I’d like to start off this week with a question from Rudy in California. Rudy has his own tax service and has grown it to 250 clients. He has been operating out of his home office for a couple of years. He needs more clients and wants to know how much opening a storefront location would boost his business. He is concerned about investing in the office as he doesn’t want to take a loss or lose income with the additional expenses. First off, Rudy, you are off to a good start. 250 clients is a nice base that can quickly be built into a nice living. And it’s awesome that you took the time to ask for help. The first thing for you to do is a budget on what your costs would be to open and then compare that to your existing and projected revenue. I’ll give you a quick estimation. A storefront can cost anywhere from $500 all the way up to $5000 per month in rent. So yearly will be between $6,000 and $60,000. Then you’ll have utilities, phone and internet. That will range from $300 to $600 per month or $3600 to $7,200 per year. You’ll need liability insurance that will range from $300 to $600 per year. You’ll also need additional staff so you’ll have to recruit, hire and train employees which is challenging and expensive. Depending on your volume, it could cost you from $5,000 to $15,000 for payroll alone. Then there’s the buildout and setup of your location. Desks, chairs, computers, printers, signage, office supplies plus any construction or painting to get the office looking nice. Even for a small office this can cost between $10,000 to $25,000 in improvements. So totally all of that up as an estimate, you’ll need somewhere between $25,000 and all the way up to $100,000 or more to get set up and pay for your expenses for the year. And that is without any hiccups. Rudy, I don’t know what fees you charge so I can’t tell you if this is worth it for you however you can do the math to see how many returns you’ll need to do in order to break even. And I’m certain that your goal is not to break even. Be careful of making the jump into a storefront as it is possible that you may boost your revenue while making less profits and giving you more headaches.
What I would recommend instead, is to focus on Relationship Building with your existing clients and leveraging that to gain more referrals. All it really takes is to be helpful and attentive.
Here’s 3 ways you can do it.
1st is to Pick up the phone and call all of your existing clients as soon as possible. Be kind and treat them with respect. Let them know that you are available year-round for any questions they might have. Spend 5 minutes on the phone with each of them seeing how things are going. Remind them that there’s no time like today to start planning for next tax season.
2nd. If you don’t have their email addresses, make sure you get them on those calls. And then use them. The conventional wisdom says to send them a monthly newsletter. That is an absolutely terrible idea. Canned newsletters are boring and impersonal. Most people don’t read them. Take the time every month to write no more than 3 paragraphs on ideas they should be thinking about and just send it. No fancy templates or shared content. Always ask them to reply with any questions or if they need help of any kind.
A 3rd approach is to send them a birthday card, or just a thank you note for doing business with you. Or send both. Make sure you personally sign the card or that the thank you note is handwritten.
These strategies will help you retain your current clients, and it will help you grow your business through the absolute best marketing strategy ever, “referrals”. Don’t forget to ask for them on each of these strategies.
Have a great evening and productive rest of the week. Let me know if I could help you in any way.
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