The Tax Pro’s Guide to Writing a Professional Tax Business Plan

If you think business plans are only for entrepreneurs seeking investors, think again. Research suggests that businesses that have a plan to grow more quickly are more likely to succeed than businesses that don’t.

Writing a business plan for your tax practice doesn’t have to be daunting or overly time-consuming. Here’s everything you should know to get started:

How long does it take to write a business plan?

That all depends on how detailed your plan is. Below, we’ve outlined the business plan categories that are most relevant to tax preparers. You should be able to complete something like this in a regular workweek.

More detailed 

Unless you’re planning to get a business loan or investors, an incredibly detailed plan usually isn’t necessary for tax preparers. These plans, complete with detailed market analyses and financial projections, can take months.

Simple and to the point

For most tax preparers, a much simpler business plan is perfectly sufficient. Since you’re writing a plan mostly for your own benefit, your plan can focus solely on your goals, tactics, and the market research that’s relevant to you. 

Lean and mean

Lean plans are typically single-page plans that outline your most basic goals, strategies, and timelines. With a helpful template, a lean plan can take as little as an hour to create, though you should plan to invest more time later to review and update it. Lean plans are meant to change and grow with your business; a quarterly review and assessment of your lean plan will help you determine whether it’s still working for you.

While a lean plan may not provide you with as much market knowledge as the simple plan outlined below, it’s still a great tool to help you organize and start your business. 

Even if you know you want to create a more detailed plan eventually, a lean plan provides an excellent starting point. Once it’s complete, you’ll have the structure of your business plan in place, and you’ll be able to identify the parts of the plan you want to develop more.

What to include in your business plan

Executive summary

Think of the executive summary as the bullet points version of your business plan. Here, you’ll lay out the most important parts of your other sections. Even though your executive summary will appear first, you should write it last. 

Technically, you can skip this section if you’re only writing your business plan for yourself. However, having an executive summary will be helpful when you want to quickly look back on goals, evaluate your progress, and update your plan as necessary. 

Products and services

Here, you’ll outline exactly what you plan to offer your customers. Many tax preparers diversify their income with other services like bookkeeping. These are some of the services you may want to consider including in your business:

  • Tax return preparation for individuals
  • Tax preparation for sole proprietors and freelancers
  • Bank products to help your clients receive their refunds how and when they want them
  • Tax preparation for small businesses
  • Bookkeeping and accounting services for small business

Market analysis

Creating a market analysis can get extremely research-intensive in a detailed business plan. For your simpler, personal plan, however, you can stick to outlining these factors:

  • Your target customers
  • Your customers’ problems or needs
  • What customers typically pay for your services
  • Your competition 
  • Any governmental regulations or restrictions you’ll face. (Tax preparers need certain certifications to do business.)

Since most tax preparers work with local clients, you’ll want to find out how many other tax preparers are in your area, how they market themselves, and if they focus on any particular niches. Knowing their specialties can help you identify holes in the market. If most other local tax preparers are focused on individual tax returns, for example, you might consider marketing your services more heavily towards freelancers and small business owners.

Financial Plan

As you write your financial plan, consider the following questions:

How Much Does It Cost to Start a Tax Preparation Business?

Tax preparation generally has low barriers to entry. While individual costs will vary, our Tax Office Checklist can help you identify and plan for everything you’ll need to get started.

What Should I Charge for Tax Preparation?

Tax preparer fees can vary by region and type of clients. If possible, try to find out what your local competitors are charging.

What Will My Cost of Business Be Throughout the Year?

Do you pay for an office space? How many employees do you have? How much do you pay for a reliable internet connection? Consider any and all business costs you may experience throughout the year.

How Many Clients Will I Need to Be Profitable?

After you’ve estimated your costs of doing business and set your fees, you can calculate how many clients you’ll need to make a profit.

What are my Projected Profits for the First Year?

Subtract your total anticipated business costs from your expected revenue to see how much you can plan to profit for the year.

Execution

In the execution section of your business plan, you’ll lay out:

By adding a timeline to your execution section, you’ll be more likely to reach your goals.

While it may seem easier to “wing it” as you start your tax business, you’ll find that taking the time to create a business plan makes the process more organized and less overwhelming. Don’t be intimidated by the time or research involved. Even the simplest business plan will be a huge asset as you start your tax preparation business!