Even though its tax season, it is still very important that you consider ways that you can increase the value of your firm.
Fee Increases are Important
The number one way you can increase the value of your business is to increase your income. A little increase can go a long way. A 3 to 4% increase seems like a very small amount and it is hardly noticeable to your clients, but it compounds to you every year and over time.
If you consider a 3 to 4% increase over a 10-year period, it takes what was a $300 tax return and makes it a $400 to $420 tax return. The value of practices is primarily based on the gross income, so in this 10-year model you would increase the value of your practice by approximately 35%. Not a bad return on your investment.
Another way to look at this is based on a single year; a $300 tax return from last year now becomes $312 with a 4% increase. Not a lot of money. But let’s say you have 500 tax returns you just increased by $12. That becomes $6,000 in your pocket every year, now we are starting to talk real money, particularly since its going to go straight to the bottom line.
Look for New Clients when You are Busy
Another often overlooked area of increasing the value of your practice is client acquisition. CPAs are very busy during tax season and tend to focus their efforts on providing services to the clients they already have. A laudable goal.
But remember, the tax season is an ideal time of the year to reach out to new clients because it’s the one time a year that taxes are on people’s minds. Not everyone’s but the collective mind of the society. Consider all of the advertising that takes effect during tax season, whether it is advertising for H&R or Jackson Hewitt, or advertising for some tax resolution service on TV, radio, or the Internet. Advertising for tax services is at its peak during tax season.
That is when your prospects, your future clients’, think about taxes. Not during the summer when you are slow and have time to market to them. They are going to be much more responsive to your message now than at any other time of year.
Reaching out to them could take the form of a variety of different methods. It could be meeting them at the Chamber of Commerce. And who does not need a little break from the office to attend a chamber mixer. It could be doing a direct mail piece to small business clientele. It could be appointment setting telemarketing for small business clientele and taking that opportunity to try to meet with them.
I realize that during tax season you are all very busy but you would serve yourself well to spend a little bit of time and resources on marketing. Extend a few extra tax returns this year and spend just a few hours a week on marketing your services. It will help increase the value of your practice dramatically over the years and it will put more money in your pocket this year.