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Early Retirement, Small Business

Starting a Successful Seasonal Tax Preparation Business

Readers of this blog are always looking for a side hustle. Seasonal tax preparation is a perfect fit for many early retirees. A small tax preparation business allows for an earlier retirement as the side income can easily be enough to live on for even a modestly frugal person. Another large reader demographic involves the accounting industry. There are plenty of blogs talking about tax issues, but few discuss the realities of starting, promoting and maintaining a tax practice.

I touch on the subject of practice building periodically, but my email folder is filled with requests for a more detailed post. A recent email from someone called Speed (I love it!) asked a series of questions that encompasses the bulk of practice management requests.  Much of what I discuss can be applied to most other business ideas with only slight modifications.

Rather than give a play-by-play on starting and managing a tax practice, I will take each of Speed’s questions and answer them. The reason for avoiding the play-by-play is because there are many ways of starting a successful business. I don’t want to give the illusion you are locked into one pattern to win. Life is rarely that neat.
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Living Between Mr Money Mustache and Tim Ferriss

Modern technology and automation is making our lives easier every day. Virtually every task humans do is also done faster, cheaper, better by some automatic process with a silicon chip inside it. These automation processes started showing up a few centuries ago and started changing human life in fundamental ways in the last 100 years. The pace started slow with a steepening incline of progress. Today, we face a challenge never faced by humans before: what to do.

Free time was always a part of human living. It took the Industrial Revolution to transform human stock into expendable machines. In hunter and gatherer days, man would spend large amounts of time idle, pursuing whatever created interest. We can still see a few remaining fragments of art at historical sites. Hunting parties might extend for days or even weeks. Once game was slaughtered and the meats cured, the pantry was full for an extended period of time. Weeks, even month were free to build monuments, create art, and tell stories around the fire.

Then the Agricultural Revolution arrived. Man had his first taste of what was yet to come. Humans were now slave to the ox and land. Working the land and domesticating animals kept man busier than hunter/gatherer days. Hunched over the plow all day brought the first lower back pain for the species. Humans worked more hours than ever. But once the crops were planted there was free time, followed by a flurry of activity harvesting the crops. Then, man settled in for a long winter season of leisure.




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Dealing with Jealous People

4482714827_491d395f7e_bReaders of this blog are committed to financial discipline. They save a large portion of their money and invest it wisely in index funds and real estate. Whatever is left after investing they consider spending . . . maybe.

Before long the value of the index funds grow significantly and the investment properties gain more equity while throwing off a steady stream of passive income. People begin to notice. You, one of the mentioned readers, drive a less than fancy car and have a modest home or apartment. People also notice you brown bag lunch at work and rarely party with the crowd. Instead of the bar scene you invite friends over for a cookout and a few cold ones.

Everyone around you notices how much less stress you seem to have compared to them. You make it look easy. And you have money. Of course, you do. Because you don’t spend every penny you earn. It starts with one person feeling resentment and spreads like a bad rash. For the first time you feel the sting of jealousy. People you care about and admire now have turned against you because you are clearly no longer like them. You lack the fancy house, expensive car and endless nights of fine dining. And how dare you live without cable TV. Is there something wrong with you?


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Early Retirement, Lifestyle

Take a Selective Vacation to Maximize Productivity

vacation-149960_960_720The past year has been the most brutal of my career. What started out as a good idea has cascaded into a challenge I am still working the details out on. Challenges excite me, but this one showed up unannounced.

Back in the day when I was building my practice I didn’t work that many hours because it was a seasonal business and I saw no need to bust my tail for “a few more dollars”. (A good movie, by the way.) My strategy was simple; always do better than the year before. As the years accumulate, beating last year required more work. It wasn’t money; it was pride.

Eventually I was working way more than I wanted to, so I cut back dramatically and seriously considered selling my practice and living a “real” retirement. The reduced hours and the return to a normal lifestyle (for me) put the “selling the business” idea on the back burner.

It all changed a year ago. This blog and other media attention sent requests for my personal services through the roof. The process of digging out is still ongoing. I had no choice but to say “no” a lot more than I ever had before. That is a difficult pill to swallow because I love working with people and helping clients reach their goals.


