I started my firm around late March this year, and I’ve got about 10 clients so far, bringing in around $8-10k total. Right now it’s just a side gig, but I’m hoping to see more growth in Jan-April. Trying to tell myself the low client count is just because I’m new, haha.
Lately, I’ve been thinking about the direction I want to go. I like the idea of being an ‘all-in-one’ service with bookkeeping and maybe even financial advice if I get my CFP. But I see a lot of experienced folks saying it’s smart to pick a niche. I’m not sure which route to go yet, and I’m thinking I might need more time doing general 1040s, 1120S, and 1065s before choosing a direction, especially since I haven’t left my main job.
So what’s everyone else’s niche? Do you focus on restaurants, real estate, medical offices, or something really unique? Have you tried a specific area that didn’t work out or maybe found success instantly with a certain type of client? I’d love to hear what’s worked or not worked for you.
Parker said:
I focus on folks who want better service than HR Block but don’t want to spend $1k.
That makes sense, I’ve thought about a high-volume 1040 practice too. What’s your average rate? I started at $400 for basic 1040s in 2023 and might go up to $450-500 for 2024. I’d rather work with fewer, quality clients who might eventually need business returns.
You do have to screen them carefully. Some people fake their experience or double-book jobs, so I use basic monitoring software that checks their screen and activity. Most of my hires are great, but I’ve had to let a few go when they didn’t meet expectations.
Stay a generalist for a bit until something clicks with you. I landed in Employee Equity Compensation because I found it interesting, and there’s always something new to learn in that area.
I’m in my second season, and I’m still a generalist too. Here’s my background and some thoughts:
I used to own a financial planning firm. After I sold it, I moved to a medium-cost area. Most of my clients are ‘everyday’ folks—teachers, firefighters, plumbers, and some small biz owners. I try to be the ‘better than HR Block but cheaper than a CPA’ option.
In my first tax season, I got about 100 clients just from posting in my local FB group and getting good Google reviews. I wish I’d started a FB page for my biz sooner, but I’ve built it up since April. Now I have around 35 Google and 10 FB reviews. Almost all new clients find me on Google first, then Facebook. I did mostly 1040s last season, but I’ve done a few 1065s since then, realizing how simple they can be.
Compared to financial planning, taxes are way easier to get clients for (at least in my view). I think more people are turning to affordable brokerages like Vanguard/Fidelity for planning, which could make it tougher for CFPs moving forward. For taxes, it’s been easier to collect a few hundred bucks a year from many people than a few thousand from a select few.
Of the ~100 clients I got last season, only a handful needed off-season services. So, if you’re considering a niche, keep in mind how seasonal 1040 mills can be. Hope my long reply helps, lol.
I focus on real estate and Low-Income Housing Tax Credit (LIHTC) work. LIHTC has more audit work since investors buy the credits and contribute to partnerships, but it involves IRS rules too.
Paxton said:
I focus on real estate and Low-Income Housing Tax Credit (LIHTC) work. LIHTC has more audit work since investors buy the credits and contribute to partnerships, but it involves IRS rules too.
Nice! I work in affordable housing at a big public firm. I like the fund-level returns, but the credit calculations for occupancy and square footage are not my favorite part.
Paxton said:
I focus on real estate and Low-Income Housing Tax Credit (LIHTC) work. LIHTC has more audit work since investors buy the credits and contribute to partnerships, but it involves IRS rules too.
I was at a LIHTC firm for five years, and I miss it! The work was interesting and consistent, thanks to the credit structure. Cost certs could be a hassle, but the credit calculations were fun.