What’s your backup plan?

After returning from my recent vacation, I decided that I didn’t want to spend the winter in Wyoming as I had originally plan. Because snow.

So I moseyed on out to the Puget Sound area.
I’m staying on Bainbridge Island for the week, and had a CPE webinar scheduled for this morning..
Unfortunately, the weather decided that tomorrow would be a better day for that webinar.
Overnight, a snowstorm moved in, and dropped a whopping quarter inch of snow on the ground. Back home, a quarter inch would simply be a big nothing burger. But here, the wet snow was heavy enough to snap power lines, close schools, and shut down roads.
I was able to get a couple notification emails out via cell phone (since many cell towers have backup generators), but even 4G LTE isn’t really adequate to run a webinar from.
For something as simple as a webinar, “postponement” is an acceptable backup plan.
But for bigger things in your business, you need a real plan.
A robust plan.
Really, a set of plans for weathering much more than a measly quarter inch of snow.
Have you given this much thought? Have you given thought to what you would do to survive if certain things happened that impact your business?
For example, what if Congress passed a law (and provided the funding) to mandate that the IRS do what a number of other countries already do, and pre-prepared most people’s tax returns? After all, the IRS already has the data on file to do this for the majority of taxpayers, and there is a small movement to make this happen.
How much of your tax prep business would disappear as a result?
For most preparers, at least 3/4 of their business would disappear overnight if this were to happen. One stroke of a pen (and a strangely coordinated Congress), and an entire industry vaporizes.
What would you do?
You may think this is a far-fetched example, but the exact same thing is already in progress, at a much slower pace, due to the rise of AI.
What about bookkeeping? How much of your revenue comes from recurring bookkeeping clients?
You know that AI
Continue reading

There are only three ways to increase profits in your practice

Is your accounting firm properly poised for a revenue boost?

Do you want to increase your take-home profits in 2020?

Do you know the fundamental mechanics for making this happen?

Do you love emails that start with a series of questions?

If you’re going to increase revenues, and most importantly, profits, within your tax or accounting practice, then you need to be aware of the three ways for doing so.

Yes, there are three ways to make more money…. and only three.

Once you understand these three things, you’ll also understand the fundamental formula for growing any business.

Every business, from your local car wash to Pepsi to Saudi Aramco, all rely on these exact same three fundamentals to grow their top (and bottom) lines.

What’s the formula? What’s the secret sauce? What are the magic three ways to make more money?

1). Get more customers.
2). Get more money from each customer transaction.
3). Get more transactions from each customer.

I’m sure you’ve heard this before. It’s not secret, magical, or hidden. Well, maybe hidden in plain sight, but I digress.

These are the only three methods that exist on the face of the Earth to grow your revenue. Understand this basic business concept, and you’ll be at least 1 AU (astronomical unit….light years are too cliche) ahead of your competitors.

Now, you can evaluate your marketing and other business decisions against the standard set by these three things. Whenever you are faced with a business decision, a potential expenditure, an opportunity…ask yourself if it achieves one of the three objectives:

-Will this get me more clients?
-Will this increase my revenue per client for a particular service?
-Will this increase the number of times I can get paid by a client?

In my book “Tax Season Profitability Guide: 8 Big Ideas For A More Profitable Tax Season”, the first chapter goes into greater detail about this specific business growth concept. This big idea doesn’t just apply to tax season, of course (thus why I consider the book title to have been a bad choice), but rather applies to every service you offer, year-round.

Out of the 10 books I’ve written, I consider this one to be the most important one for you to read. You can snag your copy here:

Continue reading

How to offload your tax prep work

In reply to yesterday’s email, one CPA in Missouri lamented:

“You are correct. So what are you selling?”

Yesterday, nothing. Today… Keep reading. 🙂

The more obvious reply to yesterday’s email is: How does one execute a transition to other service offerings?

For this, I have a straightforward answer. If you’re sick and tired of filing season, pay attention.

First, start **marketing** for your new service offering. It doesn’t matter what time of year it is, what the service offering is, whether you have the necessary tools and tech in place, the lack of relevant staff, your lack of specific skills. None of that matters. Seriously, none of it.

Start. The. Marketing.

Too many accountants get bogged down in the minutiae of setting up a service offering. They spend way too much time evaluating software providers…waiting for the “perfect” time to start…waiting to meet that perfect potential new hire.

Stop waiting. Start the marketing. Everything else will come about from there, out of necessity. Hiring the perfect person or buying the perfect software is absolutely irrelevant without lead flow.

That’s step one.

Step two: Start offloading your tax prep work.

This is far easier than you might think it is. Tens of thousands of return preparers have already done this, and thousands more are going to be doing it each year. There are several options for doing it.

Option 1: Quit cold turkey. Several of our Tax Resolution Academy® have chosen this option over the years. Last year, Carlos Samaniego, EA in Los Angeles chose this option, simply telling clients he would no longer be preparing tax returns. I advise sending a letter AND an email to clients, with a referral to a trusted tax prep colleague (a colleague that you arranged a referral fee arrangement with in advance, of course — always the capitalist!). You could either do this NOW, or prepare returns this one final year and then turn people offer to somebody else.

Option 2. Offshore your tax prep. Like I mentioned yesterday, IPA 100 public accounting firms have been doing this for 20+ years. It’s the *norm* in large accounting firms, because tax prep simply isn’t the most profitable thing these firms can spend their time doing, by a long shot. You need to disclose the fact that you’re doing this, via your 7216 disclosure (which you should already being giving to clients anyway). You then need to choose a Business … Continue reading