Questions

How can I go about starting my own tax practice?.

I am a CPA and work full time for the City of Fort Worth. Retiring in 4-5 years.

4answers

You have some useful elements available here for positioning.

First thing to understand is you will not "put out your shingle and they will come." There are many tax accountants and most business owners couldn't tell a good one from a bad one. So you must Stand Out.

You must also develop a source of inbound leads. My advice is to begin at the end, how much money you want to make over a year, and work backwards to how many sales that needs to be (using an average engagement price) and then to how many people you need to be talking to that will result in those sales.

This right here--or the lack of it, really--is why most businesses fail. They think just because they're there they will attract customers...and they don't know what they should be doing every day. They do not define their money target and consequently cannot figure out an activity level. So they sit there, play with their website, and wonder why the phone isn't ringing.

In your case once people get to you or your marketing platform you have a couple things to talk about. First, scarcity. You're retiring and so you only have the time to help a few fortunate people

Second, you have all this experience with the city. You know who to talk to there. That's not directly applicable to the IRS but it might be useful to building contractors and other types of clients who interact with the municipality. If you can use that knowledge and those relationships to help your clients lower their taxes payable, that's valuable. You've also seen administrative process in action so that'll be helpful in your IRS interactions.

IMO you'll benefit most from starting to build proto-client relationships now, rather than waiting. Position yourself to get affluent clients and you'll earn more serving fewer clients. How to do that? Get this book and apply what it says: https://www.amazon.com/Art-Selling-Affluent-Attract-Customers-ebook/dp/B00HTKWMBY/ref=sr_1_1?ie=UTF8&qid=1513859984&sr=8-1&keywords=the+art+of+selling+to+the+affluent

I don't want to come off as preachy, but this is one-way communication right now so I have to say what I believe needs to be said: most professionals who have never run their own business (and I don't know whether you have or haven't before) are gobsmacked by the fact that they must actually market and sell their services. The world does not line up at the door to buy just because the open sign is up.

Resist the urge to "dumb it down". This is a tough concept and I struggle with it, too; however, every time I see an expert try to dumb down their ideas when talking to a marketplace they attract the wrong people. For instance there's a super cool investment banker I'm friends with who at the very lowest level should be talking about the subtleties of why an s-corp election can screw you up. But he forgets, and starts talking to an audience at a lower level...and soon enough, surprise surprise, he's rolling in the mud with the pigs and the pigs like it! Yet if he marketed with an opener about ways to monetize "dead" assets or some other higher level money concept, nobody could argue with him...and the "spider sense" of business owners like me would tingle and we'd pay attention. We might not interact, but we'd learn and start respecting his opinion. The loudest people in a marketplace are not necessarily doing the best--it's no indication of anything other than they like to talk, actually. Sometimes I've seen wealthy people interact a lot; sometimes it's been the broke people with nothing else to do. So stick to your higher level message and attract the people you can serve the best...and can not only afford your rates but *want* to pay them.

As an employee you have been receiving the benefit of the organization bringing in the need for your work. If it was a private company someone would be selling something, and that would justify the expense of having you there. In the city they have figured out staffing and expertise levels required to handle the amount of work required, and you're a line item in a budget paid for by parking fines, property taxes, and a surprisingly small list of other ways the municipality brings in revenue. On your own, you no longer have these benefits. It's completely up to you to bring in the work. And that means you'll have to be doing different things than you were before. Actual accounting work will take a back seat: you'll be marketing most of the time in the early years. Maybe after a year and a half you'll build up enough referrals to back it off to say 50/50 marketing vs work activities. But the big takeaway is this: don't think you'll be doing accounting work most of the time.


Answered 4 years ago

1. Decide who you'd like to work with (i.e. business owners, regular W-2 employees, etc.).
2. Identify your unique value proposition. This is the reason someone would work with you instead of TurboTax or another tax firm.
3. Call on your target market and ask for their business.

Which one of those steps do you feel you will need the most help with?


Answered 4 years ago

The best thing I can tell you is don't focus on how to start it right now. Focus more on why you are starting it, essentially your branding and marketing. Reason I say this is there are plenty of articles out there on how to start your own tax practice. However, it's going to come down to your brand and marketing that make you successful. So, spend a lot of time thinking about what you have to offer that's better and or different, that would be appealing to your future customers.


Answered 4 years ago

The tax world is so complex and vast. Your best course of action is to find a niche market that you enjoy and can specialize. Market that specialty to customers and you should be just fine!


Answered 2 years ago

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