How can selling your tax services hurt your profits? Aren’t you supposed to be trying to sell your services? How else can anyone keep in business if they don’t? While selling tax services may appear to be a good thing, the way you sell and promote could actually end up hurting your profits. How so?
For one thing, when you promote and sell yourself as a tax preparer or tax professional, you lock yourself into a certain pay scale. There is only so much money you will be able to make off a return. Once the return is done, you’re going to have to wait until the client calls you. If you’re offering year-round service, then you can think about how you can add more value. Sure, you may have clients call you throughout the year with questions or in need of some trouble-shooting advice. However, for the most part, you’re bound to hit a glass ceiling. Furthermore, when you’re targeting small to mid-size businesses for your tax preparation services, you’re going to want to help them solve more than just their immediate tax problems.
Tax Preparation vs. Profit Enhancement
Solving more than just your client’s immediate tax problems involves a slight adjustment in how you see yourself and how you see what it is you do. You’re a problem-solver first and foremost. Your aim is to help prospects and clients solve their problem. You help prospects solve their problem of determining whether you and they are a good fit. You help your clients save valuable time, energy, resources and money. By saving your clients these things, you have now boosted their bottom line profits. This is what we can now call profit enhancement. Instead of simply focusing on just doing tax returns, you can take it further and help your clients to plan their tax strategies. You can also help them by being accessible throughout the year for their questions and service needs. Many self-employed business owners have no clue about taxes and are quite intimidated by the IRS resources. You could be a valuable Profit Enhancement Consultant for your clients in this regard.
Think about it, every business owner or manager is looking for people they can trust to make their work day easier, less stressful, help them save time, money and resources. When you think beyond the simple tax return you can begin to promote your services as an entire package deal. Now you’ve moved away from the per tax return rate and into a flat fee per project. The package spells out all of the ancillary services that you do to help your client. For example, when you do your tax returns for the client, there may be a measure of research required. How many sites, web pages, forms and worksheets do you have to research, find, and collect?
You’ll want to be sure to list all of these in your proposal. Next, how long does it take to really gather all of the correct information from your client? For how long did you speak? Was it face to face or over the phone? All of this takes up your time for which you should get compensated for. Next, your connections and network count for something too. Very often, businesses have a variety of needs. They may be in need of a bookkeeper, loan, a banking institution or some other ancillary service or product. You could build a list or network of trusted vendors, if you haven’t already. Then, whenever you come across clients or prospects that are in need of these, you could happily refer them. On the other hand, you could do a joint venture with these businesses and work out a commission system for mutual referrals.
By promoting your services only per tax return and viewing yourself only as a tax professional, you hurt your profits. Part of your profits are left behind on the table, because you could be earning more by promoting yourself as a Profit Enhancement Consultant. In this way, not only are you able to charge per project, but you’re also able to help your client in a much more empowered way. This simple shift also helps your clients to see you differently and to open up communication about additional related business needs that you could help service. You’re not just another tax professional to them, but you’re also a trusted adviser who is genuinely interested in helping your client’s business thrive and grow.
References:
Seeking Wisdom. From Darwin to Munger. By Peter Bevelin
Andy Frye
Andy is a third generation tax business entrepreneur and Enrolled Agent (E.A.) licensed to represent taxpayers with the IRS. Andy has personally prepared more than 10,000 tax returns and is the founder of Pronto Tax School, Inc., an online education platform that educates and empowers taxpayers and tax professionals nationwide.
