Tax Business Tips

It takes more than a thorough knowledge of tax law to build a successful tax business. In fact, some of the markers of success for your business will have little – if anything – to do with your knowledge of taxes. And, while every tax business is different, there are certain common threads that seem to run through those businesses which have been able to stick around.

Here are some of the common characteristics of a successful tax business:

1. The owner of a successful tax business is self-fulfilled. Successful small businesses of any sort are typically run by someone who enjoys running the business. If you’re not loving what you do, you should think long and hard about whether or not you want to do it. This is especially true in the tax business, where the grueling day-to-day can be frustrating for someone who doesn’t love the work.
2. Successful tax businesses keep current. Tax laws change every year. If your business is going to be successful, you have to know what those changes are and what kinds of implications they are going to have on your clients. Keeping current in your field is key if you want your business to succeed. That means reading industry periodicals, attending conferences or training opportunities, and doing everything you can to stay abreast of important changes.
3. 3. Successful tax businesses make their customers happy. Tax businesses are no different from other businesses in this regard. Customer service is one of the major benefits of working with a small business. You’ve got to provide stellar customer service if you want your clients to recommend you to their friends and family. This is still the most powerful form of marketing.
4. 4. Successful tax businesses have a long-term plan. You need to have some idea about where your business is headed. That means a couple of different things. First of all, it means having a business plan that will carry you through the next year. You need to know how you’re going to generate revenue when it’s not tax season, for example. You need to know how many clients you can take on at a time, and when you’re going to need additional help.
5. 5. Successful tax businesses utilize modern marketing methods. The days of depending on the Yellow Pages to funnel you a steady stream of business are long gone. Today’s tax businesses use modern marketing methods, including Internet marketing, social media, blogs, and more to get their business out there in front of potential clients. That doesn’t mean you can ignore traditional marketing methods, but it does mean you need to find new ways to reach your target audience.
6. 6. Successful tax businesses use all available tools. There is plenty of technology available to tax professionals today. These computer applications will give you ready access to customer data through their own accounting programs, which will make the tax process much easier and faster. Technology makes your tax business more efficient, allowing you to have a larger client base and be more profitable. That doesn’t mean investing in technology for technology’s sake, but it does mean using what’s available to you.
7. 7. Successful tax businesses manage their own cash flow. We hinted earlier at the problem of tax season, and how some tax businesses generate the bulk of their revenue for the year in a relatively short amount of time. That means you need to either find value-added services that you can provide to clients during the off season, or you need to find ways to spread the work out for your clients throughout the year. However you do it, you need to make sure you’re not going to have to shut your doors in August because it’s four more months until tax season.

If your tax business is going to be successful over the long haul, you’re going to need to cultivate these characteristics. In some cases, it’s a matter of developing the right business philosophy; for many of them, it means an ongoing commitment to your profession, to your clients, and to finding new and exciting ways to reach new clients.

Let Certified Tax Coach help you build a successful tax business. Become a Certified Tax coach.

[IMAGE LICENSE:

The Business of Small Business Owner Taxes

As a tax professional, you’re in business to help your clients. You want to see them in the best possible tax situation they can be in. When your clients are small businesses, you know that you’re working hard to protect someone’s livelihood, and that you’re helping to fuel the great engine that is the backbone of the country’s economy.

Working with small businesses can be challenging, at times. Small business owner tax records can be disorganized. They can be very busy, and reluctant to take the time necessary to spend on their taxes, leaving the burden to you.

However, working with small business owner taxes can also be very rewarding. In fact, for many tax professionals, small businesses are ideal clients.

Here are some of the reasons you should consider expanding your services to include small business owner taxes if you’re not already doing so:

