It takes more than a thorough knowledge of tax law to build a successful tax business. In fact, some of the markers of success for your business will have little – if anything – to do with your knowledge of taxes. And, while every tax business is different, there are certain common threads that seem to run through those businesses which have been able to stick around.
Here are some of the common characteristics of a successful tax business:
- The owner of a successful tax business is self-fulfilled. Successful small businesses of any sort are typically run by someone who enjoys running the business. If you’re not loving what you do, you should think long and hard about whether or not you want to do it. This is especially true in the tax business, where the grueling day-to-day can be frustrating for someone who doesn’t love the work.
- Successful tax businesses keep current. Tax laws change every year. If your business is going to be successful, you have to know what those changes are and what kinds of implications they are going to have on your clients. Keeping current in your field is key if you want your business to succeed. That means reading industry periodicals, attending conferences or training opportunities, and doing everything you can to stay abreast of important changes.
- Successful tax businesses make their customers happy. Tax businesses are no different from other businesses in this regard. Customer service is one of the major benefits of working with a small business. You’ve got to provide stellar customer service if you want your clients to recommend you to their friends and family. This is still the most powerful form of marketing.
- Successful tax businesses have a long-term plan. You need to have some idea about where your business is headed. That means a couple of different things. First of all, it means having a business plan that will carry you through the next year. You need to know how you’re going to generate revenue when it’s not tax season, for example. You need to know how many clients you can take on at a time, and when you’re going to need additional help.
- Successful tax businesses utilize modern marketing methods. The days of depending on the Yellow Pages to funnel you a steady stream of business are long gone. Today’s tax businesses use modern marketing methods, including Internet marketing, social media, blogs, and more to get their business out there in front of potential clients. That doesn’t mean you can ignore traditional marketing methods, but it does mean you need to find new ways to reach your target audience.
- Successful tax businesses use all available tools. There is plenty of technology available to tax professionals today. These computer applications will give you ready access to customer data through their own accounting programs, which will make the tax process much easier and faster. Technology makes your tax business more efficient, allowing you to have a larger client base and be more profitable. That doesn’t mean investing in technology for technology’s sake, but it does mean using what’s available to you.
- Successful tax businesses manage their own cash flow. We hinted earlier at the problem of tax season, and how some tax businesses generate the bulk of their revenue for the year in a relatively short amount of time. That means you need to either find value-added services that you can provide to clients during the off season, or you need to find ways to spread the work out for your clients throughout the year. However you do it, you need to make sure you’re not going to have to shut your doors in August because it’s four more months until tax season.
If your tax business is going to be successful over the long haul, you’re going to need to cultivate these characteristics. In some cases, it’s a matter of developing the right business philosophy; for many of them, it means an ongoing commitment to your profession, to your clients, and to finding new and exciting ways to reach new clients.
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