[IMGCAP(1)] Before I partnered with my father in our current firm, I was introduced to the concept of return price minimum(RPM). In other words, potential client work was assessed to ensure a decent return on investmentan agreeable minimum. While I agree that this is smart business practice, RPM isnt always applicable, especially where there is a grander vision. That vision? Capturing a profitable, long-term client niche. Consider one of my personal experiences
While still at my former firm, a young medical resident (and friend) approached me about the FICA Tax Credit for medical professionals in residency. He had heard that other residents were filing amended returns to receive the credit and wondered if he was also eligible. Eager and enthusiastic to help, I researched the credit thoroughly. I verified that we could submit an amended return and Form 843, but made no guarantees that the credit would be approved.
Word spread and soon several medical residents were contacting me for help. I saw an opportunity! I approached the director of tax and explained the situation. I also explained my vision: that we could capture and mature these niche clients by filing the amended returns. It was a lucrative niche with the potential for long-term, high-grossing clientele. I was shot down. I was told it wasnt worth the firms time and effort.
I took the idea to my father, and he agreed to file the returns within his practice.You know where Im going with this, right? Even with no guarantee of receiving the FICA Tax Credit, the majority of the young doctors remained a client of my fathers firmwhere I am now a partner. And they are still clients todaytwelve long years. By supporting these clients with basic tax return support, we were able to capture and mature a profitable niche client base.
From this original group, some have gone into private practice and are among my small business clients. I had a vision and stuck with itwhich landed our firm a cadre of valuable and loyal clients (who by the way have long surpassed their return price minimum). And for the record, just last week I was notified that after years of being tied up in court, my medical clients received their FICA Tax Credit refunds twelve years later.
You get the main point. Its all about investing in the long-term client. But theres another lesson as well. Dont underestimate the visions of your younger staff. You never know when you might land your next big niche clients!
Jody L. Padar, CPA, MST, is a Certified Public Accountant experienced with Complex Federal & State Income Tax Compliance for Business & Individuals. Jody is an adjunct professor at Oakton Community College, where she teaches Taxation and QuickBooks Courses. She is part of Intuit Trainer Writer Network and speaks nationally on various Technologies and Taxation. Reach her at firstname.lastname@example.org.