• Small businesses have a genuine need for tax help. Small business owners wear many hats. They’re salespeople, assembly line workers, managers, and even accountants. It’s hard for a small business owner to be good at all of those things. One area where it just makes sense for the small business owner to look elsewhere for help is taxes. When you work for small business clients, you know that you’re helping someone with a genuine need.
• Small businesses have plenty of opportunities for tax advantages. There are plenty of deductions and credits available to small business owners. Finding those can be part of the enjoyment of working with small businesses, especially when you succeed in helping them reduce their tax burden.
• Small businesses know the power of recommendations. Chances are pretty good that your small business clients get a good bit of business via word of mouth. They know just how powerful a good recommendation can be. If they’re satisfied with your work helping them with their small business owner taxes, they’re more likely that some other types of clients to recommend you to their peers.
• Small businesses understand the way you work, too. There’s something of a camaraderie that can exist between small business owners. They know how much work they put into their business, and they also understand how much work you put into yours. Working with small businesses can, in many cases, be like working with a peer for that reason.
• Small business tax problems are rarely complex. Some small businesses face complex enough tax problems that they don’t want to (and shouldn’t try to) handle them on their own, of course. However, small business tax issues are usually fairly straightforward for the tax professional. If you’re a tax professional who works primarily with or even exclusively with small businesses, time and experience will give you insight that’s truly valuable to the client, too.
• Small businesses are more profitable than individual tax clients. There’s more work to do with a small business, so you’re going to make more money. That means fewer clients and more revenue for your business. While you could probably make more money doing taxes for larger businesses, you’ll also face a significantly higher investment of time and the need for much deeper knowledge, as well.
• There are many tools available to help you handle small business owner taxes. There is all sorts of software that you can use to assist you in preparing small business taxes. Most of that software will connect with the major accounting packages, so you should have very little difficulty getting the data that you need from the client.
• Small businesses are good candidates for additional services. There are a number of value-added services that tax professionals may offer that are especially suited to small businesses. From retirement account services to standard accounting, small businesses can form multiple streams of revenue for the tax business.
• Working with small businesses can be highly rewarding. When you work for a small business, you develop relationships. It’s not like individual taxes where you see the person once a year, or corporate taxes where you might deal with a dozen different accountants. Small businesses let you get to know your clients, and establish real rapport and relationship.

Small business clients can be wonderful for your tax business. Spend some effort to gain some small business clients, and you’ll see exactly what we’re talking about.

Take your business to the next level. Become a Certified Tax Coach.

[IMAGE LICENSE: Some rights reserved by Philip Taylor PT]

Tax Blogs

 

The world has changed. There was a time when all a tax business really needed to do was place an ad in the Yellow Pages, get those first few clients, and just sit back and watch the business roll in. Today, consumers are much less likely to open the yellow pages than they are to turn to the Internet when they’re looking for a service like tax preparation.

 

That means your tax business needs to have a strong Internet presence. One of the best ways to boost that Internet presence, establish credibility, and reach out to new clients is with a blog. While tax blogs may not be the focal point of your Internet presence, it can be a tremendous boon.

Here are some ways that tax blogs can help your tax business:

1. A tax related blog helps you relate directly to clients and potential clients. One of the benefits that a blog gives you is the opportunity to interact with clients and potential clients. Your business, to a large degree, depends on your personality. Being able to reach out to those people through a blog and let them see your personality will help to grow your business. Clients can also then share your blog with others, extending your circle of influence and growing your client base.
2. A blog gives you opportunities for customer service. In some cases, a client might not be entirely happy with your services, but they might never say anything to you. However, they might decide to comment on a blog. If that happens, you have a wonderful opportunity to provide customer service. Not only will you hopefully save a client, you’ll also demonstrate your commitment to customer service to onlookers. A blog lets you have a conversation in public that shows how much you truly care about your customers.
3. A blog will help to generate additional traffic to your main website. A blog can be a great way to drive traffic to your website. Google highly favors blogs today, especially those that provide useful information. When your blog links back to your website, it helps drive traffic organically to that website. Blogs and other social media are an integral part of any good Search Engine Optimization (SEO) strategy today.
4. A blog can help you communicate with clients. For clients who follow your blog, you can offer regular tips and advice. Not only will this help your clients to save money at tax time, it can help save you some time and headache by encouraging them to document their expenses properly. You can also use your blog to communicate various promotions, specials, or other information you need to get out that may help to grow your tax business.
5. A blog helps establish your expertise. When you post a weekly or daily blog on some tax topic or another, the readers begin to see you as a trusted source of information about taxes. A blog demonstrates your depth of knowledge and experience to the reader. This, in turn, increases their confidence in your abilities. When someone reads your blog on a regular basis and they come across a tax situation they don’t know how to handle, they’ll automatically think of you.
6. A blog lets you connect with other tax professionals. An important part of being a tax professional is continued education and development. Blogs let tax professionals connect with one another, exchange experiences, and share information. This kind of networking can also lead to partnership opportunities, as well as professional development.
7. A blog is a platform where you can help others. People like to do business with companies that they believe are looking out for their best interests. By adding to the conversation via a blog, you’re providing value to their lives. Clients see this value, and it helps them to trust that working with you would be a mutually beneficial proposition.

