How can selling your tax preparation services hurt your profits? Aren't you supposed to be selling your services? How else can you stay in business if you're not selling? While selling your services may look like a good idea on the surface, it's the way you sell and market yourself that could end up costing you in profits.
Here's how: For one thing, when you sell and promote yourself as a tax professional you're locking yourself into a limited pay scale. There are only so many hours in the day and there is only so much money you'll be able to make off each return. Once you've completed the return, you're waiting for the client to call you back. If you're offering service year-round, then you'll want to consider how you can add more value. Yes, you may have a client call you throughout the remainder of the year, but you're going to hit a glass ceiling. Also, when you're targeting small and mid-size businesses, you want to do more than just their taxes.
Tax Preparation vs. Profit Enhancement
When you're solving more than just immediate tax issues for your clients, you'll want to make some slight adjustments in how you see yourself and what it is you do. First and foremost, you're a problem-solver. Your goal is to assist clients in finding solutions to their everyday problems. You also want to make sure that you and the prospect are a good match. Your job is to help your clients preserve their precious time, energy and money. By doing this, you now help them to boost their bottom line. This is what is called Profit Enhancement. Instead of just focusing on doing tax returns, you're taking it further by helping your clients to plan their tax strategies. You can also be a great source of help, by making yourself accessible throughout the year for any further questions, concerns or service needs. Many business owners don't have the first clue about taxes and feel quite intimidated by the IRS. This is where you could become an indispensable Profit Enhancement Consultant for your clients and prospects.
When you really think about it, every business manager needs people they can count on to help make their workday less stressful, and help them to save money, time and resources. Think beyond the simple tax return and begin to promote yourself as a package deal. This enables you to move away from simply doing tax returns and into a flat fee per project rate. Your package will spell out all the ancillary services and bonuses that you do to help your prospect and clients. For example, when working on your client's tax return, there may be some research required. How many sites, books, web pages, worksheets, and forms must you locate, research, and collect?
Be sure to list these steps in your proposal, so your client can see what is involved in working on the project. Don't assume that your clients know. Next, you'll want to evaluate how long it takes you to gather all the necessary information from your client. Did you speak on the phone? For how long? Did you meet face to face and for how long? All of this takes up your time for which you should get paid for. Your connections and network count for something too. Businesses have a variety of needs and while they may need a tax professional, they may also need a loan, bookkeeper, or some other services. By building your list of trusted vendors, you then can offer your clients the additional bonus of being able to refer them to quality vendors. Alternatively, you could team up with those vendors in a joint venture. There you can work out a commission or rewards system for mutual referrals. This works well with businesses that complement each other. (For example, a lawn care or landscaping service teams up with a pest control service.)
When you view yourself as only a tax professional, you can end up hurting your profits. Part of the profits are left behind on the table, do not promoting yourself as a Profit Enhancement Consultant instead. By viewing yourself as a Profit Enhancement Consultant you are now able to charge per project fees and help your clients in a much more empowered way. Not only will you benefit, but so will they, because you are able to offer a host of benefits, aside from tax preparation. This shift also enables your clients and prospects to see you differently. It enables them to have open communication about any additional needs that you could help with. You're not just another tax professional, but you're a trusted guide who is genuinely interested in helping them succeed and grow.
Seeking Wisdom. From Darwin to Munger. By Peter Bevelin