Chapter 7

Ultimate Guide for New Tax Preparers

How to Start a Tax Business

Chapter 1

How to Start a Tax Business

The Fundamentals for Tax Preparers

Chapter 2

The Fundamentals for Tax Preparers

How to Setup Your Office

Chapter 3

How to Setup Your Office

Getting Your Office Tools

Chapter 4

Getting Your Office Tools

Outsourced Suppliers

Chapter 5

Outsourced Suppliers

Investing In Your Own Office Space

Chapter 6

Investing In Your Own Office Space

Acquiring Your Clients

Chapter 7

Acquiring Your Clients

Tips for New Tax Preparers

Chapter 8

Tips for New Tax Preparers

Chapter 7: Acquiring Your Clients

After setting up your office, it’s time to work on a business strategy to get clients. As a new tax preparer, you need to establish trust with your peers and potential clients. Apart from that, you need to build a good reputation when it comes to providing services.

The big question is, how do you start acquiring clients?

Acquiring Your Clients

Market Your Business

Before talking to any potential clients, you must have developed marketing tools that are ready to use.

Most tax forms are available to download on the IRS website. The IRS has detailed instructions for each one for easy reference. You can fill up forms using the Adobe Acrobat PDF Editor. Once ready, file the forms via the e-File application.

You may find that not all clients want to file their returns using the IRS e-File system. Clients who opt for paper filing their tax returns include those with concerns about the security of their financial data. Some clients may not be eligible for an e-filing option. In 2018, IRS still received 13,628,000 paper tax returns.

To handle paper filing,order available tax forms from the IRS for a limited quantity. Expect the forms to be mailed after ten business days. If you have regular clients who prefer paper filing, make sure to order forms as soon as you can. Tax forms for the calendar year filing are available for ordering as early as December 1 of the previous year. Paper filing is not as common as it used to be. You’ll want to allot additional time for preparing and mailing paper forms.

If you’ve exceeded the limit for ordering tax forms from the IRS, you may purchase IRS tax forms from Amazon and Staples.

TIP: Order red ink forms from the IRS, instead of printing these on your own. Red ink forms such as Form W-2 or 1099s are specialized. If your self-printed red ink form is rejected by the IRS scanner, you will be penalized.

Printing your own tax forms means that you are applying for substitute forms. The IRS must pre-approve how you print these forms. Printing mistakes could damage the IRS’s scanning machine and could cause delays. To get approval, you must submit an application for review via email.

Steps to applying for substitute forms approval:

Create Your Brand

Your brand defines the essence of your business. The Dictionary of Brand, written by Marty Neumeier, describes it as “a person’s perception of a product, service, experience, or organization.” He further elaborates on the definition in The Brand Gap: How to Bridge the Distance Between Business Strategy and Design. He explains, “a brand is a person’s gut feeling about a product, service, or organization.”

Establishing your business’ brand is essential when it comes to marketing it. It’s a communication tool from your company to your existing and potential clients about your products and services. It relays what customers should expect from your business.

Your business’ brand is more than your logo, store design, or even your product. It is a set of associations that people will identify with your business. Associations of quality, reliability, honesty, trustworthiness, friendliness, and so on. A brand can communicate a lot about your business and its commitments to values and ideals.

For a tax preparation business, what commitments should you highlight?

  • High Accuracy Rate
  • Commitment to Deadlines
  • Trustworthiness
  • Security and Privacy
  • Transparency and Reliability
  • Credibility (i.e., member or affiliate of organizations, certified by IRS)
  • Excellent customer service (i.e., businesses that will accommodate your questions even after the filing season is over)
  • Responsiveness to clients

Consider the descriptions above. Identify which ones you want to emphasize. Apart from that, reflect on what makes your business different from the others. Knowing what stands out about your business will give you an idea of what to highlight versus the competition.

Set a Targeted Audience

Knowing your market is crucial for when you do marketing for your new tax preparation business. If you know your target audience, you will be able to set the tone of your marketing strategies. For example, what type of marketing language or tactics you need for clients who are employed and filing their income tax? How about for clients who own small businesses?

Find out what clients value when it comes to tax preparation in your area. For example, they may value accuracy and reliability. They may also appreciate excellent and accessible communication about their taxes, given that most of them would not be experts. It’s better to focus your marketing to highlight your skills in helping your clients understand their taxes.

