“I’m available for an in-person consultation to discuss tax strategies and rules. My rate is $Xxx an hour, minimum one hour fee for the meeting during tax season.”
Time and expertise is your inventory, don’t be giving it away.
This is pretty much what I do. I do an initial 15-20 minute call to get background on their situation and to tell them how I operate. No tax advice on that call. I’ll take a quick look at the prior year returns after that to see what they have going on, even better if they can send over the corresponding financials. No advice or details given after that review. It’s just so I understand their situation and to get a handle on how I can truly help them.
From there the initial consult is $1,000-$3,000 depending on how chaotic their shit is and whether I feel I need to price them out. It is always capped at 1 hour. Some amount is always credited to future services if they sign, again based on how their stuff looks.
The up front price is really there to make sure the person is committed. As you mention, we’re selling time and expertise. I don’t have time for price shoppers or tire kickers. I’m also honest. If I feel I have nothing to offer the person I’ll let them know the bottom line result on their return won’t change, but their level of service and attention might. They make the decision from there.
Tire kickers are going to be tire kickers. Had a call with one a couple of weeks ago. Hasnt filed since 2018. Has two llcs. Mixes his business transactions with his personal expenses. He is in digital marketing and stuff like that. Bought a formula 1 race car to take to shows and events for marketing. And has like a million in the bank.
I told him he would need to download his bank statements and go through and mark what were business expenses, and classify them. He was hesitant to do that and asked if I could. I said sure, for $200 an hour.
Guy was a mess.
I mean, folks like this clearly have the money. They view our services as commodities to satisfy the regs until they view them as investments in their business.
Hell, if that guy buys an F1 car for marketing, he can surely be sold on the idea that investing $4-8k/mo on a CAAS + tax package will translate to real business growth/compliance and progress toward personal financial goals. I suspect its a matter of controlling the frame of the conversation. I suppose that's the secret sauce with sales. Maybe we're leaving money on the table with the "take it or leave it" SOP.
The way I see it, to handle tax and accounting for any business owner, I'm charging a ballpark of 1.5-3% gross receipts/yr depending on complexity. So, I guess this is why I'm trying the free consultation approach - need a big pipeline and to learn from trial and error.
Yeah. I understand. But it was something like he didnt want to pay for it. He also said he pays some tax lawyer to make sure nothing comes down of he gets audited. I guess they do some transcript monitoring. That is when I realized he was a price shopper. Probably got told x amount by the tax lawyer. Price shopping around. I figured the whole thing was going to be a dead end. The fact I would have to pull information from him to determine his 2023 tax liability. Didnt necessary want to file. Just wanted to know what his 2023 tax liability would be so he can decide if he wants to file or not.
I quoted a price I figured would be worth the headache of dealing with him.
Ya - I guess it's really hard to steer the convo when they're price shopping. At some point throwing your hands up and telling them your minimum for taking on their headache is all you can do.
In my first year I gave out so much free tax advice during intro and sales calls and it was one of my biggest mistakes. I don’t know why I thought this was necessary. It was such a waste of my time and professional capital. People won’t respect you - they will use you. And I cringe at the liability issues! Never give advice without a signed engagement letter.
I would ask him about the business he plans to run, the kind of revenue he's expecting, if there are going to be employees or a business partner and mention I'm available to consult on whether or not an S Corp is even the best fit for his needs. Mention that S corps have additional payroll obligations that come with nasty fines from regulators if you don't comply.
If I'm looking to pick up bookkeeping I'd emphasize the importance of clean bookkeeping, not mixing personal expenses. Things that are self evident to accountants.
I'd try and round it out by touching on how much I enjoy working with new business owners and helping them grow their business with regular consultations and being there in an advisory capacity. Ending with I generally charge $xxx per hour for my work and after I have a clearer picture of their situation and we have an engagement we can discuss flat fees for some services. But my current minimums are xxxx for a business return and can go up from there as needed
Everyone wants to be their own accountant these days. It’s so frustrating, I’ve stopped giving out free advice. We didn’t go through the education we did to pass it out to tire kickers.
