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Keys to Growing a Successful Tax Preparation Practice


Tax preparation is a $14-billion-dollar industry and is growing every year. It’s no wonder that growth is a key part of the agenda for most CPAs. However, as demonstrated by the industry’s high burnout rate, simply adding more clients doesn’t lead to success. Sustainable, strategic growth is the desired result. To achieve it, consider these five key formula components.

1. Think about strategic branding

Tax preparation is becoming increasing commoditized. A simple Google search will bring up dozens of CPAs in your geographic area. When one tax preparer is much like the other, how do you set yourself apart?

Strategic branding is the answer. Consider your unique value proposition. What can you and your team do that other CPAs can’t?

You natural instinct may be to list your professional qualifications. Professional licenses are an important proof of capability, and you have worked hard to earn them. Unfortunately, they aren’t enough. To the prospects that lack your expertise, those abbreviations don’t mean much beyond the fact that you have studied for, and passed, a series of exams.

Explain your value in terms that matter to your target market. Perhaps you can speak their native language. Maybe you are proficient at explaining complex concepts in an easy-to-grasp way. Or perhaps you specialize in serving government employees. Remember that the distinction is only valuable if it is relevant to your audience.

2. Invest in marketing

Marketing can be a challenge for many CPAs. They often lack training and experience in that arena. Furthermore, marketing, prospecting, and selling require active outreach and ability to deal with rejection. Professionals of all kinds can develop those skills, but progress won’t happen without effort.

Start with functional basics. You need a marketing plan that supports your growth goals. There is a wide variety of ways to get the word out about your services. Some of those approaches are expensive, others are virtually free. Whether you choose billboard advertising, a social media campaign, or a structured referral generation program, be sure that it’s a good fit for your target audience. Get specific tasks on your calendar and build in accountability for getting them done. Remember that marketing works best when approached as a year-round sprinkler, not a once-a-year flood.

3. Insist on personal efficiency/productivity

Whether you are a solopreneur or have a large office with other partners and professional staff, productive use of your time is the key to practice growth. Track how you spend your days. Identify activities that, if done with discipline and persistence, would boost the growth of your practice over the next five years. Then, revise your to-do list to include those activities daily.

If you observe that more than half of your time is spent on putting out fires, dealing with administrative issues, or doing research, consider outsourcing and delegating more. Guard your time, as that is your most valuable (and most limited) resource.

4. Set clear boundaries

Many busy season nightmare stories come from not having set and enforced clear boundaries with clients and staff.

Boundary-setting has a reputation of being rigid and off-putting. No one wants to be the bad guy. It can be easy to relax your minimum-fee standard in the face of a pleading client. Remember that boundaries are there to protect you and your time to enable you to better serve your clients. Fee minimums and project spectrum limitations give you space in which to grow your practice.

Get clear on what you are no longer willing to tolerate or make exceptions for. Your list will be unique to you. Here are a few examples of boundaries that some tax preparers have found to be effective.

  • Not hiring clients who haggle over the quoted fee
  • Not doing the work until the first installment has been paid in full
  • Not accepting any new tax returns after March 15
  • Not allowing client visits to the home office
  • Not accepting work that is outside the specialty area of the firm

Any boundary you choose is only as good as your willingness to enforce it. Be prepared to defend it, firmly and graciously, every time.

5. Attract and retain quality staff

Your team shapes client experience and brand perception. In order to be successful, firms must attract exceptional staff members. Focus not only on their technical qualifications, but also their ability and willingness to deliver outstanding client service, go the extra mile, grow personally and professionally. Support them by keeping performance standards and job requirements clear, providing timely and actionable feedback, and compensating them fairly.

At the end of each busy season, take a hard look at your staff and ask yourself, “Would I hire this person again?” If the answer is “No,” consider having a remedial feedback conversation or hiring a replacement.

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.