively. And that’s why I’d like to take this opportunity to thank you once again, Mike, for the exciting exchange. I’ll also include the link to your podcast. It’s one of the few that I really listen to regularly. So on that note, thank you once again and good luck to you and of course to all the listeners of the podcast, especially the DATEV tax consultants. And best wishes once again to Katja Knödel. Until next time for now. Bye to you all.
Maik Pfingsten
Thank you Thorsten. A pleasure, an honor. Bye.
Thorsten Jekel
Thank you. Bye.
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