

Copyright © 2017 Mario Costanz

Illustrations by Galfi Csaba

All rights reserved. No part of this book may be reproduced or used in any manner without the express written permission of the publisher.

Paperback ISBN: 0-9992175-1-8Paperback ISBN-13: 978-0-9992175-1-1

Digital ISBN: 0-9992175-4-2Digital ISBN-13: 978-0-9992175-4-2

Published by Happy Tax Publishing350 Lincoln Road, Miami Beach, FL 33139

Printed and Bound in the USA.

Visit: TaxesMadeHappy.com

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Table of Contents

Dedication ...........................................................................................v

Acknowledgements ...................................................................vii

Foreword by James Budd .........................................................ix

Preface ....................................................................................................1

Chapter 1 First Things First .................................................7

Chapter 2 Identifying the Opportunity ...................23

Chapter 3 Lessons and Pitfalls in the TaxBusiness ..................................................................................................33

Chapter 4 Succeeding Within a Franchise .............45

Chapter 5 Laying the Groundwork ..............................55

Chapter 6 Building and Nurturing a Team ...........67

Chapter 7 Simple Marketing Principles ....................81

Chapter 8 Customer Service for the Win .................95

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Chapter 9 Leadership The Happy Way ...........................111

Chapter 10 How to Overcome Obstacles ...................119

Chapter 11 Expanding Your Tax Business .................137

Chapter 12 Building Lucrative Alliances ..............155

Chapter 13 Tools & Tricks of the Trade .....................169

Chapter 14 Conclusion .............................................................191

Recap of Take-aways ....................................................................197

Afterword ...........................................................................................205

Resources .............................................................................................207

Glossary ................................................................................................209

About the Author .........................................................................215

Learn More ..........................................................................................217

Further Information ................................................................219

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Dedication

I dedicate this book to those in my life whom I can no longer thank in person for all they have done for me and my spirit.

To my father, Frank Costanz. Your strength and confidence has served me well in tough times.

To my mother, Donna Sparacio. Your unwavering love has given me the ability to empathize with others and truly care.

To my brother, Frank Costanz. Your enthusiasm for life and your per-sonality still make me smile all the time.

To my friend, Rebecca Conkling. Your guidance and support has taught me numerous life lessons that serve me well almost every day.

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Acknowledgements

I'd like to acknowledge my children, as my path as an entrepreneur has sometimes kept me away more than I'd like to be. You are all amazing, special, talented, and loved.

I'd like to acknowledge my siblings and the rest of my family. We've been through a lot together and I am proud of you all and thank you for all the support.

I'd like to acknowledge my team in all of my businesses going back to 1998. Even when I was winging it, you had my back and I had yours.

I'd like to acknowledge my friends and co-workers from my time at the New York City Department of Sanitation. The camaraderie that I expe-rienced with you is one that I have yet to ever experience in the business world.

Finally, I'd like to acknowledge all those that thought I'd never make it. Here's to you! ;)

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Foreword by James Budd

Forward.Relentlessly, inevitably forward.

I can think of no better single word to describe the entrepreneurial fire-core of Mario Costanz.

Mario Costanz is a force of nature, a blood-and-action entrepreneur, and—in a world of so much misleading—a real leader.

He is a hint of Musk, a dash of Branson, a splash of crazy wisdom, and still 100% Super Mario.

At Visionfire CEO Coaching, one of our guiding principles is to "Give the most relevant information in the least amount of time in the most respectful way."

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So in respect for the readers' time, and as if you had the time constraints of a busy CEO with ADD, I humbly present you with 10 ways you may be moved, informed, surprised, inspired, and made richer by Mario's tale.

You can activate the practical knowledge immediately. Whether you're a seasoned CEO or a complete beginner—you will find gems here.

It is an ode to overcoming. When things don't work out. When you have no money. When you don't know what to do next. When it is 10 times harder than you thought it could be—you will find light here.

From disrupting the 20-billion-dollar tax industry to taking the agony out of doing your taxes forever—you will find the future here.

Although it is a hero's tale of an unpretentious NYC garbageman turned world-class CEO, it is also every entrepreneur's journey—you will find your story here.

As a rock-solid blueprint for a successful tax business, franchise empire, and beyond—you will find your path here.

