What’s *actually* important in your tax practice?

“Lately it occurs to me: What a long, strange trip it’s been.” –Robert Hunter, “Truckin'”

Going to Burning Man is like spending a week in an alternate universe. It’s an event that is almost indescribable to somebody that hasn’t been there, and it’s even more difficult to define exactly what it’s all about.

Having been to Burning Man before, I experienced this year’s festival through a slightly different lens. In fact, this year’s week in the desert turned into more of a business planning retreat than anything else.

Some readers from the accounting world may be familiar with the concept of an annual retreat. Traditional, this consists of several days each year wherein the partners of a CPA firm disappear into the wilderness together in order to evaluate the hits and misses of the previous year. This is usually conducted shortly after tax season.

Due to the cost of such retreats and the questioning of results obtained from them, this practice has seen dwindling popularity in recent years. I think this trend is a mistake — particularly when the annual retreat is properly applied.

DUring my week in the desert, I had zero access to the Internet. There was no temporary cell tower erected off-site this year, so nobody had cell service. It was 8 glorious days of absolute communication blackout.

When we disconnect ourselves from the constant ringing, beeping, and blinking of our modern digital universe, we can obtain a clarity of thinking that is simply impossible to achieve otherwise.

From this year’s Burning Man event, I don’t have any super-crazy tales to share. I even kept all my clothes on for the entire week (which my camping companions were very grateful for!). In fact, by the standards set by almost any other burner, this was a boring Burn. I didn’t imbibe to excess, and spent a significant amount of time actually in the RV. Defeats the purpose of going, some would say.

I’d say quite the opposite. By taking the opportunity to unplug and disconnect from the default world, I was able to make monumental leaps in my business life. I had the time to work ON my businesses, rather than just IN my businesses.

I was able to take the time to formulate my zero-to-hero marketing strategy for the new tax office in Washington. I was able to determine what I really want out of that tax office, and how it works … Continue reading

Setting Revenue Goals For Your Tax Practice

The most common answer to the question of “How much money do you want to make?” is “As much as possible.”

Anybody that is in private practice for themselves, either as a solo practitioner or with a small group of partners, has to take a serious look at this question, however.

Obviously, different revenue levels require vastly different levels of work, commitment, infrastructure, marketing, etc. The decision to make X dollars is not as simple of a decision as what you might think.

I believe in two approaches to this decision process. The first is to decide how much TIME you want to put into your practice, and make revenue and expenditure decisions from there. The other approach is to determine how much take-home income you want, and work backwards from there.

I personally make the decision more from a time standpoint. My lifestyle design objectives are somewhat unique, as I am willing to sacrifice significant financial gain in order to have extensive freedom to travel around the world. You may be more interested in earning a certain income to support a specific lifestyle.

If you want to make $500,000 per year in take home pay, then you are going to need a certain size organization, as it is unlikely you can achieve that income goal completely on your own. That size of organization is going to require infrastructure, employees, office space, etc. All these factors need to be taken into account.

If you want to work as a solo practitioner, and only work 40 hours per week, then this is going to create an income limit for you. You can increase this limit by focusing on niche clients, charging premium fees, performing high end services, and doing specific styles of marketing.

Keeping in mind the various challenges and limitations that come with having certain income goals is important. Keeping an open mind, and having realistic expectations about how much money you can make, and what it will require, is critical to your success as a firm.… Continue reading

Where do you really want your tax practice to be in ONE year?

Most tax professionals that I speak with aren’t really sure where they want there practice to be. They’re doing this thing that they do, week in and week out, but don’t really have a vision for where they want to take it.

Many motivational speakers will talk about having a 5-year plan for your life. They talk in terms of very long-term goals and planning. But I think on a much shorter scale, and there’s no reason not to. Amazing things can be accomplished in twelve months or less, particularly in a professional services business like tax or accounting. There’s absolutely no reason for us to look on a time horizon longer than a year, especially if you focus heavily on tax services, due to the natural annual cycle of most things in tax.

Have you given any thought to where you want to be a year from now? If not, this is the time to think about it. We’re in the lull between tax seasons, and it’s convention and seminar time, so practice management and planning are probably near the top of your mind right now. In fact, if you haven’t yet registered for one of my live workshops, I’d encourage you to do so. See the workshop schedule here.

It’s completely possible to take an accounting practice from one person and $60,000 per year in revenue to 10 people and $2 million in revenue in one year flat: It’s been done. If your ultimate goal for your practice is to grow to this level, then what are you waiting for?

If your goal is to never have employees and remain a solo practitioner, but want to double your revenue and live full time in a foreign country while serving your American clients, that’s been done, too. There’s nothing stopping you from doing it, and it’s very doable within just a few months.

Go for a walk and give serious consideration to what you want your practice to look like a year from now. If it’s growth, then there is a marketing solution. If it’s location independence, there’s a practice management solution. No matter what you want out of your practice, you can have it.

Remember, you created your business to serve you, not for it to be the master of your life.… Continue reading