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.

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