Mark Washburn
How to Increase Your Client Base

Grow your tax practice using these key strategies.

August 13, 2009
by Mark Washburn, CPA/MST

Growing your tax/accounting practice requires imagination, perseverance and a strong commitment to being the best accountant in your area. While there are many different ideas about how to grow your tax/accounting practice, I focus on a few key ideas designed to increase your client base. Before we look at the strategies, let us assume two likely scenarios in growing a tax practice. First, we look at starting a firm from scratch and second, we discuss ways for growing an established firm.

Starting From Scratch

Starting a firm from scratch usually occurs when a person breaks away from the firm where they began working. Once a certain level of confidence has been attained during the apprenticeship, those individuals with an entrepreneurial spirit start believing they can manage a firm as well as or better than their current employers. After developing the belief, they need two other components to make it work: capital and clients. Provided both are available, a new firm opens its doors.

Once a firm begins operations, survival depends on obtaining new and more clients. At this point, most new proprietors are not discriminatory and accept any new client, using the tried-and-true methods, such as local newspapers and phone book advertising that work to some degree. Working with local chambers of commerce and realtors usually provides solid leads on newcomers to the area. Being active in your area chapter of your state society allows you some possible unique opportunities as well. On more than one occasion during my days as a sole proprietor, I was contacted by other tax professionals looking for someone to assist them. This actually led to referrals coming from these other tax professionals from time to time when they did not have the capacity to accept new clients.

As your reputation grows, new business should come from referrals. Referrals usually represent your most solid type of new client. Why? Referrals come from satisfied clients who are willing to tell their friends and family about you. However, referrals bring about their own type of unique cost. Your first inclination is to provide the referring client with some type of reward or incentive. Nothing wrong about complying, but don't give away the farm in an effort to show your appreciation. Keep it simple and modest. If eventually a client becomes a substantial rainmaker for you, you can always ramp up your appreciation.

As your skills grow and you desire to take on more clients, think about establishing relationships with other professionals. Seek out attorneys who practice client representation before the Internal Revenue Service (IRS) or who perform retirement and/or estate planning. Many times these lawyers need tax professionals in order to preserve their attorney-client privilege. As a result, they don't prepare tax returns but have other tax professional perform those services.

As you prosper and grow, you will undoubtedly have clients who fall into the "problem clients" category. Who are problem clients? Problem clients never organize their data, rarely have receipts, don't believe in mileage logs, return phone calls slowly and generally thumb their noses at the IRS. They represent problems in the form of extra efforts you must go through in order to complete their tax returns. They frustrate you and your staff because you can never seem to get finished with their returns. Grow your business by firing them! Let me repeat — when they become more trouble to you than they any benefit they might represent, let them become someone else's problem. Over the years, I have heard many CPE lecturers suggest you should fire your worst 10 percent clients each year. Early on, the idea of firing clients is unthinkable. Regardless of the efforts expended, you need the revenue. As your client base rises, you can afford to be more discriminating.

Perhaps the most important way to grow a tax practice is developing a niche. Time and again industry experts report that the best of the best develop a niche or exclusive focus in one particular area of accounting. Developing a niche, such as yellow book audits, SEC audits, federal government focus, client representation before the IRS, retirement planning or any other niche hotspots can create untold growth opportunities.

Growing an Established Business

Once your business reaches a growth or mature stage, growing your business occurs differently. Growth usually comes in the form of acquisition or merger. For example, you might be at the point in which a partner could be valuable to your firm. An experienced partner with their own client base might provide a significant growth avenue. Or, someone leaving another firm (be careful not to violate any non-compete clauses) might become available with whom to join forces. Try to become aware of older sole proprietors in your area who are contemplating retirement. Acquiring the client base of retiring tax professionals willing to steer their clients to you, can provide great growth opportunities.

If you live in a rural setting, consider opening branch offices. Banks have been successful with this strategy for years and it can be just as successful for you. Make it a point to staff it properly as well as scheduling yourself to be onsite on a regular basis.


Finally, recognize your need for an exit strategy. You worked hard to develop a successful tax/accounting practice throughout your career, so don't fail to plan for retirement. I have seen too many sole proprietors who have no plan to sell the most valuable business asset they own. They simply retire, leaving their clients to find someone new without recommendation. Market your business, plan an exit strategy and provide yourself with a meaningful end to career of hard work.

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Mark Washburn, CPA/MST, is a Senior Lecturer in Accounting at the University of Texas at Tyler. He teaches both Individual and Corporation tax courses at the undergraduate level. He is a certified public accountant licensed in Texas and holds a Master of Science in Taxation from the University of Texas at Arlington.