Discussion:TAX BUSINESS

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KERMIT (talk|edits) said:

31 March 2007
I HAVE A SMALL IN THE HOME TAX BUSINESS, AROUND 200 CLIENTS, I HAVE BEEN IN THE TAX BUSINESS FOR 30 YRS. MY QUESTION IS IF I SELL THE BUSINESS I KNOW LESS THAN 10% WOULD STAY WITH THE NEW OWNER. YOU SAY HOW DO I KNOW ONLY 10% WOULD STAY BECAUSE MY CLIENTS ARE SCATTER OVER MANY STATES. SO IS IT BETTER JUST TO CLOSE SHOP AND FORGET ABOUT SELLING?

Bottom Line (talk|edits) said:

31 March 2007
I would never walk from the potential of money just because you "know" the clients would leave. Have you asked them? How did you get these clients? Since they're scattered over many states, I would believe that there are many you have never met. I assume these are "mail-in" returns. I suggest you speak with a business broker - preferably one that specializes in accounting practices. A lot may depend upon how the buyer words the purchase letter and the time of year that the practice is purchased. If you sell in May, the buyer has to go eight months before the busy season and the clients have time to find another preparer. If you sell in December or January, the buyer makes money immediately and the clients have less time to find another preparer. Frequently the seller stays on board for a period of time to ease the transition.

Deback (talk|edits) said:

March 31, 2007
I agree with BL. You should try to sell your business.

A tax preparer friend of mine who moved to Florida from Michigan and then retired at the end of the 2003 tax season referred her remaining clients to me (about 15 that I know of). About 10 or 11 of them are still having me do their taxes. Two or three never showed up. Two only had me do their taxes for 2004 and didn't come back.

One of those had just retired and started collecting SS and ended up having to pay tax on 85% of their SS. They were not happy with me and didn't come back. I don't miss them at all.

The other didn't believe me when I told him that deferred comp was taxable on the State of MI return. My tax preparer friend had been doing it wrong for years. I even amended his 2003 State return, but I doubt that he sent it in. I don't miss him, either.

CrowJD (talk|edits) said:

31 March 2007
Kermit, you might be able to get a buyer perhaps in the fall of 2007. Before tax time, you could write all your clients a letter, telling them that you are phasing out of the business, that you've sold it to X, and you will be working as a consultant to X for 2007 returns. DON'T FORGET THE POWER OF INERTIA. A lot of clients don't like change. If they get a letter from you introducing the new person, and perhaps a tax questionaire, I do believe a lot may stay with the new person. I would not use a business broker!

CrowJD (talk|edits) said:

31 March 2007
FYI, the National Association of Tax Professionals, www.natptax.org I think it is, has a classifieds section on its webpage where people sell practices. It would probably be well worth joining to be able to post a classified ad, and a whole lot cheaper than a business broker.

Eastendcpa (talk|edits) said:

31 March 2007
sell! Sell! Sell!

Corptaxhelp (talk|edits) said:

April 2, 2007
A wise man once told me 10% of something is better than 100% of nothing.

Victor1530 (talk|edits) said:

2 April 2007
Recieved my Journal of Accountancy in the mail saturday, very informative article on CPA practices, I know there are Professionals on this board. But the article basically said it was a sellers market. [[1]] The author says the average Firm is $300,000 to $400,000. So if it is a sellers market ...must be something to create the desire to buy, must be a profitable.

Victor1530 (talk|edits) said:

2 April 2007
http://www.aicpa.org/pubs/jofa/apr2007/ezell.htm

Thot I had the link in there. Trying it again.

Wwtaxes (talk|edits) said:

2 April 2007
We bought a local firm last year, and many of the clients stayed. What is perhaps more pertinent to you, is that the mail-in clients stayed at a higher rate (if they have to mail in anyway, why not to someone new). We lost more that didn't want to travel across town (we're about 15-20 miles away from the other firm) than we did mail-in clients.

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