I have had this discussion with three business owners in the last two weeks. One was launching a web store, one was considering opening a business, and one was struggling to survive.
I too am faced with this. No American can dodge a commercial from one of the big tax preparation shops from January to April. To compete, I follow these three rules:
Rule 1: Never compare apples to apples! Change what you offer your customer in order to meet a need in a way the big competitor can’t or won’t match.
Rule 2: Never, ever compete on price! The big competitor can charge less because they have the buying power and economies of scale. Don’t compete with them based on their strength.
Rule 3: You compete by finding a hot market and a niche! Dan Kennedy says the #1 thing he would want if he was a restaurant owner is hungry customers. It’s a great way to say you want to sell to those customers who have a problem they need a solution to and the money to pay you. The big competitor usually sells to all customers and must treat all customers basically the same. This gives you the opportunity to find a niche and design a program that solves a problem that the niche has in a way that the big competitor can’t or won’t.
I followed these rules in my tax practice by concentrating on selling tax planning and profit coaching to growing small businesses (following rule 3). Once I show the business owner how to cut their tax bill and work with them to increase profits, they just automatically have me do their tax return because they trust me.
By not selling the tax return first, I now force the customer to compare apples to oranges. We both do tax returns but because of my experience and knowledge, the employees of the big tax shops (with their six week training course) can’t match what I offer. If the growing small business owner wants tax planning and profit coaching, I’m one of their only options.
Study these three rules and consider how you can apply them to your business. Feel free to call me to set up an appointment where we can talk about your situation.
Until next time, let’s make this our most profitable year ever.
Like any good CPA, I need to add a disclaimer: Unfortunately, it is impossible to offer comprehensive tax and business advice over the Internet, no matter how well-researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: Before relying on any information given on this site, contact a tax professional to discuss your particular situation.