For corporations and big businesses, you may want to learn more about each businesses’ niche or specialization. This may take time. Very often, tax preparers who work with corporations choose to specialize in specific industries. For example, a tax preparation company may solely work on manufacturing companies, while another would specialize in restaurant businesses. If you have such a specialty, you’ll want to highlight your company’s expertise in that niche to attract the right target audience.

Be aware of what types of tax preparation services you’ll be offering your clients. Based on the type of tax returns in which you specialize, you can identify who your primary clientele would be.

Use a channel for engagement

Once you’ve identified your brand and narrowed down your target audience, you need to plan how you will communicate these things effectively.

Build an online presence

Just about every business needs a website. Even small tax offices. Consumers have adapted to the digital age. In 2019, 97% of consumers used online resources to find local businesses instead of printed directories.

Websites can bring awareness of your products and services to a wide range of clients. When someone needs your service, you can expect them to do a google search to find a service provider⁠—hopefully your tax office. A website is also an excellent tool for showcasing your products and services. And it provides an easy means for anyone to find and contact your office. That makes it the perfect channel for clients to contact you and book a consultation.

Build a stellar reputation using your online profile to attract new customers. Get existing clients to share testimonials and favorable reviews that you can post on the website. In a survey by Dimensional Research, 90% of respondents claimed that reading positive online reviews influenced their decision to purchase a product or service.

Search Engine Optimization (SEO) is an excellent means of enhancing your website’s online search ranking. By outsourcing web marketing services to experts, you can get into the top search results for businesses related to tax preparation.

Use traditional marketing tools

Online marketing is hardly the only approach you can take. Don’t dismiss traditional marketing tools! Classic marketing strategies still work, especially for businesses geared to services like tax preparation. Services that require a personal touch. Traditional methods can attract clients with the promise of establishing fruitful business-client relationships.

Business cards

Business cards remain crucial to marketing any business. Giving your business card to a potential client establishes both a personal and professional connection that you can build on. Distribute cards at networking events, conferences, parties, restaurants, laundromats, or even the gym. Anytime you meet a potential client; you can readily give your information and make a business connection.

Networking Events & Conferences

Attending conferences to meet people plays into any strategy for marketing your tax preparation business. Getting one-on-one time with potential clients makes a significant impact. They will be more likely to remember you when the time comes to look for a tax professional.

Important note: do not expect to market your tax preparation business in IRS conferences. Instead, attend conferences where you can meet people in your target market. Are you preparing tax returns for small businesses? Attend franchise expos or Chamber of Commerce meetings. And join the Chamber of Commerce’s after-hours events or breakfast meetings. Join local groups and get to know their other members, too.

Whenever possible, volunteer to be an event speaker. That gives you a great opportunity to showcase your expertise and attract interest to your business.


Invest in giveaway items to distribute at networking events or conferences related to your industry. These items can help you leave a lasting impression, so that your business comes to mind when tax season approaches.

Direct Mail

Send out a postcard to remind potential clients that tax season is coming. A potential client would appreciate the reminder and be likely to check out your business.

Develop promos and incentives

Whether you’re acquiring first clients or wanting to add new ones to your current roster, developing promos can drive interest in your company. Consumers show a lot of interest when they’re told that they can save money. Provide an incentive for clients who do early tax filing. If you offer bank products, try a limited-time offer discount.

However, when it comes to promos, do not limit yourself to tax-related items alone. Think outside the box. Dealing with taxes is often stressful; so why not raffle off a day at the spa for your clients?

Run promos and incentives to get your clients interested, and then deliver exceptional service to get them to stay.

Client Acquisition

Now that you’ve established the marketing tools that you’ll use, you can focus more on targeting potential clients.

First clients: Family and Friends

The first clients you should consider acquiring are your family and friends. Why? It’s because you have established trust and a good reputation with them before even seeking to offer them your services.

Building a tax preparation business is all about service. The biggest hurdle of acquiring clients is establishing trust. With your family and friends as clients, you won’t have that issue to worry about it. Instead, you can focus on providing excellent service, which wins you repeat business and even recommendations. By offering your services to friends and family, who will be more forgiving than strangers, you stand a better chance of learning the ropes and improving along the way.

That will help you refine your skills and processes so that you can provide higher quality services to future clients.

Another benefit of having your friends and family as your first clients is the feedback that they can give you. There won’t be any hesitation from them to share what was good and bad about your work. Such honest feedback is vital in learning how to improve your level of service.

Just how do you ask friends and family to be your clients? Explore your immediate circle of influence. Contact Church members, club members, school friends, and relatives. Reach out to them and share that you are starting your own tax prep business.