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With plain talk, nuts-and-bolts achievements, practical real-world tips, down-to-earth next steps, ground-truth advice—you will find massive action here.

Thanks to the inspiration to take a fearless inventory of what you want in life, why you want it, and what you're willing to sacrifice to get it done—you will find clarity here.

From Mario's stories on making mistakes, learning from them quickly, adapting rapidly, and triaging on the fly—you will find how, when, and why to let go here.

Because of his reminders to tell the truth when it is hard, keep your promises to others and yourself, and realize that what you say is what you do is who you are—you will find integrity here.

With advice on everything from how to update your programming, to how not be so afraid of change, to how you can make faster, more powerful decisions—you will find wisdom here.

When applied, this book will gift you with an incredible resolve to keep moving forward in conquering your own entrepreneurial fire-quest.

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With Mario's guidance, may you keep moving forward!

Respectfully,

James BuddCEO/Creative Director/Coach<http://visionfirecoaching.com/>

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Mario Costanz / 1

Preface

"Our business in life is not to get ahead of others but to get ahead of ourselves—to break our own records, to outstrip our yesterdays by our today, to do our work with more force than ever before."

—Stewart B. Johnson

When it comes to success in business, there is no magic potion, no secret sauce, no easy way out. Sorry to disappoint you.

However, even if there was a magic potion, I wouldn't recommend it. Sure, winning the lottery can change your life in an instant, but it will never compare to the deep sense of achievement and pride you'll feel when you've attained success through the virtue of your own hard work. It feels better to earn something than to have it handed to you.

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That said, achieving success doesn't have to be complicated either. This book is not a rocket science textbook. It's a practical guide full of simple steps you can follow to launch, nurture, and expand your tax business. These strategies can be used whether you decide to go out on your own in an independent tax practice or you choose to affiliate yourself with a tax franchise or service bureau.

Whether you're just thinking about venturing into your first business or you're opening your 20th office, there's probably something in here for you. The stories I share in this book are plucked straight out of my life, amounting to 15 years of first-hand experience in the tax industry. During those years, I've opened, re-launched, rebuilt, and turned around a total of 100 traditional tax offices. I've mentored and developed hundreds more.

Given this experience, I've learned a lot—partly from my successes, but also from my mistakes. These days, good advice can cost a pretty penny. There is plenty of information out there, but the hard part is finding the time to wade through it all and deciding what's important. I've done that for you. I've culled all of my experiences and hand-picked the most relevant, informative, and interesting

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examples to help you achieve success within the income tax preparation industry.

Most of the stories and concepts discussed here are specific to the tax business; however, many of the principles I'll cover will be applicable to any type of business you want to launch or grow. Above all, this is a book about how common sense, hard work, smarts, and a positive attitude can propel your business to new heights. It's a book about action.

Each chapter in the book begins with a personal story, which leads to a lesson or take-away message, and ends with some homework. But this isn't like your school homework. You don't have to do it. There is no teacher forcing you to do it. No parent shaking their fists at you. So it's up to you to put them into action. If you follow the principles in this book, you are drastically increasing your chance of success. Your success depends not on your ability to read or memorize every word, but on your commitment to putting these lessons into action.

To that end, I've intentionally kept this book short. It's easy to type hundreds of pages when you're passionate about a topic, like I am

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about the tax business—it's much harder to distill half a lifetime of real-life business experience into relevant and useful nuggets of actionable insight. But that's what I've done here. You won't need to spend weeks or even days reading. You can activate and apply the practical knowledge immediately.

The chapters cover a range of critical topics, including how to identify a ripe business opportunity, how to launch and grow your tax business, how to leverage the benefits of a franchise to your advantage, how to expand, and how to overcome common obstacles to stay on track in order to achieve your goals. Along the way, I'll share some tips and tricks of the trade that you can borrow, copy, or steal—permission granted.

Some of my readers may find themselves relating to my story immediately; others may find certain portions irrelevant at first. In the end, the best thing to do is to find the takeaways that motivate you to act. Because action is the shortest distance between today and success.

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I invite you to learn from my failures and from my triumphs. Make this book work for you. Our time on this planet is short. Make every day count.

I appreciate and respect that you are taking the time to invest in your future. I wish you nothing but the best of health and prosperity—in business and in life.

