H&R Block is Closing Offices. What Does That Mean For Small Business Tax Professionals?
As part of its annual review, H&R Block has decided to close over 400 smaller offices across the nation due to lower profit margins and diminishing sales. The result of too many offices, too close together, has created a decreased consumer need for the company’s long standing, wide-ranging tax preparation services. Combined with the surge of do-it-yourself tax preparation technology such as TurboTax or H&R Block’s own DIY software, the verdict from Wall Street has been a 20% percent plunge in stock market pricing in the last week alone. The company has said they do not plan on any reductions in their workforce- the closures make up only 4% of the companies 10,000+ company-owned and franchise locations,
Online tools and newer tax laws have increasingly lowered the complexity of filing annual tax returns for millions of American taxpayers. Although H&R Block may be suffering from over-saturation in the marketplace, they plan to retain all of their employee population, in addition to making changes to pricing structures and continuing to promote their user friendly online tools.
So what does this mean for the small to medium tax preparation companies? For starters, millennials and their counter-parts in the older generations, continue to prefer personal assistance when preparing their taxes. With over half of new tax preparation customers under the age of 35 years old and an existing customer base of over 70 years, the demand for one-on-one services (or any other small business) is still relevant. A couple of ways to stand out amongst the competition:
- Give clients visual reports regularly. Time is money. Time is valuable. Less time can sometimes equal more money. That doesn’t mean jeopardize quality, but it does mean making more sense of details with less time interpreting them. One way to do that is through visual reporting by presenting critical financial information in simple charts and graphs. Always show how they are doing via actual projections, budgeting and forecast, and how they have done historically. High level executives, even at the small business level, may glaze over on complicated reports and spreadsheets. With precise graphs, charts, and business-specific financials, the client will likely express a higher level of engagement.
2. Help clients put together key performance indicators, establish where clients are now, what they hope to achieve, and how they should plan to get there. Cash on hand, revenue growth, profit eating, and gross margin year over year are distinguishing mile markers for both small and medium businesses alike.
3. Personal investment. With DIY and online tax services becoming more popular, there is still the need for personal involvement and good-old-fashioned relationship building. Some people still want to avoid the idea of taxes, while others like knowing that someone else knows their personal history and is invested in their future.
With online tools and competitors in mind, it’s crucial to market your business in a way that always gives one-on-one, personalized results in the most cost-effective, customer-focused way to diversify and expand your business.
– Susan Amsler
– June 12, 2018
Randolph Business Resources, LLC.
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