Tax Firm Pricing Tip– Raise 'Em

“The greatest pleasure in life is doing what people say you cannot do.”
– Walter Bagehot
Many tax professionals “pay the price” in a wide variety of areas in their tax businesses.
Some talk about systems, but never put any structures in place, so that if they were admitted to the hospital for three weeks in the middle of tax season, their business would be in deep weeds as a result. Others “pay the price” with poor management of their employees.  The tax business owner KNOWS a particular employee or tax preparer must be fired or asked not to come back next year because they cause so many office problems, but the owner “holds on” and hopes for the best out of fear.  I’ve also seen several of my long time clients get handed boat loads of promotional material only to let it sit on the shelf and continue to do the same ol’ ads, growing their tax offices at a snail’s pace.  Lack of action (in all of these areas — systems, management, marketing) will come back to bite you and you WILL pay the price one way or another.
But one of the easiest ways I’ve seen tax professionals take a big step forward and begin to solve some of their major problems in their businesses is to simply (and strategically) raise the price of their fees across the board to dramatically increase their dollar-per-return numbers. More revenue at the end of the day (or more importantly–the end of tax season) opens up and gives you more options you just do not have when fewer dollars are coming into your bank account.
Oh, and when I say easy … I mean EASY. How hard is it to go into your tax software and change a few numbers (at least) on all of your main, most common forms & schedules?  Not hard at all.  So how come more tax business owners don’t raise their prices?  Don’t they want to make more money?
No, I’d say just about every tax professional wants a pay increase, the bigger issue is that four letter word, FEAR. Fear of how their clients might react. Or more specifically, fear of the possibility their older clients would get upset and not come back, plus not selling any new clients because they might think their fees are too high.
I’ll get even more specific with you:  Most tax professionals fear raising their fees will actually “cost” them profit in the end.  Deep down, they intellectually buy what I’ve been telling them for years, but in their heart they are having a hard time pulling the trigger. Why?  Well, if you really want me to psycho-analyze it–the truth is that most people walk through life with a poor self-image.  The “I don’t deserve it” or “I’m not good enough” refrain subtly haunts those who believe these lies.
They aren’t going to freely admit it at first, but over time, if they are honest with themselves, they can break free from this particular bondage in their business.
For some of you, privately, what I just said might be the wake up call you needed to make some changes in your life and your business.  Don’t let this opportunity go to waste.