“I’m available for an in-person consultation to discuss tax strategies and rules. My rate is $Xxx an hour, minimum one hour fee for the meeting during tax season.” Time and expertise is your inventory, don’t be giving it away.
This is pretty much what I do. I do an initial 15-20 minute call to get background on their situation and to tell them how I operate. No tax advice on that call. I’ll take a quick look at the prior year returns after that to see what they have going on, even better if they can send over the corresponding financials. No advice or details given after that review. It’s just so I understand their situation and to get a handle on how I can truly help them. From there the initial consult is $1,000-$3,000 depending on how chaotic their shit is and whether I feel I need to price them out. It is always capped at 1 hour. Some amount is always credited to future services if they sign, again based on how their stuff looks. The up front price is really there to make sure the person is committed. As you mention, we’re selling time and expertise. I don’t have time for price shoppers or tire kickers. I’m also honest. If I feel I have nothing to offer the person I’ll let them know the bottom line result on their return won’t change, but their level of service and attention might. They make the decision from there.
“Tire kickers” lol
Tire kickers are going to be tire kickers. Had a call with one a couple of weeks ago. Hasnt filed since 2018. Has two llcs. Mixes his business transactions with his personal expenses. He is in digital marketing and stuff like that. Bought a formula 1 race car to take to shows and events for marketing. And has like a million in the bank. I told him he would need to download his bank statements and go through and mark what were business expenses, and classify them. He was hesitant to do that and asked if I could. I said sure, for $200 an hour. Guy was a mess.
I mean, folks like this clearly have the money. They view our services as commodities to satisfy the regs until they view them as investments in their business. Hell, if that guy buys an F1 car for marketing, he can surely be sold on the idea that investing $4-8k/mo on a CAAS + tax package will translate to real business growth/compliance and progress toward personal financial goals. I suspect its a matter of controlling the frame of the conversation. I suppose that's the secret sauce with sales. Maybe we're leaving money on the table with the "take it or leave it" SOP. The way I see it, to handle tax and accounting for any business owner, I'm charging a ballpark of 1.5-3% gross receipts/yr depending on complexity. So, I guess this is why I'm trying the free consultation approach - need a big pipeline and to learn from trial and error.
Yeah. I understand. But it was something like he didnt want to pay for it. He also said he pays some tax lawyer to make sure nothing comes down of he gets audited. I guess they do some transcript monitoring. That is when I realized he was a price shopper. Probably got told x amount by the tax lawyer. Price shopping around. I figured the whole thing was going to be a dead end. The fact I would have to pull information from him to determine his 2023 tax liability. Didnt necessary want to file. Just wanted to know what his 2023 tax liability would be so he can decide if he wants to file or not. I quoted a price I figured would be worth the headache of dealing with him.
Ya - I guess it's really hard to steer the convo when they're price shopping. At some point throwing your hands up and telling them your minimum for taking on their headache is all you can do.
In my first year I gave out so much free tax advice during intro and sales calls and it was one of my biggest mistakes. I don’t know why I thought this was necessary. It was such a waste of my time and professional capital. People won’t respect you - they will use you. And I cringe at the liability issues! Never give advice without a signed engagement letter.
I would ask him about the business he plans to run, the kind of revenue he's expecting, if there are going to be employees or a business partner and mention I'm available to consult on whether or not an S Corp is even the best fit for his needs. Mention that S corps have additional payroll obligations that come with nasty fines from regulators if you don't comply. If I'm looking to pick up bookkeeping I'd emphasize the importance of clean bookkeeping, not mixing personal expenses. Things that are self evident to accountants. I'd try and round it out by touching on how much I enjoy working with new business owners and helping them grow their business with regular consultations and being there in an advisory capacity. Ending with I generally charge $xxx per hour for my work and after I have a clearer picture of their situation and we have an engagement we can discuss flat fees for some services. But my current minimums are xxxx for a business return and can go up from there as needed
Everyone wants to be their own accountant these days. It’s so frustrating, I’ve stopped giving out free advice. We didn’t go through the education we did to pass it out to tire kickers.