Discussion:My new client pitch plan

He is currently a sole proprietor and wants to incorporate. His wife has a finance degree and she plans to do most of the bookkeeping. The need someone to do their taxes and possibly help them with the incorporation. I will assume--at this point--that they will file their quarterlies. They have no employees.

There is still much that I don't know but here is what my proposal will be:

1-Accounting start up plan (business consultation, create chart of accounts, establish proper beginning capitalization entries, establish accounting method, map the chart of accounts to quickbooks tax accounts, fixed asset/depreciation review, etc.). I will charge $150 for this service (mainly to recoup some of the time I spend preparing their analysis of the incorporation options).

2-Incorporation management. Basically, I will do everything for them through to the LLC formation. I will charge $300 for this which includes the State filing fees of $125, leaving me a fee of $175. If they do not want me to handle the incorporation for them, I will try to convince them to let me do the reasearch on an hourly basis to show them which form of incorporation is best for them and provide an executive summary of my findings. I can bill two hours at $45 per hour and hand them the analysis I already have prepared.

3-2007 Accounting button up services. More or less review what they have for year end, prepare closing entries for depreciation, etc. Since they will be cash basis, there really will not be much to do. As an incentive, if they let me do the incorporation and the start up plan, I will waive this $100 fee. This really just benefits me for their tax preparation.

4-2006 Income tax preparation. 1040, 1040 schedules A and C, 1040 schedule SE, Georgia 500 return, and electronic filing of both returns. I am looking at a cost of $350 for this, including the e-filing fees.

I am trying to keep my costs reasonable, but I have done a LOT of research--some for my personal benefit to get me up to speed--to figure out what this client needs.

How is my pricing...too high, too low?

Thanks, Michael

I need to maintain a fairly high priced billable hours because I don't have a lot of extra time to do low-priced work. I don't care that some can't afford me as long as others can. Bottom fishing isn't necessarily what I want to do but being rediculous isn't either.

I was more or less looking for some feedback as to pricing and whether my offerings sounded reasonable given your experience when dealing with clients. To me, these prices and services sound great but if it can't be supported by the marketplace, then all is for naught.

Thanks, Michael

I found some information on line that shows a non-itemized 1040 average in America is $108 and an itemized average of $208. You would then add schedules and State return to that. I am thinking that $350 for Fed, State, and efiling is about right.

As for the 60 hours, that includes drive time and I am only doing this business to keep my wife at home with the kids. If it grows, I might use the proceeds to send the kids to private school when they hit middle school.

Michael

Good luck!

I wouldn't want to soil my reputation by being confused for an attorney! :D

JUST KIDDING if there are any attorneys aboard. I will limit my advice to the tax ramifications and make sure that I don't misstep.

Michael

As an FYI, just because the wife has a degree in Finance, doesn't mean she knows anything about bookkeeping. She may, just don't make any assumptions here. I have a couple of clients with their MBA and they're as dumb as a post when it comes to basic bookkeeping. My major was finance and I wouldn't know anything about bookkeeping if my minor hadn't been in Accounting.

There might have been a LITTLE puffery in that...mainly to induce them to let me do one and two. ;-)

Oh I understand! The owner indicated the degree and that his was was going to do the books. I am hoping that, if they have small volume, I can do it all. I might do some convincing.

All this may be naught, he hasn't called back. Discouraging.

Michael