You gotta see what this guy is doing to get clients…

May 2013 Advanced Tutorial

Over the weekend, I discovered an Enrolled Agent that is simply rocking it with the simplest marketing plan on the planet.

In fact, it’s an even more simplified version of the simple plan that I’m always talking about for solo practitioners.

This EA asked not to be named, but he allowed me to share with you the details of how he’s building his practice. In short, he has the simplest marketing plan in the world, and it’s working very, very well for him.

He is a solo practitioner that does ONLY collections representation work. He doesn’t have a large practice, but more than adequately supports his family on three new clients each month.

His fee model is also simple: Hourly billing with a $2500 minimum retainer. Most of his cases exceed the initial retainer by at least $1,000.

Here’s his entire marketing plan:

  1. Every month, purchases 800-1000 tax liens for 941 debtors across the country, with debt amounts between $50,000 and $200,000.
  2. Runs the contact info from the lien through a separate data service to obtain the home address of the business owner, from which he will obtain at least 500 home addresses.
  3. Using the 500 best results, send a simple, one-page, no frills letter of introduction in a stamped, hand addressed envelope (his wife and two children help with the addressing).
  4. In the letter, he does nothing but mention how he found them, how he can help, and offers both a free consultation and invites them to sign up for his email newsletter.
  5. Every other week, he emails out a helpful piece of tax advice.

Between the mailings themselves and the email newsletter follow up, he generates $7500 per month in new retainers.

That’s it. That’s the entire secret sauce. Let’s look at his costs:

Liens: $200

Address lookup service: $160

Paper: $20

Toner: $60

Envelopes: $20

Stamps: $230

Email service: $50

—————————

Total: $740



That’s just $740 per month to generate $7500.

Of course, this doesn’t count the value of the time that goes into preparing the mailings. It’s basically a weekend project once a month for the entire family, he said.

The most amazing part of this, to me, is that he’s been doing this, month in and month out, for over 10 years. This is what he was doing when he first obtained his EA license, and it still works, so he keeps doing it.… Continue reading

Template letter for getting client referrals

It’s a well known fact in the world of sales that the best time to ask for referrals is right after closing a sale.

Why is this?

When a new customer has made the decision to purchase your services, they are at the highest point emotionally that they will ever be towards you right at that moment.

Successful sales and marketing professionals (and remember, that’s what you are first and foremost) will capitalize on this by asking for referrals at this critical time. Think about it: Your tax prep clients are happiest with you when they have made a purchase. In other words, the best time to ask them for referrals is when their tax return is done, they’re relieved that another tax return is done and gone, and they’re writing you a check.

So, that’s priority number one: From here on out, always ask clients for referrals when they come to pick up their return.

But, what if you haven’t been doing this all tax season? What if you don’t even do tax prep, but have a slew of old case files from collections representation work that you’d suddenly like to try to get referrals from?

Never fear, because your referral generation template letter is here!

The key to using a letter to obtain referrals from client, regardless of how long ago or how recently the client interaction, is to always remind clients about the value they received from you. Then, let them know that other people they know can get the same benefit, making them look like a rock star for putting the two of you in touch.

If the preceding paragraph didn’t completely sink in, you may want to re-read it. In two sentences, you have the entire idea behind referral systems that cost thousands of dollars to obtain from seminars. If you can really understand this basic concept and apply it to your business, you can drastically increase the growth rate of your business from referrals.

To ask for referrals, all you need to do is ask. I know that many practitioners are too shy to ask for referrals in person, or think it’s unprofessional. If you know that your services provide great value to your clients, then you should honestly have no qualms about asking people for referrals. Why hide yourself from somebody that desperately needs your help?

So if you’re too shy to ask in person, then there … Continue reading

Understanding tax breaks for higher education

If you’ve been effected by the economic downturn and decided to return to school to further your own education, or you support a dependent that is a college student, there are three education tax breaks that you should be aware of.

Each of the three is unique, and only one of them can be claimed for any particular student in a given tax year. But, you can claim one type of education credit for a child, for example, and another type of credit for yourself.

The three most common tax breaks for higher education are:

  1. American Opportunity Credit (AOC)
  2. Lifetime Learning Credit (LLC)
  3. Tuition and fees deduction

All three of these tax benefits can be claimed regardless of whether you itemize or claim the standard deduction. The AOC and LLC are claimed using Form 8863, and while the IRS didn’t start processing tax returns filed with this form until late in the current tax return filing season, they are now doing so. The tuition and fees deduction is claimed using form 8917.

A few legislative notes:

  1. The “fiscal cliff” bill passed Jan 2, 2013 by Congress extended the AOC through tax year 2017.
  2. The same law also retroactively extended the tuition and fees deduction through tax year 2013, since it actually had expired at the end of 2011.
  3. The LLC is a permanent part of the tax code (at least for now – that could change tomorrow, of course).

It should be noted that none of these tax benefits can be claimed by a non-resident alien, nor a person filing as Married Filing Seperately.

The AOC is aimed at full time college students completing their first four years of undergraduate education. Students must be at least a half-time student for at least 5 months out of the year to claim this credit, and they must also not have any felony drug convictions. The Lifetime Learning Credit, as the name implies, is applicable to all students, including part-time and graduate students. The tuition and fees deduction generally provides the least direct tax benefit, but can usually be claimed by people that can’t claim one of the other two for some reason.

The most common reason for not being eligible for one of the other two tax credits is due to income limitations. For 2012, the AOC starts to phase out for single taxpayers with adjusted gross incomes over $80,000 (double that for married couples), and the … Continue reading