How to Build a Successful Tax Business

So you want to learn how to start a tax business? Not surprising, more and more new tax preparation businesses are popping up every single day. It’s a low-investment business you can start from your home.


The first thing you need to know about how to start a tax business, is ensuring you have standard operating procedures in place for your business. Your standard operating procedures is essential to building a successful tax firm. It ensures everyone is doing the right things at the right times. You can think of it as the, “If this happens, then what?” scenarios that occur in your business.

While everyone may want to do the right thing, often everyone’s version of that right thing slightly different, at times it’s difficult to get your ducks in a row. Which in turn means that how things are done are likely to vary according to who is doing that task. If the expectation at your organization is that everyone should follow the same rules, then you must make it clear what those rules are. The best way to do this is to document them.


This is where Standard operating procedures (SOPs) come in.


Standard operating procedures (SOPs) are step-by-step instructions that act as guidelines for employee work processes. Whether written up in numbered steps or formatted as flow charts, effective SOPs are complete, clearly written, and based on input from the workers who do the job. When employees follow the SOP for a particular job, they produce a product that is consistent and predictable.


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1) They Facilitate Communication


Well written SOPs clearly communicate responsibilities to employees. They don’t have to rely on their memories, or all the things they learned in their training when first hired. Having SOPs directly written can make onboarding new employees a breeze. And just think how relieved your tax preparers, assistants, and graphic designer will be when they know exactly what you expect them to do, and when.


2) They Provide Consistensy & Quality Control


So one thing that’s absolutely necessary when learning how to start a tax business is understanding the importance of consistency and quality control. Even when you hire contractors to help you run your tax business, you need to ensure that every client receives the same level of service. Last week we talked a little about the client journey and the importance of quality and consistent “touches”. SOPs help make all this possible.

SOPs ensure that you are creating a great experience for your client that no matter what day it is or who is working. You will rest assured that the tasks that keep your organization running effectively will be done the way you want them done. SOPs don’t hamstring employees or turn them into robots. Rather they provide security because each employee knows what’s expected of him or her, rather than guessing what needs to be done daily.


3) They Help Increase Productivity


People who have had clear communication about what’s expected of them are more productive and more likely to achieve peak performance. When your ready to learn how to start a tax business that will last generations, these are things you need to have in place.

You will see that SOPs keep you from working as hard on menial tasks and wear your CEO hat. If you happen to lose a contractor (it happens) you can easily replace them without spending a lot of time repeating yourself.  


4) They Facilitate Cross Training


Many organizations have “key players” who are the only employees who normally perform certain tasks. SOPs allow other employees to fill in and complete tasks they don’t normally perform if those key players are on vacation or out sick. And it means you can finally take that long vacation you’ve been wanting about fearing you will lose out on money or your business will die in the process. Let’s be honest, many of us want to learn how to start a tax business because we desire the money, freedom and versatility this career choice brings.


5) They’re Essential to the Employee Performance Evaluation Process


When was the last time you gave your staff members performance reviews? For many taxpreneurs the answer will be a never! This is an example of bad leadership and will cause your employees to stray to greener pastures.

How can you hold employees accountable for tasks and processes that aren’t documented? Without SOPs, job performance often becomes a matter of opinion. With SOPs, managers can clearly identify employee successes and communicate deficiencies during quarterly or annual performance reviews. When it comes time to discipline or terminate an employee, clearly defined tasks, as opposed to broad job descriptions, give managers the ability to justify their disciplinary or termination actions.


6) They Support Peer Accountability & Coaching


When SOPs are clearly documented, employees can help and coach each other when learning new processes, rather than relying on a manager to do so. They also give employees the opportunity (and grounds) to correct/redirect their peers when tasks aren’t being performed correctly. I don’t know about you but it would make my job as CEO a lot easier if everyone played a part in mentoring each other. Teamwork is key to building a successful tax business that attracts paying clients with ease!


7) They Help Create a Safer Work Environment


Clearly written SOPs, along with proper training, reduce the odds of accidents or injury because tasks are written. They may also reduce legal liability should an incident occur. Always be sure to document how employees should operate specific tasks and clearly list any dangers that may be associated with the task.


8) They Provide Staff With the Motivation to do Things RIGHT


Well written SOPs not only clearly outline the HOW of procedures, but also the WHY. When you communicate sound reasons why employees should perform tasks in a certain way, they’re more likely to do so. Think about your WHY. Why do you want to learn how to start a tax business. What are you expecting to gain? How will you feel once you have build a sustainable business that brings in predictable revenue year after year.


9) Protect Yourself from Knowledge Loss


If the details of your business processes are stored in a key employee’s head and not in a procedures manual, the loss of the employee can be disastrous. Documentation of job processes survives employee attrition due to retirement and resignation, and allow your company to carry on as usual. It’s hard to replace experienced, skilled workers, but comprehensive well-written SOPs ensure that your valuable business processes stay with your business.


10) Readiness for Future Growth


If your long-term goals include expanding your tax business to branch offices, ready-made SOPs make your proven work processes portable. New employees at new locations can uphold your reputation by using the SOPs to replicate the products and services provided at your original place of business. So if you really want to know how to start a tax business with multiple offices you should begin working on your SOPs right away.


Do you currently have SOPs in your business? What questions do you have about how to get started? If you have more questions about how to start a tax business be sure to check out our book: The Step-by-Step guide to starting a tax business.


We walk you through the process of documenting and systemizing your workflow and SOPs in the Taxpreneur Elite Mastermind.

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