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Lifestyle, Small Business

Increase Blog Traffic Faster Than Naked Kim Kardashian Pictures

blog-1027861_960_720By this time I am mildly qualified to intelligently explain how to increase blog traffic. My online writing goes back to the AOL days in the 90s and grew over the years. The Wealthy Accountant is my most popular blog, but I have two fantasy fiction blogs pulling around 4 million pageviews a year, an astounding number for online fiction. The Wealthy Accountant numbers are lower, but the traffic is higher quality; in other words, Google, advertisers, and readers like it more. This blog now boasts 40,000 page views per month with a strong growing trend line. There are a few tricks I learned over the years to accelerate blog traffic. I am no expert on the subject and there are many with greater skills at increasing blog traffic. My experiences, however, should provide a solid framework to take a blog from zero to a million pageviews in a year.

The first year is always the hardest. Unless you have a name people know growing traffic is done the old fashioned way. It takes work and time. My three steps to building a blog are:

  • First, create content
  • Then, build traffic
  • Then monetize

Jumping the gun on any step can harm traffic. You need content before building traffic; you need traffic before monetizing. Growing quality content is the hardest part for many people. Writing is supposed to be easy. You just sit in a chair and type. And bleed.


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Lifestyle, Small Business

Priming the Pump

old-water-pump-11288192674wwep

When I was a young boy growing up on the family farm we had three sections to the farm: the homestead, Newhouse place, and “up by the other place”. Yeah, we really called it “up by the other place”. We were sophisticated hillbillies, I tell ya.

Up by the other place there was a well with an old style pump you worked by hand. Toward the end of our farming days the pump was fitted with an electric motor, but that doesn’t help with our story.

The old well pump up by the other place was a job I hated. Feeding the animals was okay, but getting the tank filled with water was a chore. And a lesson. That old well taught me more about life and success than any seminar or college class I ever attended. The lesson was so simple. It amazes me to this day more people do not understand the lesson of the pump.

The Investment

That old well was deep. Getting water out of that darn thing prit’ near (yes, I am writing this way intentionally) killed me every day I went over there. The only saving grace is water from wells so deep is ice cold and sweet. There is no water in the world that tastes as good or refreshed as well. Getting the water is the issue.

The job was simple. You started pumping the long handle vigorously, up and down, up and down, up and down. You put your whole body into it. In the summer sweat would pour down my face as I gave it all I had. After several minutes I wanted to quit or at least take a break. But that is a mistake. It takes a long time to get the water flowing. With each pump of the handle the water works a bit higher, but if you stop it goes all the way back down and you have to start all over again.


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Small Business

Small Business Owners: Delegating for Massive Profits

My previous post on delegation had a comment from John McCarthy with the following request for advice:

I would be interested in some of the behind the scenes (nitty-gritty) detail of the things you are now delegating. Like you, I am running a tax preparation firm. For the past 15 years it has been a side business, but now I am putting my full effort into marketing and expanding it. I spent a year building a financial planning practice at XYPN but decided I could do more good in the world by helping other financial advisors as a tax consultant and a safe place for them to send their financial planning clients to for tax preparation. I am really enjoying working with financial advisors to provide proactive service to their clients.

If you were advising a new business owner of a tax practice, what would be your top three pieces of advice? Would love to hear your perspective!

I felt my answer would serve more readers than just business owners and the answer in rather long so I decided to make it a special post. (Two posts in one day! Wow Mr. Accountant, are you on something? Why, yes. Yes, I am.)

First, let me address how I structure delegation in my office. Delegation is more than just taking stuff on my desk and throwing it on somebody else’s. If you want work done right you need to delegate to the proper people. The best delegation keeps projects from your desk in the first place.


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Early Retirement, Lifestyle, Small Business

Learning to Delegate

51zn0aJy4lL._SX322_BO1,204,203,200_There is a sickness spreading in the FIRE (financial independence, retire early) community. This sickness threatens to topple the best laid plans of intelligent young men and women everywhere. The mentality is that you must do everything yourself to save a dollar and reach your FI goal as soon as possible. Except this DIY mantra is the surest way to delay FI and early retirement by a substantial amount of time.

The worst disasters at my office and lowest times of profitability are when I, as the boss, either refuse to delegate or do not have qualified employees to delegate to. The same applies in personal life. When you do every possible job yourself you lose the economies of scale a professional can bring to the table at a lower cost, faster completion, and a better finished product. Your FIRE goal can be delayed because you refused to delegate.

What are Friends For

The past tax season was a challenge to say the least. Two factors played a role: lack of qualified employees for me to delegate to and the refusal to delegate projects I should only be overseeing once qualified employees were in place. It took a while, but I have a good team in place handling the additional workload. The weak link was yours truly. I reluctantly delegated work as it piled up behind my desk. Finally, when I had nowhere to run, I delegated the bulk of my workload. Stuff sitting behind my desk for months was getting done and out to the clients. It also increased profit margins.


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