Monday, June 7, 2010


Here is an email I received from a fellow tax preparing Twit and TWTP reader:

I enjoy reading your blog, and just read your post about Twitter. I follow you on Twitter, and other tax professionals, as well as family, but I don't think I will get clients from it. I agree that Facebook would not bring me clients either.

But what do you recommend for someone who is just starting out? I don't have any of the clients from my former firm, because those clients belong to the firm. I believe I provided good service to them, but they won't recommend me personally - they'd recommend the firm.

Do you have any advice on how someone starting a practice gets those first clients, who would then refer others?

I am not a CPA yet. I've passed REG and FAR, and taken AUD but don't know if I passed yet. I've had 5 seasons of tax experience with firms.

Thank you for your advice,


Glad you enjoy TWTP.

I may not be the best person to ask how to build a practice – as the bottom of my shoes are sticky and smelly. But I will tell you what has worked for me over the years. I will be talking about building a tax preparation practice, and not an accounting one.

In my 38+ years in “the business” I have never taken out an ad – other than a “business card ad” in a charity journal. I do believe that clients who look to the yellow pages and print advertisements to find a tax preparer are “shopping” and are more driven by price rather than quality of preparation. These will not be loyal clients, and will probably leave the herd when they find a better deal.

As I have said many times before the best source of clients is referral from existing ones. While I have gotten a few “clunkers” this way, for the most part referrals from satisfied clients usually become good and loyal clients who will themselves provide good referrals.

Think of the tv ad of a few years back where “you tell two friends, and they tell two friends, and they tell two friends . . .”.

Initial referrals often come within a specific field, industry, trade or profession. So it pays to be proficient in particular types of client returns. Learn the unique deductions and loopholes available to specific professions.

Many years ago, on an escorted cross-country train trip, I met a young fireman from Newark who was just starting out in his career. I did his taxes and he was pleased. He then sent me many of the other young firemen in his company, who in turn followed suit.

But I did not get only firemen. The members of the Newark Fire Department also sent me friends and neighbors who were policemen and public works employees, and if a wife happened to be a teacher I would get referrals of other teachers.

And I also eventually “did” the parents and siblings of many of the firemen, policemen, teachers, etc.

I sat down one day and did a “tree” of client referrals, listing the various branches that “grew” from the initial Newark fireman. I turned out that almost half of my clients at the time had come either directly or indirectly from that traveling fireman.

Similarly, also many, many years ago, I did the tax return of a casual high school friend who was ordained as a Lutheran minister and was assigned a “parish” in our home town. As a result I added other Lutheran ministers in the “diocese” (not, I am sure, the correct term) to my list of clients. It seemed that when a new minister was assigned to a church in the county my business card was among the items that he was given.

I still prepare the returns for that initial fireman, and that initial Lutheran minister (who is now in Maryland).
As soon as you are introduced to someone and you tell them that you prepare tax returns for a living you are bound to be asked for free advice. While you shouldn't "give away the store" you should not hesitate to provide basic answers. Seem interested in their situation and add something like, "I really can't properly answer that question without knowing more about your specific situation {which in most cases is actually true}. Why not stop in the office sometime and we can discuss this further?"
{As an aside, when I met Elliot Gould's aunt and uncle on a cruise to Alaska and told them I was a tax accountant the response was in effect, "Those damned accountants stole Elliot's money!"}
Back in the 1980s I taught courses in tax planning and tax return preparation in the evening at various Adult Schools near where I lived. Many Boards of Education will offer classes and workshops for adults in a wide variety of topics in the evening held in actual school classrooms.

My courses were not for individuals who wanted to prepare tax returns professionally, but for average middle class taxpayers who wanted to learn how to pay the absolute least amount of tax possible on their own individual 1040s. I had various models – a one session overview, a 2-3 session review of year-round tax planning techniques, and a multi-session in depth line-by-line review of the Form 1040 and Schedule A.

The pay was not great – a modest per hour or per student stipend – but the reason was not to make money as a teacher but to “spread the word” of my abilities as a tax professional.

A large percentage of my students also became clients, some who have been with me for 25+ years now.

When I first started out I had a “regular” 9-5 W-2 job - as the business manager and accountant for a suburban YWCA branch - and, during the tax season, worked for my mentor Jim Gill on week-ends. I began my own little 1040 practice by making house calls and doing “kitchen table” tax preparation, initially for co-workers from my 9-5 job. I then began teaching, as discussed above, and making house calls to my students. By the time I met the fireman I was sharing an office with a fellow accountant.

After my tenure with the YWCA I worked briefly, as a “para-professional”, for one of the then “big-eight” CPA firms – Deloitte Haskins + Sells, becoming my department’s resident tax expert. I was able to go totally on my own through contacts made during my year at DH+S. When I left I did actually take a few of my small business clients, who did not need a CPA, with me.

My mentor’s office was a storefront, initially steps from “Journal Square” in Jersey City (where the Jersey Bounce started), the city’s transportation hub (we later moved to another storefront steps from the County Courthouse and Administration Building). Because of our locations, and being a storefront, we had a steady source of walk-in clients – some of whom stayed for only a year or two (often thankfully) and some who are still with me today.

I was able to limit my practice to tax-season 1040 preparation (except for a very few select long-time year-round business clients) when my mentor (with whom I had worked for at least 25 years at the time), having turned age 75, said to me, “I’m tired of doing this. You can have the practice.”

While I no longer seek new 1040 business, because of my profile as a tax blogger I often receive emails from taxpayers asking me to take them on as clients. I am thankful but decline. Writing a tax blog, with correct advice and information, is a good way of "spreading the word" about your ability and soliciting clients.

I hope my little walk down memory lane has been helpful.



Joe Arsenault said...


This is an absolutely excellent post for any young practitioner. I have spent the past couple years grinding it through those stages, networking and working with other CPAs following my public accounting past life. I am still in a growth stage although no longer "just starting out". I had to link to this piece. Great insight for anyone looking to start their own practice. Kudos all the way around.


Robert D Flach said...


Thanks for the kind words.

Glad you found the post of value.


Daphene said...

Even though this blog is from 2010 it is an excellent read still today. Thank you so much and I will began to set my tax business in motion.