4 Reasons to Diversify Your Tax Business

By Terry Judge | July 1, 2021

It lowers your risk

As the saying goes, “Don’t put all your eggs in one basket.” Diversifying your tax business can help lower your risk, so you’re not relying on one main product or service to keep you going and growing. The same goes for relying on a few big clients. If you lose one big client, it could be hard to replace them, and it might put you into a downward spiral. The world is changing at warp speed. It’s important to always stay one step ahead of the competition and everchanging environment.

It increases your revenue

Your clients already know and trust you. Offering them additional services, such as bookkeeping, payroll, or financial services, will bring in extra revenue and give customers more than one reason to stay loyal to you. Plus, offering additional products and services will increase your revenue — often while leveraging your existing resources, which means your overhead costs are spread across more areas.

It helps you get new clients

When you diversify, you will likely bring on new clients. The new clients may already have a tax preparer, but this new product or service gives you another way to get your foot in the door. Then, you’ll be top of mind and right there, when the need for a new tax preparer arises.

It evens out the uncertain times in business

Every industry has its ups and downs. Diversifying can help you stay profitable when there is a downturn in the economy or in your specific industry. Think about the last year and a half. No one really saw the pandemic coming. Certain industries were hit very hard. Businesses that diversified fared much better than those that only had a core business and were forced to shut down.

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