The Time to Make Business Shifts Is Now

Before you know it, it will be time to wrap up extension returns.

Then once those are out the door, you will start gearing up for the next tax season.

I believe November is too late to consider significant shifts for the upcoming tax season. It would help if you began to lay the foundation for the tax practice you want this summer.

Conducting business is a two-way street: an engagement must be both a good deal for the client and a good deal for us. I see a lot of engagements in our enrolled agent community that are a great deal for the client (because the work is so cheap) but a terrible deal for the practitioner because they are not being paid anywhere near adequately for the services provided.

Please commit to stop undervaluing yourself going forward.

There is limited availability of good tax professionals. Many people I know are not accepting new clients because they are at capacity. When there is scarcity, that naturally leads to price increases.

Do not get me wrong–we should not increase prices significantly just because we can. We must follow through by creating greater value for the client or tell them about the value we already create for them without realizing it.

Change does not come all at once. If you can do these three things this summer, you will be on the right path for later this year:

1. Fire clients who are abusive or do not respect you or your staff. Do not simply raise their price. The damage they inflict on you and your team is not worth the fee, no matter how high. You deserve better.
2. Determine how much revenue you need to pay yourself for an ideal income and cover your overhead costs.
3. Determine the perfect practice size you want based on your staff size and all staff (including yourself) being able to work reasonable hours year round (and, no, 60 hours per week is not reasonable).

In my next column, I will discuss how I think you can leverage the above into pricing strategies for the next tax season.