Four Business Strategies to Help Grow Your Tax Business

While typical tax season may run only four to five months of the year, growing your tax business should be a year-round endeavor. Whether you’ve been in the tax business for a decade or are just launching a new business, retaining existing clients and attracting new ones is the key to building a sustainable tax preparation business. Here are four actionable strategies you can start employing now to build customer loyalty, gain referrals, and attract new clients.  

• Walk in your customers’ shoes

The first step to growing your tax business is understanding your clients and their needs. Do you have a typical client, or do you serve a specific niche market or two? If the latter, analyze what their biggest tax concerns are. Are your clients military personnel who typically need help figuring out when they qualify for tax-exempt status? Or do you work with small business owners who need to maximize deductions to reduce tax liability? If you have a typical customer, make sure you know their needs, and take time to identify where you might have service gaps, so you can quickly improve your offerings and capabilities and win repeat clients and referrals. 

• Make connections with your community 

Did you know 92% of people trust recommendations from friends and family more than advertising? And that 74% of people base their purchasing decisions on word of mouth? Digital marketing and social media campaigns will only take you so far. Get active in your community, and meet the prospective clients you want to serve in person. 

That means you should have your 30-second elevator pitch ready for any opportunity. If that nonprofit coordinator at your church is lamenting the upcoming tax season, step in and offer your services. Or if that small business owner at the next chamber of commerce event starts talking about the tax burdens on partnerships, offer some specific advice and then hand them your business card. 

Another way to win new business is to ask existing clients for referrals. You could even offer those customers a discount off your services for each new client they refer to you.

• Work with a niche tax audience

While it might seem counterintuitive to grow your business by narrowing your audience, just the opposite is true. Clients prefer specialists over generalists. So if you can become an expert in a few specific areas, like preparing tax returns for partnerships or for military personnel and veterans, then you can focus your efforts on learning the nuances of the tax code for those specific audiences.

Establishing a niche tax audience will also allow you to develop a stronger marketing strategy that speaks specifically to your target market’s needs. If your niche is partnerships, for example, then you can focus your email campaigns on small business owners or publish posts on LinkedIn about the ins and outs of preparing 1065s. 

Being an expert in a niche market could also give you access to clients outside your local area. If you specialize in preparing returns for veterans in the southeast, for instance, then you can appeal to a wider audience who may not have a tax preparer in their area who understands the special deductions and exemptions for veterans in their state. 

When you have specialized tax services, that also means you can command higher fees. Clients may be willing to  pay more for a tax preparer who understands their unique situation and has experience preparing returns for people just like them. 

Before you pursue a niche market,  it’s important to thoroughly research and understand the tax laws relevant to your target audience. Read relevant IRS publications and join social media groups in your niche to understand the tax concerns of your audience.  

• Create an authentic marketing plan that speaks to your audience 

Once you’ve identified your niche, the next task is acquiring new customers, so make sure to invest in marketing and promotion efforts, and tailor them to your audience:

• Build a website that promotes your services within your target market. If you want to focus your tax business on preparing returns for military personnel, then talk about your expertise in the deductions, tax credits, and tax exemptions available to members of the Armed Forces. 
• Create social media profiles for your firm, focusing on platforms where your target clients spend their time. For example, you’ll likely find partnership prospects active on LinkedIn, while military retirees may gravitate toward Facebook. Do your best to interact with your clients and prospects organically, not in a way that involves shameless self-promotion. Answer tax or business-related tax questions, and become a trusted resource for advice. 
• Conduct niche-specific email marketing campaigns. If military personnel are your audience, then send them monthly e-newsletters that provide tax tips on topics like tax exemptions available to those serving in combat zones or tax considerations for military families when they make a permanent change of station. 
• Ask existing clients within your niche market to refer their friends and colleagues. Once word gets out about your expertise at preparing partnership returns, for example, you could see a steady stream of new clients.

Ready to get started on a plan for growing your tax business? There are a wealth of resources for developing new marketing strategies and better targeting your niche customer and professional tax software to help accomplish your goals. No matter your long-term growth goals, whether it’s just bringing in a few more clients for your sole proprietorship or building a larger tax office with more tax preparers, knowing your specific clients’ needs, working to meet them, and then targeting your marketing to your ideal client base will pay off in new business growth and help you maintain your tax preparation business for the long-term.

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