To people who are employed, you can offer to prepare their income tax returns. To anyone who has a business, you can offer to process their Tax Form 1040’s. If you already have a business and would want to expand it by adding a tax preparation service, reach out to your existing clients. You can also offer to prepare 1099s for their businesses, too.

How to convert your friends into clients?

New York Times reported that an average American knows about 600 people. Indeed, there’s no lack of people to whom you can market your business. However, it’s not the number of your connections but the quality that matters in marketing.

There are four types of people that we know: acquaintances, proximity friends, close friends and family or relatives. All of these make for potential clients. It’s important to understand how you can best approach them to convert them into paying clients.


Great opportunities for marketing arise every time you first make someone’s acquaintance. When people meet for the first time, they tend to exchange basic information about where they grew up or what work they do. Steer the conversation to talking about your business. You’ll be able to inform your new acquaintance of your services. Casually share the services you offer and establish your expertise during the conversation.

It can happen that a new acquaintance doesn’t wish to discuss business throughout the conversation, especially if your meeting occurs in a non-professional setting. In that case, you don’t want to force business talk on the other person. Read the room. Be a good listener. Get to know the other person first, and learn their wants and needs.

Let’s look at how you can make a conversation work as a marketing tool. When you’re asked about what you do, say, “I have a tax preparation business. You probably work with a tax preparer already.” When they answer yes, try asking about the person’s relationship with their current tax preparer. Draw out what they find lacking about their current preparer’s services. Identify whether you can fill in those gaps. Then bring up how you can provide those services.

Proximity Friends

Friends you know from work or your commute are generally categorized as proximity friends. These are the people to whom you say hello and chat with briefly on the train or in the supermarket. Since you do not have similar interests, how do you broach the subject of asking for their business?

A good way to introduce your business is by striking up a conversation about a general problem related to tax preparation. Identify any issues your friend might have with their existing provider. Commiserate with them and share the difficulties you’ve encountered in preparing your taxes. Emphasize how you found solutions that you’ve since applied in your business. Don’t forget to give your business card after your conversation!.

After that conversation, invite your friend out to lunch so you can further discuss how you can help them. This way, you can establish more rapport and build a deeper relationship with them… hopefully leading to a client relationship.

Close Friends

You’ll find it easy to have the tax prep conversation with a close friend. They know you well, they’re willing to give you the benefit of the doubt. A close friendship means you’ve developed mutual trust and connection over time. You’ll have shared interests and shared experiences. Opening up about your new business will be easy. But asking for their business remains a matter of good timing.

Share your concerns about your business while you’re still in the planning stages. Seek their advice on various small details. Later on, invite them to use your services. Let them know they’ll be helping you get your business off to a good start..

When you invite them, take care to emphasize your expertise in tax preparation. Tell them how much you’ve worked on learning the profession. Remind them of the times they’ve witnessed (first-hand) your diligence in providing a quality service.

Do be mindful of how you invite your close friends. Don’t pressure them into doing business with you. If they turn you down, ask them to contact you if ever they change their minds.

You’ll find it easy to have the tax prep conversation with a close friend. They know you well, they’re willing to give you the benefit of the doubt. A close friendship means you’ve developed mutual trust and connection over time. You’ll have shared interests and shared experiences. Opening up about your new business will be easy. But asking for their business remains a matter of good timing.

Share your concerns about your business while you’re still in the planning stages. Seek their advice on various small details. Later on, invite them to use your services. Let them know they’ll be helping you get your business off to a good start..

When you invite them, take care to emphasize your expertise in tax preparation. Tell them how much you’ve worked on learning the profession. Remind them of the times they’ve witnessed (first-hand) your diligence in providing a quality service.

Do be mindful of how you invite your close friends. Don’t pressure them into doing business with you. If they turn you down, ask them to contact you if ever they change their minds.

Family or Relatives

Don’t shy from asking family or relatives for their support! They should be very easy to approach. Offer to work on their income tax returns. If they cannot give you their business, then ask them to recommend you to their friends.

Once you’ve converted friends and families into clients, deliver the quality of service you’ve promised them. Don’t be complacent that since you already enjoy a good personal connection, you won’t need to treat them like a real customer. The key to building a good reputation is striving to do exceptional work for your clients, whoever they may be.

Referral from existing clients

After acquiring clients from within your immediate circle of influence, your next step is to win more business through referrals. Your current clients could vouch for your excellence as a tax pro. They can recommend you to their family and friends.

