5 things to know before starting a tax business

5 things to know before starting a tax business

Starting your own tax business can be a lucrative venture for those with an entrepreneurial spirit. While it may seem like a daunting task, with the right preparation and knowledge, anyone can start their own tax business.  

Before you start your own tax business, it is important to understand what it entails. Tax businesses can provide a range of services, from basic tax preparation to more complex tax planning and advice. Starting your own tax prep business requires a certain level of knowledge and experience, but it is not necessary to be a CPA or have years of experience in tax preparation.  

With the right training and resources, anyone can start a successful tax business. In this article, we will discuss five key insights that you need to know before you start your own tax business. 

The importance of marketing

If you search for “How to start my own tax business,” you will find that one of the most important aspects of starting a tax business is marketing and promotion. In order to attract clients to your business, you need to make sure they know about your services. While it’s quite possible that marketing efforts can incur large expenses, not all marketing needs to be expensive. In fact, several cost-effective options are available to promote your tax service as a competitive alternative to options in your area. Low-cost marketing can be done through advertising, social media and other forms of digital marketing.  

Another important aspect of marketing is building and maintaining your reputation. Word of mouth is an incredibly powerful tool in the business world, and a positive reputation can lead to more clients and increased revenue. Make sure to provide excellent customer service and go above and beyond for your clients to build a strong reputation in the community. 

You don’t need to be a CPA or have tax experience 

Contrary to popular belief, you do not need to be a CPA or have years of extensive tax experience to start your own tax business. While it is essential to have a basic understanding of tax laws and regulations, there are many resources available to help you learn the necessary skills.  

There are tax preparation courses and software programs that can help you learn the ins and outs of tax preparation. You can also hire experienced tax preparers to work for your business and provide training to new employees. 

Surgent Income Tax School offers a variety of tax prep courses for beginners, training programs and continuing education courses to make sure you have everything you need to become a successful tax professional. 

Create additional revenue streams 

If you want to maximize your revenue potential, it’s important to have additional revenue streams in addition to tax preparation services. By diversifying your services, you can attract a wider range of clients and increase your revenue potential. 

Don’t depend solely on the busy season to sustain your business. Since most of your business is generated during the concentrated tax filing season between January and mid-April, it’s worthwhile to offer additional services to your tax clients as a way to generate income throughout the year. 

Your additional services could include: 

  • Bookkeeping and payroll services 
  • Financial services and products 
    • IRAs and other retirement plans 
    • Insurance products 
  • Audit assistance 
  • Financial adviser 
  • Real estate broker 

As a tax preparer, you have access to your clients’ financial information, which makes it a great opportunity to offer additional services and generate year-round revenue after building a trustworthy relationship with them. By offering additional revenue sources like financial planning services and bookkeeping, you can expand your business while providing additional value to your clients. 

Location, location, location

The location of your tax business can be one of the most important factors in the success of your tax preparation business.  

When considering location, you’ll want to make sure that your business is in a visible and accessible location — preferably in a high-traffic area. You also want to make sure that your location is convenient for your clients. Consider the demographics of the area and the types of clients you want to attract when choosing a location for your business. 

The right location can also help attract and retain the best employees. Depending upon the market and your desired clientele, consider a location within proximity to a college campus as it could help with recruiting for internships or entry-level positions. 

Other factors to consider when determining the location of your tax business include market demographics, the area’s zoning structures and rules, and the quality and status of the building you buy or lease. 

Offer discounts and incentives

If you want to attract new clients and build your business, you should consider offering discounts and incentives. While it’s certainly a challenge to compete with national franchises, you don’t have to be a large franchise to offer the same refund incentives or products as the big tax preparation companies.  

Incentives can include offering a discount to new clients or providing a referral bonus for clients who refer others to your business. You can also offer free consultations or other incentives to encourage potential clients to try your services. 

Discounts can help in attracting more customers and increase revenue, especially during the tax season when there is high competition. It can also help in building a positive reputation for the business and increase customer loyalty.  

By offering discounts and incentives, a tax business can differentiate itself from competitors and encourage clients to return year after year. 

Ready to start your tax business?

Starting your own tax business can be a rewarding and profitable venture. Following these key insights can set you up for success and build a thriving business. Remember to focus on marketing and promotion, diversify your services and choose a location that is visible and accessible. With the right preparation and resources, anyone can start their own successful tax business. 

Starting a tax business requires a certain level of knowledge and experience, but it is not necessary to be a CPA or have years of experience in tax preparation. With the right training and resources, anyone can start a successful tax business. 

To learn more about becoming a tax professional, visit the Surgent Income Tax School for CPE courses. No matter where you are in your journey as a tax professional, Surgent Income Tax School can help you learn how to start and grow your own business