Tax Office Site Selection: 7 Things to Consider

If you’re thinking of moving into a brick and mortar space this coming tax season or want to increase your volume by expanding, it’s time to start planning where your new office(s) will be. Office site selection is something that takes time and planning to ensure you choose a location that will draw a lot of traffic. Here are some things to consider when selecting a location.

Type of location

You’ll want to make sure that your office is in a desirable location while also considering costs associated with different types of leases. For example, going with a location in a professional office park versus a retail shopping center. The public has become comfortable with storefront professional services. For the general taxpaying public, tax preparation is a retail consumer service and is best suited to a retail shopping environment. Therefore, retail spaces should be higher on your list of locations.

Alternative retail outlets that can be occupied only during the tax season reduce occupancy costs dramatically while not presenting a fly-by-night image. These sites include kiosks and temporary storefronts in shopping malls, leased-departments in discount department stores (i.e. Walmart), and even seasonal refund anticipation loan (RAL) processing sites in check cashing and convenience stores, inner-city supermarkets, car dealerships and retailers that cater to low-income taxpayers.


Convenience to your target market is a huge factor to consider. Studies have shown that taxpayers, as a rule, prefer to have their taxes done near where they live and shop, not where they work. Especially today, with both spouses in most households working, taxpayers need to have their taxes done when they’re off from work at a location near home.


The population base of a given office location is affected by the population density. When considering a tax office site, your first question should be: Are there enough taxpayers in the area to support your tax office?

To answer that question, you must first decide how many taxpayers are necessary and then determine if at least that number could be served by the office you are considering. The IRS compiles statistics on numbers and types of all tax returns filed from each zip code, which can be downloaded from the IRS website here: e-file demographics.

Proximity to your competitors

Your competitors (direct and indirect ones) will take market share as long as they stay in business, and they will have an impact on how much market share you can realize. However, this does not necessarily mean that you should avoid locating near your competitors. Because the tax preparation industry is mature, you are not likely to find many excellent locations without a strong competitor at or near the ideal site. One strategy would be to locate as near as possible to the most successful tax office(s) of your competitor and do a better job of delivering value to your clients. Another possibility is to find a location where the population is moving away from the original shopping hub–where a major competitor is located–and beat your competitor to a new shopping center to which consumers are gravitating. In any case, you should strive to find a more visible location with a better image and signage, do a better job than the competition and find ways to differentiate and effectively market your tax service.


High visibility increases consumer traffic–the lifeblood of a mass-market business–and magnifies the impact of mass-media advertising. You’ll want to select a location that can be seen from the street by both vehicles and pedestrians no matter which way they are traveling. You should also do research on the following factors:

  • Consumer shopping habits in the area
  • Barriers people will not cross (physical and/or psychological)
  • Traffic flows, patterns and roads
  • Proximity to other consumer attractions (e.g. a major retail store)
  • Public transportation.

Year-round leases

Leasing of full-service offices must be done with great care due to the seasonality of the tax business. A year-round lease in the wrong location can be disastrous. You should almost never lock into a long-term lease at a new location. If a short-term lease with an option to extend is not acceptable, a reasonable and acceptable alternative is to negotiate an “escape clause” permitting cancellation on May 1st if, and only if, the revenue realized during the tax season is insufficient to justify year-round rent. If you’ve picked the wrong location, you will be better off canceling even if you must agree to a penalty to cover any landlord build-out costs incurred or 1-3 month’s rent to cover the time needed by the landlord or leasing agent to find a new tenant.

Commercial leasing agents

Some business owners seeking commercial rental space rely on commercial leasing agents to find space that meets their needs. Many commercial leasing agents will provide this service for free because they can earn a broker’s commission by bringing you as a new tenant to a landlord.

Some commercial leasing professionals charge fees to help tenants find offices. If so, they should do much more for you than simply serve as a broker. Using a broker has some advantages and disadvantages.

Advantages include:

  • Saving you the time of having to search for available locations yourself.
  • Bringing you the benefit of their leasing knowledge and experience and their knowledge of the local commercial leasing market.
  • Providing services (including site-selection and lease negotiations) at no cost to you.
  • Making you aware of locations coming up for rent that may not yet be on the market.

Disadvantages might include:

  • The broker may steer you to an office that is not the best available location for you in the interest of earning a higher commission or favoring a particular landlord.
  • The broker may not be sensitive to or knowledgeable about factors that are of concern to you in selecting an office location.
  • The broker may be more concerned about the interests of the landlord, since the landlord is paying his or her commission and the agent will want to earn additional commissions from the landlord in the future. Also, higher rent will yield higher broker commissions.
  • By using one broker exclusively, you will miss out on the advice and information you might get from talking with several competing brokers. If you are paying the real estate professional (and the landlord is not), some of these disadvantages may not apply.

This is just the tip of the iceberg! You definitely want to take your time when picking a location to ensure you’ve thought everything through. 

Thinking of expanding your tax business?

Check out our Tax Office Operations Manual. This comprehensive manual outlines effective company policies and procedures and communicates them to your employees and clients. If you’ve got two or more employees working for you, it’s important to have a resource available to help your staff understand your company’s philosophy and increase consistency in your operations. Downloadable files and templates included to customize to your needs.