Tax blogs can offer all of these benefits to your tax business, and more.

Getting a tax blog started is simple. You can be up and running in a matter of minutes. Whether you create regular updates or hire a professional copywriter to provide content for your blog, you’ll be amazed to see just how much that blog helps your business grow.

[IMAGE LICENSE: Some rights reserved by Search Engine People Blog]

Tax Business Tips

Running a tax business is like running any other business: one misstep and you can find yourself closing your doors for good. It’s not enough to be smart, to understand your trade, and to work hard; you’ve also got to make good business decisions, as well.

One of the best ways to stay in business is to understand what pitfalls you might face and prepare for them. Here are some of the most common mistakes tax professionals make in business, and a little bit about what you can do to avoid them:

Top Tax Business Mistakes

1. Not understanding the local market. Just because you’re great at what you do doesn’t mean there are people out there willing to pay you to do it. The fact of the matter is that running a tax business can be a bit tricky in some markets. If, for example, you’re a tax professional who specializes in large businesses but you’re in a small town with only one or two large businesses, you’re going to have to rethink your overall business strategy. Likewise, if you’re in a larger city and want to market to individuals, realize that you’re going to be only one of many fish in the sea. You need to have a good sense of the real demand for tax help in your area, as well as how it’s being met by your competition.
2. Poor record keeping. This isn’t just a problem that plagues clients. Tax professionals can also fall into this trap. The same lessons that you preach over and over again to your clients about keeping receipts and tracking mileage apply to you, as well.
3. Poor customer service. Some tax professionals believe that their job is all about computing taxes. The fact is, it’s more about providing good service to your clients. If your clients believe that you’re working hard for them and if you’re able to help them do things they couldn’t otherwise do on their own, then you’ve probably got a client for life.
4. Reliance on a relatively small number of clients. Many tax professionals struggle along doing individual tax returns and occasional consulting right up until the time when a larger or more successful business hires them to do regular work. There’s always a sigh of relief; the struggle to make ends meet starts to disappear. However, this is all an illusion. If your business depends on two or three main clients, you’re at risk. If two of those three clients fail, your business will most likely fail as well. Make sure you have a diverse client base. In an ideal world, no one client should account for more than about 25% of your revenue; if they do, you’re almost better off getting a job instead of running a business.
5. Growing too fast. This is an easy mistake in the tax business. As you’re certainly well aware, most of your work will be done during tax season. It’s always a bit of a guessing game at the beginning of the year knowing how many clients you should take on. If you take on too many clients, you’ll find that you can’t really devote the necessary time to any of them. You’ll wind up with a lot of unhappy clients, and growth won’t be your next problem – closing will be.
6. Doing it all on your own. There is always the temptation to do everything on your own when you run a tax business. The fact is, however, that the best tax businesses will often turn to others for help. Whether you have an office assistant, a junior partner who’s learning the tax trade, or even if you have someone handling your sales and marketing, the fact is that you need to offload certain portions of your job. At a minimum, you might consider seasonal help that will let you devote more time to your clients during tax time.

Over 30% of businesses close their doors within one year of opening. Extend that out to three years, and the number rises to 50%. At the 10-year mark, only 15% of businesses are still operating. If you want to be one that survives, don’t make these mistakes.

[IMAGE LICENSE: Some rights reserved by child is a rebel.]

Client Relationship Management

Tax professionals know that the most important part of the year is between December and April. That’s when you’re the busiest; that’s also when you make most of your money. In fact, the business you do during tax season will, in some cases, need to carry you through the rest of the year.

This is a challenge, of course. There are only so many hours in a day, and there are only so many clients you can handle and still give each the attention they deserve.

If you’re smart about it, however, you can actually increase your client base while maintaining or reducing your tax season workload. Here are some client relationship management tactics you can use that will help you have more clients and work less at tax time:

Client Relationship Management Tips

How to Have More Clients and Work Less at Tax Time

Educate your clients. One of the best things you can do in order to reduce your stress at tax time (to say nothing of your clients’ stress) is to educate them on how to track and maintain tax-related records. Help them understand the importance of a mileage log, for example. You might even recommend a smartphone app for them that tracks mileage. Talk to them about how receipts should be organized, and how expenses should be entered into their accounting software. Just an hour of education for your client could save you many hours when it’s time to do their taxes.

