Five Best Practices for Starting Your Own Tax Business

Becoming a business owner is a big step, but can be extremely fulfilling. Many tax professionals (including myself) have made the leap and you can too with the right tools and advice.

If you’re ready to start your own tax business, here are five best practices employed by many of the national tax firms out there – including my own business, Peoples Tax.

1. Employ Systematic Operating Methods

Developing systematic operating methods is one of the key principles of business success. You should start by writing down all of your processes – everything from answering the phone, to handling a complaint or issue. This way you can systematically develop policies and procedures for training staff in the future.

2. Hire loyal employees who are on board with your company philosophy

Make sure you are properly interviewing and screening applicants to prevent bad hires. You should only hire people who wholeheartedly agree with your company philosophy or they will not be long-term employees and will cost your business time and money.  Hiring and training a new employee is very expensive, so make sure you hire the right person the first time.

3. Make sure your staff is properly trained

Proper training is very important and should start with personnel policies and procedures in your employee manual. The person in charge of training staff members should not only go through the manual with all new staff, but also ensure that they understand all of the policies and procedures involved.

If you are teaching new staff tax preparation, you should ensure that you have the best tools and manuals to make them qualified and competent preparers.

4. Choose the right location

Ultimately, no local retail consumer business can prosper without a sufficient local population of prospective consumers to draw from.  If you operate a true mass-market tax service, all taxpayers are prospective clients however, not every person in the population count is a taxpayer. The IRS compiles statistics on numbers and types of all tax returns filed from each zip code. The U.S. Census Bureau is also a great source of demographic information broken down geographically (by zip code). You can also contact your local Chamber of Commerce for assistance in site selection.

In addition to a population to draw from, you should consider the following factors:

 

  • Are there any physical or psychological barriers at this location?
  • Where are you in proximity to your competitors?
  • Is the demographic of the location changing? What are the future trends?
  • Is there pedestrian traffic?
  • Is the space visible from the street with the speed of traffic flow?

5. Use cost effective marketing strategies

When you first get started, you most likely won’t have the resources to advertise on major media outlets. It’s very expensive to try and compete with national tax firms on this level when it comes to marketing. There are some very effective “guerilla marketing” tactics that you can use, however to gain visibility and traffic.

Here are some ways you can market your tax business:

  • Networking and speaking in the community (especially during tax season)
  • Online marketing
  • Referral programs
  • Guest writing for local organizations
  • Social media marketing

For further resources on starting your own tax business, check out our Tax Practice Management Tools here. You should also join our community of tax business owners on LinkedIn.

Further reading:

Top 3 Strategies to Marketing Your Tax Business

How to Recruit and Train Tax Preparers

How to Compete with National Tax Firms

How to Use LinkedIn as a Tax Professional

Three Ways to Gain Repeat Business and Recommendations

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