Your previous clients’ testimonies are valuable when marketing your services to potential clients. According to 2015 Nielsen study, 83% of online respondents from 60 countries prefer to get products and services that have been recommended by friends and family. Word-of-mouth marketing is still the most reliable type of marketing for consumers.

Another benefit of acquiring clients via referrals: cost-effectiveness. Your primary investment is providing excellent service to your previous clients, which is the core of what you do. By delivering impressive service, you can get them to start talking you up to others.

But of course, you also need to ask them to provide their referrals. Let’s take a look at some ways you can ask for referrals from your previous clients:

Directly ask

Once you’ve built a good working relationship with your clients, ask them if they could refer you to their friends and family. Better yet, ask them if they know anyone who needs your services. Ask them for referrals through email, phone calls, or in-person. You can even get creative by adding a note at the bottom of your invoices. That way, your clients can be reminded to share leads with you.

Thank your clients for previous referrals

If your clients have provided you with referrals, take the time to show your gratitude. Having a tax preparation business is more than just crunching the numbers, it’s about building relationships. Send a handwritten note or thank them in person. Clients will most likely continue giving referrals if they feel their efforts are appreciated.

Offer incentives

People love to receive a gift. Step up your thank you’s by giving gifts. Even if it’s a simple item like chocolates or a gift card, your client will appreciate it. Tell your client that you’ll provide an incentive for every good referral they give. Apart from wanting to recommend you to others because of your excellent service, they’ll also be motivated by the gift they’ll receive in return.

Create a referral program

Give your existing clients a chance to earn by setting up a referral program. It may be similar to offering incentives, but in this case, you can offer a percentage of a successful sale. You can also provide discounts on your services when a client’s referral uses your services, too.

Your clients will be motivated, not only to submit referrals but also to close the sale. They can help you by convincing their referrals to consider your company based on their excellent working relationship with you.

Indirect Referrals

If your clients do not have any referrals for you, ask them to for their testimonials. Ask them to share your website or leave an online review to spread the good word about your tax preparation business.

You can also ask your clients for permission to create a case study based on their transaction with you. Writing a case study shows readers how you would handle particular tax problems, which may be relevant to them. You can discuss this specific case study during conferences or write a blog article on your website. Assure your clients that you won’t reveal any personal information when you write it.

Marketing to Your Niche

Beyond your clients and their referrals, you can acquire clients by marketing to your niche. With either traditional and digital marketing, you’ll find multiple ways to reach new potential clients.

Networking with Professionals

Another way to market your tax preparation business is through networking with professionals. Reach out to industries that are related to tax preparation, such as insurance, real estate, and banking. Professionals within these industries know possible clients that could need your company’s services. Invite them to your referral program in exchange for getting an introduction to a key client or two.

Selling Your Expertise

With a tax preparation business, you want to show potential clients that you have the know-how to get the job done efficiently and effectively. You can achieve this with a combination of traditional and digital marketing.

Volunteering or participating in conventions as a speaker would be one way to demonstrate your know-how. You could discuss a taxpayer issue and explain how you would deal with it. If you cannot be a speaker, participate in the conference via sponsorship. Set up a booth and speak to attendees regarding your tax preparation business. Try to put up an “Ask Me About Taxes” booth, where convention goers can come up to you and ask for advice on tax-related questions.

Content marketing offers another angle for showcasing your expert knowledge. Write a blog article or record a podcast where you discuss tax topics. Find out what questions your potential clients want answered and offer your views on the topic in forums and blogs. Be sure to give your credentials as an expert. You can direct any readers and listeners to your website, where they can learn more about your tax preparation business. Connect through Facebook, Instagram, and Twitter. Use popular social media sites to share your knowledge and bolster your profile.

When tax season is approaching, reach out to local TV news stations or talk shows and pitch to them a segment on taxes. You might land a televised appearance by convincing a producer that people desire clarity on various tax questions and you are the person to provide such clarity.

You can also reach out to radio shows and local newspapers, in case they want to do a feature on you. Another option, if you can afford it, would be to invest in a paid spot on the TV segment, radio show, or newspaper where you are featured.

Every good marketing campaign involves the strategic application of marketing tools and strategies. Begin with an assessment of your chosen target market. Set your marketing goals and develop appropriate tools that will help you accomplish them. Some marketing campaigns might pay off immediately, while others will take time. Do research to determine what strategies you can implement within the budget you’ve allocated.

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