Position Your Tax Practice for Growth with a Strategic Business Plan
IMGCAP(1)]Independent tax preparation businesses face challenges of fierce competition and seasonality, according to Chuck McCabe, president of Peoples Income Tax and The Income Tax School.
“We know the tax business and how to operate profitably as we’ve always done,” he noted. “But we are now faced with unprecedented threats posed by legislation and technology. These new trends will radically change the way we’ve always done business.”
McCabe sees a business plan as vital to the tax preparation business trying to cope with these challenges.
“Strategic business planning has always been a good idea for every entrepreneur,” he said. “However, for tax practitioners, planning is no longer optional—it is a necessity to prepare for the radical changes we face in the years ahead.”
Why should an entrepreneur spend hours to develop a written strategic plan when they already have a vision for the company and the plan is in their head?
“A good reason is to ensure that someone else can pick up the ball and run with it if something happens to you,” McCabe observed. “But even with you in the picture, you should develop a written strategic business plan.”
He gave the following reasons:
• The discipline of putting your plan into writing will force you to think through every aspect of the business, enabling you to identify and clarify obstacles and opportunities, determine areas in which you need professional help, set goals, and refine strategies and tactics.
• Communicating your vision to your associates is essential for them to make meaningful contributions to the business.
• Few lenders or investors will give you money unless you have a comprehensive written business plan.
“The business of tax preparation, like any other business, must continue to grow or begin to atrophy and eventually die,” McCabe noted. “In today’s ever-changing business environment, a long-range strategic plan is essential to ensure continuing growth and survival.”
“You should start by designing an outline to fit the needs of your company, then research and write the plan section by section,” McCabe advised. “You cannot delegate this project—as the CEO, you must be actively involved in the process.”
Yet, you need objective input from others who are not as close to the business as you are. One such resource for such input might be your local college or university, he advised. “Most business schools encourage their faculty to have students work on real-world business projects,” he said. “This is a win-win scenario for the students, the companies, the college and the community. The key to a successful project is the knowledge, dedication and teaching skill of the professor.”
Although developing a strategic business plan is no small task, it is a project that is well worth the effort, McCabe indicated. “If properly implemented, a strategic plan can help to ensure your long-term survival and prosperity. As with any major project, planning is not so ominous when broken down into smaller tasks that can be completed one step at a time,” he said.
And now—during the relatively quiet period leading up to the beginning of next filing season—is probably the best time to do it.