7 planning considerations for this fiscal year

7 planning considerations for this fiscal year

If you’re the person who’s always helping family and friends prepare their taxes, it might be time to start your own business. After all, tax preparation is in demand every year, and you’ve found that you have a facility for finding solutions and helping people navigate the tax-code maze. Plus, the IRS’ stricter requirements for credentialing and continuing education create opportunities, as the casual tax preparers drop out and leave the field to entrepreneurs with dedication and drive. 

The first step is nailing down your business plan. This step-by-step guide shows you how easy and rewarding it is to get credentialed, write your plan and launch your business on the road to success. 

7 keys to creating a business plan for tax prep service 

Maybe you’d rather dive into your enterprise without a business plan, but research says that businesses with a plan grow more quickly and are likelier to succeed than those without one. Fortunately, your business plan doesn’t have to be long and complicated. Even a lean one-pager can launch your business with a direction and destination in mind. In fact, research also shows that simpler plans are updated more often and are easier to review.  

Effective business plans discipline you to set regular goals, track your progress and adapt as you learn more about your customers.  

Follow these seven keys to writing a business plan, and your tax practice will take wing.

Proper training and continuing education 

People trust their tax preparers with the solemn responsibility of helping them navigate the tax-code maze. That’s where proper training and continuing education enter the picture. Consider these two credentials that project professionalism and expertise: 

  • Enrolled Agent (EA): The enrolled agent is the IRS’ highest credential for tax preparers. The EA confers unlimited practice rights, giving you the power to represent your client before the IRS, everywhere in the U.S. As an EA, you become an indispensable adviser with higher earning power as clients seek out your help year-round. The credentialing process includes an IRS exam, so if you decide to become an EA, Surgent Income Tax School can set you up for success. After you’ve taken a few tax courses and think it’s time to rise to the next level, consider registering for the Surgent EA Review course. It’s the fast track to becoming an enrolled agent, from an industry leader in EA Exam preparation.  
  • Certified Public Accountant (CPA): The Certified Public Accountant process is rigorous, but attainment proves your mastery of tax matters for a wide range of clients. 

Continuing education is a mainstay in credentialing and professionalism because the tax code is complex and ever-changing. Surgent Income Tax School offers a variety of highly relevant CE courses to help you stay compliant on tax law changes and up-to-date with trends in tax preparation. 

Marketing strategies for your tax prep business 

Building a social media presence establishes your brand, differentiates your services, builds engagement and loyalty, and attracts new clients.  

But remember that social media demands a constant stream of content. Map out a weekly or monthly social media schedule, and consider these ideas for keeping it fresh: 

  • Blogs: Establish yourself as a tax-preparation expert by offering advice, answering frequently asked questions or sharing your take on current events. 
  • Infographics: Visuals get attention, and with a Canva account, you don’t need to be a graphic artist to explain taxation issues in pictorial form. 
  • Memes: Show your sense of humor by sharing relevant memes or making your own.   
  • Videos: Videos drive engagement. Keep them under 60 seconds, and add text in case the viewer turns off the sound. 
  • Q&As: Show your expertise and offer value to potential clients. 
  • Promotional material: Go easy on self-promotion, but occasionally share client testimonials, descriptions of your services and any deals or specials you might be offering. 
  • Polls: Everyone likes to share their opinions. Create quick polls with questions related to preparing taxes. 

Provide excellent customer service 

In a competitive field, how do you stand out from the crowd? Customer service is the key to differentiation. These techniques build loyalty and attract new clients: 

  • Be a good listener: Find out what’s important to your clients. 
  • Be a clear communicator: Make it clear from the outset what you will deliver and what you expect from your client.  
  • Give more than expected: Value-add means offering a little extra, even if it’s preparing your client’s teenage child’s 1040EZ for free. Or share a special treat, such as gourmet coffee or cookies on the table.  
  • Treat your employees and clients well: Thank your employees, share fun excursions or office perks (chair massages are always welcome) and provide the training and equipment they need to do their jobs. When they’re happy in their work, they will be pleasant and helpful with your clients. While you’re at it, thank your clients, too. Make sure they have everything they need to make tax time easier. 
  • Ask for feedback: In person or by survey, find out what clients think of your services and manners. Be open to constructive criticism, and show that you’re listening by crafting solutions.  
  • Provide year-round attention: Keep in touch, and top of mind, with monthly email updates. Share tax tips, office news and even personal notes on your life and family. Let your clients get to know you, and they’ll be more comfortable sharing their personal information with you at tax time.  

