Taxes confuse those who aren’t familiar with all the terms and forms – which is why a tax practice can be so profitable. In addition, people are usually willing to pay hundreds of dollars for the help of an accountant, so you won’t find yourself short on business if you put in the work to attract customers. However, there are some steps you need to take before you can start advertising your tax firm and offering services to the public.
Conducting research is an essential part of planning a business. Everyone needs to file taxes, so there’s a demand for your practice. However, it would help if you still have a gauge on the competition in your area. Big names like H&R Block and TurboTax offer help to the public at low rates, so how will you make your business stand out? What resources can you provide to build trust with your clients? How can you overcome the obstacles of starting a business? It would help if you asked yourself essential questions like these to move on to the next step.
Write a Business Plan
Once you’ve conducted adequate research and know about the hardships of running a tax practice, you can write your business plan. Many people attempt to skip this step, but it’s a necessity if you want the financial help of investors or a business partner. Plus, writing out your plan will give you a roadmap to follow and solutions for obstacles that threaten your company.
Register Your Business
It’s time to make your tax practice official! Now, you need to register your business to operate legally. There are plenty of legal resources to help you if the process feels overwhelming. However, they can be costly, so many choose to do it independently.
From there, you can get your Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which is necessary for hiring people, filing taxes, and opening a bank account for your business. While you don’t need any of these things if you wish to operate as a sole proprietor, protecting your personal assets in a lawsuit against your practice is recommended.
During tax season, you may see a lot of pop-up shops around malls and department stores. This can be a good idea if you don’t want to pay rent on expensive office space or work from home full time. Plus, you can personally reach out to potential customers when they come in to shop and ask if they have questions about their taxes. Giving them reliable information can build trust and bring them back to your tent with a W2 and cash in hand.
Your startup costs may be low if you open a small, seasonal tax practice. However, you still need adequate funds to afford supplies and software that get the job done. On the other hand, you’ll need more money if you want to open a year-round firm. So consider seeking the help of investors, applying for a grant, or getting a loan.
If you plan on running a large tax firm, you’ll need to hire other CPAs to help you carry the workload. Before you open your firm to the public, you’ll need to post some job listings online to bring in help. Since these people will be handling your clients’ most sensitive data, you should perform background checks and ensure they have the proper licensing.
Tax practice management software can help you adequately manage your client base, assign tasks to employees, and do your job swiftly. Without it, you resort to outdated methods of running your business that could make you look unorganized. Plus, most software providers are affordable, offering products at flat, monthly rates.
How to Get Clients
There’s no magical way to get clients in the door fast. Instead, you need to dig deep and put on your sales hat. You may need to use cold outreach methods and set up your shops somewhere noticeable. Then, create something to catch their eye and draw them to you. This can be fun artwork, inflatables, or even promotions. Then, once you get people in the door, it’s up to you to close the sale.
After the first year, your satisfied clients may keep coming to you for the tax needs yearly. Then, you won’t need to spend as much time on outreach. This is only true if you provide valuable services to them that makes them want to return. Do something that makes your service memorable – go the extra mile. Hiring a dedicated salesperson is still recommended to keep steady business flowing.
Tax practices can be lucrative and fulfilling if you put in the work to bring your idea to fruition. Many people expect to make a social media post and have an immediate business. But, first, you need to take legal steps to establish yourself and get the necessary tools to run your business. Then, show people that you can provide an immense value they can’t get anywhere else.