Big Mistakes Tax Pros Make – Not charging enough for your services Here is one mistake that most all small office tax pros make. The problem is when we first started our practices, we wanted to generate revenue to offset the costs we were incurring. Even though we bought cheap software (ATX or Drake for example), we had a small office in our home or nearby and still had office supplies, a laptop or desktop computer, and color inkjet printer, these things still cost money. Plus we still had to generate enough cash to help pay personal bills. So, what do we do? We sell our services very low to get people in the door. I have seen many people prepare a Form 1040 for $100-250 (and including their state return, if applicable). Then couple this with Mistake #3 (Not Raising Fees Annually), and then you can see why most tax pros don’t make a lot of money and are too cheap to spend/invest on new things. One thing that I did well was always increase my client’s fees 5-10% every year. The first few years, I did not increase my base fee. Back in 2014, I set my base 1040 fee at $300. I then proceeded to increase that base fee $50 each year through the 2020 tax return season. Then in the 2021 tax return season, I decided to do a dramatic increase of $150 for 1040 and $500 for business returns. I think this was the biggest reason that my gross revenue increased 20% that year. I did this by not greatly increasing the overall number of clients. By the way, when I increase my base fee each year, this is for NEW clients. Existing clients get an annual increase (which was around 10% this past year for just about everyone)! Oh, yes, some of you think that I don’t get that many new clients with fees that high. And you would be correct. I don’t need to. If I charge $2,000 for a business return and if I was charging $1,500 previously, I can get 3 clients at $2,000 vs 4 clients at $1,500 to make the same money. Would you rather have fewer clients making the same money than more clients and more work? Plus, it is amazing that the higher you charge for your services, you get more respectful and better quality clients. I triple dog dare you to |
Big Mistakes Tax Pros Make – Not following up with prospects
One of the most important things I’ve learned to do to make more money in my tax practice? Follow up religiously, relentlessly, and automatically... Big Mistakes Tax Pros Make – Not following up with prospects As a tax pro, I get busy like the best of them. Especially when it is only you or a few other staff (who are also very busy) in the office. If you are like me, you have been doing so many different marketing methods for a long time of trying to get new business. Many of those methods are now working very well in attracting leads and prospects. You get many people who call, email or text you about wanting to be your client. They want tax prep, tax planning, bookkeeping, payroll, or other advisory services (or all of the above). But you get so busy that you don’t have time to talk to them. Of course, time gets away from you and you realize a couple of weeks (or more) has gone by. Most people write that off that it is too late to contact them now. But why? If you find yourself in that situation, have you or someone in your office call them back to see if they hired someone. You may be surprised that no one has called them back. Worst case scenario, they tell you they already found someone, you wish them well and move on. But what if they haven’t found someone yet? I have had this happen many times. One time we contacted the person back and said they called a few people and no one called them back. After talking with them, it turns out they had a few back tax returns to prepare and setup an installment agreement for them. This generated almost $4,000 to my firm, just by returning a phone call (two weeks late at that). This was all because I picked up the phone and returned the call about two weeks after they initially called. Obviously, don’t wait two weeks, but do know that if time has gotten away from you, then it is not necessarily too late. Pick up the phone and call now! You never know what you may find out! All the best, |
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Big Mistakes Tax Pros Make – Giving out your personal phone number…
Big Mistakes Tax Pros Make – Giving out your personal phone number… Back when I first started my tax practice (two decades ago after working for other CPA firms for 16 years), I, like most tax pros, was looking to save a buck. One of those things I did was use my cell phone as the office phone number while I worked from home. After two years, I decided to get an office phone and phone number. I used a VOIP phone service (Voice Over Internet Protocol). But I still kept giving my cell phone number out to clients as it appeared to give value. Then in year three, I met a coach/mentor, that was also a CPA with a tax practice, who told me to stop giving out my cell phone number to clients. He then explained to me that there is no reason that anyone (outside my wife and family) that needs to reach me at any time of the day or night. There are absolutely NO financial emergencies that need me to answer a question at any time of the day. It made sense to me, so from that day on, I changed my business cards, removed my cell phone number from the website and any other marketing materials. I have not given it out my cell phone number since. Since then, I have not had one client or prospect ask me for my cell phone number or get upset that they cannot reach me at 7pm or 7am. Although in those early days, I did have a few clients call me at both of those times. I love my clients, but that is my time. I take long walks with my wife and the dogs. I coach my daughter in her U12 girls soccer team, and I use this time to read or do projects around the house. Obviously, it is your practice and you get to do what you want to, but I suggest you seriously think about no longer giving your cell phone number out. Get a FREE Google voice number and forward it to your cell phone. Learn to take back YOUR time. One other thought, if you still do use your cell phone for business and clients call you after hours, do NOT answer it after hours (although I can make the argument to not answer it ever). Otherwise, you are training them that if they call |