Manage your time

Tax time is insanely busy, but it’s also the most critical time for paying attention to detail. Stay focused and productive with these tips: 

  • Create multiple lists: Create that daily list of the things to finish each day but get more done by complementing it with separate lists devoted to projects, monthly and annual goals, and personal goals. Put your dream accomplishments on a bucket list, and think about how to move them toward your goals lists. 
  • Prioritize your lists: When you tackle your easy tasks first, you don’t accomplish much of significance. Instead, try Brian Tracy’s classic “Eat That Frog” approach. Tackle the most productive item, even if it’s the ugliest frog on the list, and things will start to happen. 
  • Make time to get work done: Create “do not disturb” time and stop checking emails constantly. Instead, schedule times for checking email at regular intervals. 
  • Re-evaluate your lists: Review regularly and ask if delegating the simpler tasks frees your time for more lucrative pursuits.  

Make sure you get paid

When you think about launching your business, it’s possible that you didn’t think much about the crucial matter of getting paid. You might even dread the idea of chasing after clients with unpaid invoices. Developing a strategy upfront helps you avoid the aggravation and get paid more quickly, so try these tips: 

  • Put due dates prominently on invoices. Terms like “net 14 days” get less attention than actual dates. 
  • Include the invoice with the tax return. 
  • Ask for payment up-front or a 50% deposit when you meet clients and collect documents. 
  • Accept credit cards or use electronic payment exchanges. 
  • Send overdue accounts a red invoice. Often, bills go unpaid because the recipient is distracted or didn’t get around to it. Red gets their attention.  
  • Offer a payment plan. For clients with complex tax returns, a payment plan can help them stretch out their budgets. 

Diversify your tax prep services

Fill your business plan with a slate of diverse services and you muscle up your year-round earning power. Consider these possibilities: 

  • Business tax preparation and consulting: As you pursue continuing education and earn your EA credential, you learn more about preparing business returns. Put that knowledge to good use by marketing your business capabilities. 
  • Payroll tax filings: Let your small-business clients know that you can take payroll tax filings off their hands. 
  • Tax representation: When your clients have business to conduct with the IRS, you can be at their side if you’re an enrolled agent. 
  • Tax planning services: Think back to your tax-time clients who made choices that cost them on their tax returns. Offer consultation on planning that minimizes their tax liabilities next year.  
  • Financial services: While preparing taxes, you report on your clients’ IRAs, 401(k)s and other investment vehicles. Expand your pool of year-round clients by helping them manage, protect and maximize their investments. 

Sample business plan for tax preparation service 

Now that we’ve covered the essentials of starting and growing a business, it’s time to corral them into a business plan. For a comprehensive plan, include these elements: 

  • Executive summary: A good executive summary puts the key points of your plan in bullet points. Write it after the rest of the plan is complete, and you’ll have a quick reference you can check frequently for review and updates. 
  • Products and services: Describe exactly what you will offer your clients. There is tax preparation for individuals, of course, but you can also offer bookkeeping, bank products that streamline how clients get their refunds, and tax prep for sole proprietors and freelancers. 
  • Market analysis: Draw a picture of the business landscape, identifying target customers and their needs, fees that clients typically pay, the competition, the regulations and requirements you face as the cost of doing business. Scrutinizing the specialties of potential competitors can reveal voids that you can fill – perhaps offering tax preparation for gig workers out there delivering restaurant meals or shared rides. 
  • Execution: This is where you detail your market plan, customer acquisition strategy, necessary equipment, location and timeline for important events and target dates. The timeline makes it more likely that you’ll reach your goals. 
  • Financial plan: Numbers matter. Here’s where you detail start-up and operational costs, your fees, the number of clients you’ll need to make a profit and projected profits for the first year. 

Put your business plan for tax prep service into action 

Think about the things that go more smoothly with a plan in place. Vacations. Business trips. The daily rush of family life. A plan helps ensure your satisfaction and productivity, and that’s true for launching a business. Even if you’ve been preparing tax returns for several years, you’ll find that stepping back and gathering your goals into one document provides focus and direction.  

The highly relevant courses from Surgent Income Tax School equip you with the latest knowledge in tax preparation. Add a credential such as the enrolled agent, and you establish yourself as a capable, recognized professional. Take these steps to attract new clients and add value for existing clients, and your business will grow according to plan. Check out our website for a list of continuing education courses that can take your tax prep business to the next level.