Making room for better tax clients

We all want better clients.
And by “better”, I mean better quality…better mix of service usage…better timeliness…better paying.
In order to make room in your practice for better clients — without expanding your overhead — you have to trim the fat.
Remember those cheapskate clients I wrote about last week?
Once you fire the worst of the lot, you can fill their spots with better clients, and life will be better. I personally think that the cheapskate customers should be the absolute first to go, because they cause the most irritation. They’re the ones you lay in bed at night fuming over, so they need to go, and go now.
If they complain about your fees, fire them.
If they call or email you incessantly asking for free advice, fire them.
If they are actively blocking your efforts to resolve their IRS debt, then fire them.
Here’s an even bigger Practice Pro Tip (PPT, hmm, I should make that a thing): When you fire crappy clients, announce it to your leads, prospects, and clients.
You already know that you should have a CRM system of some sort, and you already know that you should be frequently communicating (at least bi-weekly, bare minimum) with your unconverted leads, best prospects, and paying clients. This is all part of your client engagement process, and long-term lead and prospect follow up processes.
But what you may not have ever given thought to is that, along with your client success stories, you also need to write about your bad client stories. Write emails, newsletter articles, film YouTube videos, etc. discussing those bad actors. Don’t name names, obviously, but use those firings. Here’s what this does:
1). By providing concrete illustration of the kind of clients you don’t want, you will help to filter out those leads and prospects that might ultimately engage in similar behavior. They will unsubscribe from your emails, unfollow you on social media, etc.
2). You will be signaling to your unconverted leads that you have time for new clients. You can make specific, targeted offers for folks to schedule consults now that you have all this free time available
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How NOT to solve your staffing problem

Another business lesson from that hotel in Utah…

Yesterday, I mentioned the unnecessary discount. That discount was on top of a ridiculously low rate to begin with.

How low?

I paid about $60, including tax, to stay in a brand new hotel during the peak of tourist season.

Now here’s the interesting part: The hotel bistro was closed because the cooks and waitstaff were turning rooms.

Think about that. A profit center for the business was closed because they hotel was understaffed in the housekeeping department.

Why is the housekeeping department understaffed?

The manager told me it was because they weren’t able to find any people, and that students going back to school were draining their labor pool.

If he had been a consulting client, I would have told him that he didn’t have a staffing problem, he had a revenue problem.

The hotel was charging half the local going room for a night, on the misguided notion that it would bring in guests. But when you’re cutting revenue to the bone, you don’t have the money to maintain the most essential functions of the business.

If they were at least charging normal room rates, they would have the money to incentivize hiring. They could pay new hire bonuses, offer a higher hourly wage, provide some benefits.

Instead, they find themselves cannibalizing one profit center of the business just to support core functions of the business.

Asinine. Absolutely asinine.

I predict that within a year the major hotel brand that this location is part of will revoke their franchise license.

Key take away for you: Charging adequate fees is what gives you the money to hire quality staff, pay for the marketing that brings you better clients, and provide you the lifestyle to which you would like to become accustomed. If you set your fees too low, that’s YOUR fault, nobody else’s.

So if you know your fees are low, drop EVERYTHING else and FIX IT. This is priority #1 in *any* business.

For more practice management tips, become a Gold member today: reading

The one cliche I insist you embrace

“Riches in niches.”

It’s a cliche, because it’s true.

If you’re sick and tired of hearing me wax poetic about niching for the past two weeks, GOOD. That means you’re listening. 🙂

Look, you can ignore it all you want. But it’s true. If you want to make more money, you need to niche.

When I grew a tax resolution firm as an employee, it was already niched — tax resolution only. We then niched a step further, focusing heavily on construction trades. That’s when things really took off.

When I went into private practice, things were just sorta OK until I stumbled into the trucking niche. Then, it took off like a rocket.

Moss Adams, the largest accounting and consulting firm headquartered in the western United States, and the 15th largest accounting firm in the country, is heavily niched within the real estate development and telecommunications industries.

When you niche, it makes everything in your practice easier. Way, way easier.

How does it make things easier?

And how exactly do you select your niche?

For that, you’ll need to read the August issue of “The Profitable Accountant”. And TODAY is your last chance to subscribe before it goes to the printer, because I’m sending it off first thing tomorrow morning. In this issue, you’ll find:

-the mindset shift you need to make in order to niche
-examples of successful tax resolution niches
-how to leverage your past work experience, hobbies, and connections to help you choose a niche
-how to utilize case studies and surveys for business research
-a 3-page exercise to develop your perfect client Avatar

“But wait, there’s more!”

Yes, there’s more. But to get it, you need to become a Gold member TODAY. No more excuses. Click on over to: reading