Work with your clients’ accountants. If your client has an accountant, ask to meet with him or her. Discuss the specific types of things you’ll need at tax time, and what the accountant might be willing and able to do in order to make things go smoother and help your mutual client realize the best possible tax situation. Anything your client’s accountant can do to make your life easier at tax time will probably also benefit the accountant in terms of keeping things systematic and organized. Good client relationship management benefits all parties.

Consider a midyear meeting. Meeting with your client on a semi-annual or even a quarterly basis will save you significant time during tax season. By spending an hour or two each quarter helping the client get organized, you’ll reduce your workload greatly. Not only that, those midyear meetings are a great opportunity to discuss tax strategy with your client so as to help the client get the most out of their tax return. Some clients will be hesitant to pay an additional fee for a midyear meeting, so you might include this midyear meeting in your normal fees as simply a way to shift some of your work throughout the year while building a strong client relationship.

Focus your expertise. One great way to maximize the efficiency of your tax business is to focus in on one particular market segment or area of expertise. For example, if you primarily deal with small businesses, you’ll get to the point where much of what you do is routine, and you’ll find even more efficient ways to do things. You can double up on your efforts; learning new tax laws as they apply to small businesses is a lot different than learning all of the new tax laws. Find out what kind of work you most enjoy doing, make sure that there’s a viable market for that kind of work, and focus in on that target market to whatever degree is possible.

Consider bringing on seasonal help. Another way to free up some of your time during tax season is to bring on part-time help. This might be a personal assistant that you hire to handle calls and appointments for you during the busiest time of the year, for example. It could be a budding young tax professional who’s looking for some experience that can give you a hand with the actual tax consulting. Whatever it is, don’t be afraid to delegate some of your seasonal responsibilities to others. It will almost assuredly pay for itself.

Tax season is going to be busy for the tax professional; there’s no way around that. However, with some planning and thoughtful client relationship management, you’ll find that tax season doesn’t have to be constant motion, and that you can actually work less at tax time while still providing world-class service to additional clients.

Want to learn more strategies for client relationship management?Become a Certified Tax Coach

[IMAGE LICENSE: Some rights reserved by kenteegardin]

How to Target Your Market

Choosing your Target Market

 

Successful tax professionals build a business around a specific target market. While you might offer tax services to a wide variety of types of clients, the most effective tax preparers will hone in on specific types. That doesn’t mean you reject business that doesn’t fit your target market, of course; but it does mean you should spend some time defining that market properly, and devote your marketing resources learning how to target your market.

There are several sorts of target markets you can choose from. You can define your target market based, for example, on business versus personal clients. From there, you can more narrowly define your market, too. You might focus on small businesses, or you might focus on high-end personal clients.

Here are some tips that will help you learn how to target your market for your tax business:

Choosing a target market doesn’t limit your client base. One of the fears that many tax professionals have is that, by choosing a target market, they’re limiting their potential client base. This is a mistake. Choosing a target market doesn’t prevent you from having customers that don’t fit the normal profile, it just means you’re trying to focus in on your area of expertise.

Having a target market makes your tax business more efficient. Chances are pretty good you don’t have an unlimited marketing budget. By focusing your marketing efforts reaching out to the clients that you most want to work with, you’re making more efficient use of your resources. Learning how to target your market can help you save resources.

Your target market will normally be defined along a couple of lines. First of all, you’ll need to figure out whether you want to work with businesses or individuals. If it’s businesses, you need to decide on what kind of business structures you most want to work with, as well as business size, and other details such as whether you primarily work with service-based businesses. Further, you might decide to more narrowly define your market by working with businesses in a specific industry. This allows you to drill down on a certain type of knowledge that a general tax professional might not readily be experienced with. Learning how to target your market can help you give even better service to those clients.

Feel free to get very specific. Deciding on how narrow of a market to choose depends on a number of factors, not the least of which is the overall marketplace in your area. However, you’re better off trying to define your market in a very specific fashion at first, and then widening the burst in concentric circles to include more and more possibilities. Again, you’re not going to refuse work from those outside your target market when you need it, but you do want to hone in as directly as possible on the ideal client base.

