Pronto Tax Class Blog
Well-Paid Tax Preparers Keys to Success
We speak in our "how much money tax preparers make" article about how most first year tax preparers make about $10 per hour, and this is true no matter if you work at the fanciest CPA firm or a mainstream tax prep chain. But there is a select group that can make $15-$20 per hour. Here is a video excerpted from Pronto Tax Class that gives you a few keys to success to making more money as a tax preparer:
We would especially encourage new tax preparers who want to earn the maximum amount in their early tax seasons to follow advice number one and that is to find a niche, don't try to be "all things to all people."
But what niche should you pursue, and how do you know if a niche is worth pursuing?
Here are a few things to consider as you're seeking out a niche full of potential tax clients:
1. The Numbers. You won't want to choose a niche without looking at the numbers of people involved. No, you don't have to do everyone's taxes to make money as a tax preparer, but all things being equal, the more potential clients a niche has, the more appealing it is. You can find demographic and income information on the Internet, such as the U.S. Census website. These census statistics can give you a realistic idea of how many people live in the community you're targeting, what the ethnic make-up is, and how many people in each household. This is all valuable information that can help you decide if a niche you're thinking of is "deep" enough--or perhaps you may get a whole new idea for a niche once you look at the Census data.
2. The Structure of Your Business. The structure of your business has everything to do with what income level clients you should pursue and make a niche of, how you should set up your pricing, whether you should offer year-round or only seasonal services, etc. If you have a retail operation, for example, and you are going for middle and working class people, you may have to charge lower fees and pay more rent than someone working out of their home who may only need 25-50 corporate clients to make good money each tax season. Low volume practices can be problematic, too, though, because the loss of a few important clients can really put a damper on your earnings. With a volume-focused tax business, you are more "diversified" in a sense. There are niches at every income level, but you have to make sure that the structure of your business, especially with regard to cost, is aligned with the niche that you are choosing in terms of income level. In other words, make sure that your prices are in line with the prices you're paying for rent, tax software, and other tax business costs.
3. Can You Get to the Niche? As any salesperson can tell you, getting access to a prospect is often half the sales battle. This is true of the tax business, too. If you want to work a niche, you better have enough access to that niche to really get your message out. And note we aren't talking about advertising here, that's too expensive and won't penetrate a niche like word of mouth, one person telling one person and that person telling another person and then suddenly you have 100 tax clients. If you are already someone who actively participates in your community, at church, at your kids' school, or whatever it is, you have the opportunity to let the words that come out of your mouth about your tax consulting and preparation experience, and this can help you grow your business. You need pools of clients, not just one or two.
You'll only be able to access those pools if you're getting out there and diving in!