Transform your tax firm: 3 big mind shifts
Transform your tax firm: 3 big mind shifts Vertical

Transform your tax firm: 3 big mind shifts

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Accounting and tax firms have been consistently listed as one of the most profitable professions, but if you talk to a typical firm owner, you’ll find an overworked, underappreciated, and undervalued professional. It’s a combination where firm owners are asking themselves, is this worth it?

Most of the industry burnout comes from the types of clients, how firms charge for their services, and only focusing on tax compliance. The path forward involves positioning yourself as a valued advisor and a tax planning expert. It also requires a change of mindset and a determination to have a higher income, better clients, and a well-balanced life.

There are at least three big mindset shifts you’ll need to achieve to create a high-performance tax advisory firm.

Mindset shift #1: Lead with value in your marketing

One of my industry specialties is advertising agencies. In one case, I had a client who owned an agency and had already perfected the art of getting appointments for their clients. My own marketing focused on a newsletter campaign for client upsells and new prospects. Along the way, the agency owners would constantly provide feedback, most of which was negative because the newsletters did not apply to them. It forced me to change my approach to these newsletters.

The biggest feedback I received was to lead with value. Business owners are constantly bombarded with outside companies trying to capture their attention. If you want to capture their attention, you must find a way to stand out.

I began writing newsletters focusing on ways for small business owners to mitigate taxes. I researched tax planning strategies and put those in my campaigns, including income and expense shifting, business deductions, charitable contributions, entity structuring, and tax credits.

Result: By leading with value, the prospects quickly figured out they weren’t getting the same advice from their own accountant. New prospects began to line up to speak with a tax strategist who would save them money.

Mindset shift #2 – Always be searching for tax planning opportunities

Within any client list, there are dozens of opportunities for upsells to tax planning. We find these opportunities during tax season, quarterly tax reviews, and year-end planning sessions.

Recently, we had a client submit their information for tax prep. The client was filing a Form 1040 with a Schedule C that included more than $250,000 of self-employment income; the client was looking at a substantial tax bill.

Instead of preparing the tax return as is, we scheduled a consultation to discuss tax planning options. The consultation resulted in an opportunity for a late S Corporation election, accountable plan, and deduction review.

Result: We charged $9,500 in tax planning fees, but more importantly, the client now will save more than $40,000 a year in taxes. The client was thrilled with the result!

It’s easy to get stuck in the mindset of tax compliance and want to get the tax return out the door. Always search for opportunities so you can help clients and increase your fees.

Mindset shift #3 – Commit to charging significantly higher fees

The most difficult mindset change was to be willing to charge premium fees for tax planning. My initial tax practice focused on preparing 1040s for $200-$300 each, but my first tax plan was $3,500. It made me incredibly nervous to ask for that money, knowing it would only take a few hours of work. However, the client walked away with more than $100,000 in annual tax savings.

Result: Over time, my confidence grew. The tax planning prices went to $4,500 … to $6,500 … to $9,500. It’s not uncommon for a new tax planning client to pay $25,000+ for our services. The transition to ask for premium fees has taken me years to master. My mindset was the biggest hurdle to overcome.

Be patient with yourself during the process, but commit to premium fees! There are thousands of clients waiting and willing to pay these fees when you deliver value. It will have a profound impact on their financial lives and on yours.

Remember: You’re the one in charge

Making the transition from a low-fee tax compliance company to a high-performance tax advisory firm will bring new life into your professional career. The premium fees will give you opportunity to hire good employees, pay for new technologies, and be selective about which clients you want to work with.

You’ll discover premium clients who appreciate and value what you do. You’ll also find your income growing, more time to spend with family, and a well-balanced life. The transition to tax planning is worth it!

Eric Aragon, CPA

Eric Aragon, CPA, is president and founder of Aragon Accounting Corp. With a Big 4 experience, as well as holding key roles as a controller, Senior VP of finance, and divisional CFO at REVShare, Eric brings a wealth of experience to the tax industry. Eric specializes in guiding business owners and high net worth individuals to achieve substantial tax savings, ranging from 30% to 100%. Whether immersed in '90s grunge rock, spending a day at the beach, or relishing outdoor activities with his family, Eric's unique blend of objectivity and personality makes him a great leader, communicator, and trusted advisor. More from Eric Aragon, CPA

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