The target market you choose will determine how your business works. Specifically, it will determine how much you work, how much revenue your business generates, how you market, and more. In fact, your target market in many ways will shape the way your business operates on a daily basis.

Choosing your target market will be an ongoing process. It takes some time to figure out exactly which market segment will work best for your business. In addition, because markets regularly change, you might need to reevaluate your target market every couple of years. The key is to remain open-minded throughout the process, and to keep your finger on the pulse of what’s happening in your business.

Different target markets require different marketing methods. If you’re trying to reach out to upper-middle class individual tax clients, you’re going to need to use a very different approach to marketing than if you’re reaching out to businesses. Reaching a target market means reaching out where they’re at, speaking their language, and using whatever medium they’re using. That can vary greatly from one market segment to the next.

Choosing your target market is an important decision. It will shape the way your business operates. It will determine what kind of work you do. It will directly impact how much money you make. Choose your target market carefully, taking these principles into account, and you’ll be able to put your tax business on the road to success

Want to learn more about how to target your market?  Become a certified tax coach.

 

[IMAGE LICENSE: Some rights reserved by Ben Sutherland]

Value Added Tax Business Services

 
One of the basic truths about running a tax business is that you’re going to be busiest during tax season. The rest of the year, things can be slow, and if you’re planning on having a steady income you need to find other ways to bring in money. While some tax professionals can live off what they make during tax season, most of us like the comfort of a regular revenue stream.

Creating that revenue stream means adding service offerings to your tax business. Here are some ideas for value-added tax business services you can offer your clients:

Top 7 Value-Added Tax Business Services

1. Accounting services. This is the most common service paired with tax services. Often, it works the other direction, however. Many accountants see their business slowly evolve into a tax business over time, rather than the other way around. That being said, many tax professionals choose to be tax professionals precisely because they wish to deal with that kind of work, and don’t want to do standard accounting. In many ways, this is a matter of personal preference. The good news is that, if you decide to add accounting to your tax business services, many of your small business clients will be more than ready to consider hiring you to work for them.

 

2. Retirement planning. It can be difficult for your clients to navigate through the often-confusing options when it comes to retirement plans. Not only that, the types of IRAs available to your clients have a direct impact on their taxes. Adding retirement planning services – whether that’s working as an actual agent selling retirement accounts or acting as a financial advisor – can be a natural outgrowth of your tax work with individuals and businesses.

 

3. Software training. Many tax professionals have skillsets that include a number of different software accounting packages. One of the frustrations you may face in working with clients is misuse of their accounting software, making it harder for you at tax time. By offering software training or consulting to your tax business services, you will not only help your clients’ business run more efficiently, you’ll also reduce some of your own stress at tax time.

 

4. Estate services. This is actually fairly common in some rural areas. Because there are so many tax issues that can occur when a loved one passes away, some tax professionals add estate sale or auction services to their portfolio. This will typically take the form either of a partner business that handles the estate services, or a staff person that will handle those details.

 

5. Property-related services. Some tax professionals branch out into real estate-related services, as well. That might include things like appraisals or it might even include actually acting as a broker. Here again, this is a good opportunity for a partnership with another business, or with an internal service provider.

 

6. Tax education for the public. Some tax businesses offer seminars to the public on tax issues. This might be as simple as a free seminar that you offer to small business owners that covers changes to tax laws this year, or it might take the form of more formalized classes where you train accountants on some of the things they need to be doing from the tax perspective.

 

7. Records retention. Because of the need to retain tax records for several years, many tax businesses have branched out into the area of records retention. You’re already potentially storing a client’s tax records as part of your existing tax business services, so why not store other documentation that they may need for regulatory, reporting, or compliance purposes?

 

As you can see, there are plenty of directions you can go when it comes to value-added services. As you go through the process of trying to determine what services to offer, however, you do need to keep a few things in mind:

• There may be state or federal laws that limit what kinds of financial services you can offer in tandem. Make sure you check into these regulations first.
• Value-added services can initially be used to simply bring in more clients, but in the long run you will want them to generate their own revenue, too.
• Don’t be afraid to ask for outside help when implementing new services in order to insure your clients get the best possible service.

Want to learn more about Tax business services you can offer to enhance revenue stream? Become a Certified Tax Coach.

[IMAGE LICENSE: Some rights reserved by Nils Geylen]