Many entrepreneurs get their start in the tax preparation business by working out of their home and/or offering mobile or drop off tax services. While this is a very affordable way to get your foot in the door of an appealing industry, many business owners that opt for this home business option have a tough time trying to grow their tax practice to the next level.
It is difficult to get over the 100 return mark when you are working out of your home. It commonly presents barriers to acquiring new clients, simply due to the stigma of non-professionalism that is perceived when you do not have a store front or office space for your business. While a 100 client home business is nothing to scoff at, it can be frustrating when your business plateaus and you are searching for answers to grow your tax practice once again.
Several affordable options to consider are:
• Temporary retail and storefront lease options
• Co-op Office Share Leases
• Use Complimentary Businesses’ lobby space
When searching out retail or storefront leasing options, it is important to keep in mind that commercial real estate is in a difficult time. With the sluggish economy, they have been one of the industries toughest hit. You should consider approaching them for the availability of a short term lease of your desired space. You see these types of lease done by Halloween costume stores, and political campaign offices. They, just as you, do not need their storefront available to customers year-round. You might have to pay a little bit more than they typical price per square foot, but you are not tied into a multiple year contract and you do not have a rent payment due in July when you have zero cash flow. The negative of this temporary lease option is that if your business does a significant number of returns you will find that your competitors will want to acquire your spot and you might find that it is no longer available come next December. If you find that your new store front provides a significant boost in business, you should compose a return on investment analysis and determine if it makes sense to lock that location down for a longer period.
Coop office shares are becoming more and more popular in recent years. These office buildings often offer a number of individual offices under one roof where they rent out specific spaces to individuals. These offices typically come with access to community printers, copiers, faxes, wifi internet, conference room facilities, and other business related tools. Generally utilities are included in your monthly rent and lease periods are not unreasonably long. The amenities and services available typically vary in relation to monthly rental fees. Be sure to do your homework if considering one of these facilities for your next big move for your home based tax business as there are typically many different options at a variety of price points.
Utilizing a complementary business is growing in popularity among home based tax preparers looking to increase their exposure and foot traffic. To make an educated decision on what type of industry and which businesses you need to approach for potential synergies, you need to look at this as a mutually beneficial partnership. You should attempt to have similar target markets as the businesses you are approaching. A good example of this is for a tax preparer whose clients typically request rapid refund services; a check cashing facility would be share in the benefit of having you preparer and issue tax refund checks in their lobbies. You would benefit from being in front of more clients within your demographic target market, and they would benefit because you would be producing more tax checks for them to likely cash from within their existing customer base. Be aware when approaching this option that many businesses, especially those in the financial service industry, are very wary of outside security threats, so be willing to provide your own internet connection and phone line if necessary. Other common complementary businesses are insurance offices, payday loan stores, and local community centers.
For a more comprehensive breakdown of how to take your home based tax business to the next level feel free to contact us for more info.
We provide any home based tax preparer a free target market analysis of their target zip code. It’s completely free for the asking!