I’ve spoken to hundreds of small-firm accountants and tax professionals across America who share a common pain point: It’s difficult to maintain profitable relationships with microbusinesses.
These are the organizations that often bring in less than $500K in revenue with up to two full-time employees and a handful of contractors. They come in once a year requesting tax and compliance services, but don’t know exactly what that means, and can’t provide the financial documents that you need to deliver on that. The time you spend cleaning up DIY mistakes, building financial documents, and explaining why you need to do that often eclipses the time required to perform the services originally sold.
Still, there are millions of microbusinesses in America that need your services just as badly as larger firms. If you can figure out how to provide high-value services that fit their needs, it can be both profitable and rewarding.
Partner with technology
These clients are generally working within a shoestring budget. Micro businesses typically can't afford to hire someone else to do everything, but they still need to send and receive invoices, pay employees, track expenses, and file their taxes. How can you save them money while still making money yourself?
Instead of compromising on rates and services, you can augment your firm’s capacity by guiding your client to adopt a toolkit of solutions that are built specifically to service microbusinesses.
Tools like Gusto (HR and payroll), FreshBooks (invoicing) and TaxJar (sales tax) are great examples that can help introduce consistency across your clients' accounts.
The bookkeeping function ties everything together and is usually one of the harder problems to solve. DIY doesn't work because it’s too technical and repetitive for business owners to do well. Working with your clients to set up these solutions can become part of the services you offer as their advisor. You’ll save these clients a lot of time and grief, while paving the way for far more productive tax season engagements.
Be hired as the shepherd, not the sheep dog
When your clients don’t have their operations in order, it’s easy to end up running around in circles trying to piece together the financial puzzle. Instead, this approach lets you set the standard, eliminating the chaos that comes from having a number of small accounts with inconsistent quality.
It’s about shifting your engagements from troubleshooting and administrative work back toward your core services. In doing so, you’ll be able to take on more microbusiness clients with a dedicated focus on delivering higher-value tax and compliance services, such as helping clients choose the right entity structure and helping them make the most out of tax considerations.
Turning this into a profitable model will depend on having clients that are prepared to follow your suggestions. With tax season out of the way, right now is the best time to begin introducing clients to this model and helping them see just how much stress and time it could save them next time around. For existing clients, it’s a good time to shine a light on a better way to prepare for the next quarter, and the coming year.
Inevitably, some clients will scoff at upfront costs and default to DIY solutions, perpetuating the same tax-time tornado in the following year. If you don’t want to dilute your value, you’ll need to be prepared to say no to those clients who are taking over your workload. Over time, you’ll develop a portfolio of well-run clients that depend on you, but don’t monopolize your time.