Warmly,

Mario Costanz

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Chapter 1First Things First

"Do not be embarrassed by your failures, learn from them and start again."

—Richard Branson

One day, I saw a young father, barely 23 years old, who had three little mouths to feed. He worked hard every day but was clearly dissatisfied with the 9-to-5 grind and couldn't stand working for someone else and making dollars per hour while others got filthy rich. Like most people, he wanted a better life for his family, but he knew next to nothing about business. All he knew was that he wanted to become a true entrepreneur one day, whatever that meant. He was certain he couldn't achieve his goals or adequately provide for his family by working for someone else for the rest of his life.

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I saw that young man in the mirror at age 23. Because that man was me.

When I was a child, my family moved around from time to time, and oftentimes my single mother struggled to make ends meet. She passed away in my early 20s, and I am endlessly grateful to the sacrifices she made when I was growing up. I, however, didn't want to endure the same burdens in my adulthood. As I started my own family at a young age, I had visions of success. I had many vague ideas about how I would support my own children and earn more money, but I lacked practical direction for how to realize these dreams.

A year prior, at the wide-eyed age of 22, I had opened a pizzeria, because I was convinced I should try my hand at owning a business. But instead of achieving wild success and earning tons of money, I learned one of the most important lessons of my life. The pizzeria—not even a year old—failed.

In the wake of defeat and disappointment, I realized that I was not invincible. All the passion and hard work I had put into my business was not enough to save it. It would take me a few years of

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experience and "hindsight" perspective to understand that working hard and loving my business were not enough to ensure success. Through my eventual experience with ventures in real estate and tax business franchising, I learned first-hand that working smart, not just hard, was the key to success.

Following the closing of the pizza shop and at the request of my mother on her deathbed, I sought out something more stable. I took a job as a New York City garbage man, picking up some of the world's most vile, most putrid, but also most interesting trash. It was a tough job — not to mention one of the most unpretentious jobs imaginable — and although I worked hard from the start, it took me a while to reconcile the fact that I, an aspiring entrepreneur, now picked up garbage for a living. But no one said life was fair.

I am endlessly grateful to my younger self that, in the midst of this deep personal frustration, I didn't give up my entrepreneurial dreams for good. Maybe I put them to the side for a moment, but I never lost sight of them. If I had, I simply wouldn't have gotten to where I am today. I might've still been a garbage man, working doggedly towards a pension and not worrying about much more. Certainly I wouldn't be writing these words and sharing my

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knowledge with other entrepreneurs and hopeful entrepreneurs. Fortunately, deep inside my conscience was a faint ember, a hint of a fire that just wouldn't go away. In the end, my conviction was simple: I refused to give up on my dreams.

Dreaming—having life goals and desires—is fundamental to being human. We all have dreams. But not everyone achieves their dreams. Why is this? For simplicity's sake, think of the world as divided into two populations: doers and don't-ers. Yes, I stole that from Johnny Wu in Pain & Gain (http://hpy.tax/JohnnyWu). You can substitute other words, like "thinkers versus movers," but whatever vocabulary you use, the concept is the same, and at the end of the day you belong to either one camp or the other. You're either actively working towards achieving your dreams, or you're putting them on life's back-burner, where they can sit and collect dust for months, years, or (if you let them), even for a lifetime.

Doers win because they always, without exception, finish whatever they set out to achieve. It's not enough just to dream, and it's not enough just to start. Procrastinators and excuse-makers are a dime a dozen, in every industry, in every part of the world. Doers envision a worthwhile project and they keep working until the job

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is done, whatever obstacles they have to surmount along the way. It can be a small task, or a multi-year ambition involving dozens of projects. To a doer, it doesn't matter. What matters is action. Results. Achievement. Completion of one set of tasks and moving on to the next set. This is what success looks like to a doer.

If you surround yourself with motivated people, whether it's in business, education, politics, sports, or another arena, you'll quickly notice that these folks demonstrate an incredible resolve to keep moving forward. They possess an incredibly strong focus on their end goal. And they have a clear destination in mind. At times, their goals may even seem simple (though don't confuse "simple" with "easy"). In fact, your life goal or vision should be simple. If you can't express your objectives clearly, if you can't articulate a vision of your destination in a few seconds, chances are you're not quite sure what you want. Indecisiveness will cost you a lot of time, money, and effort in the long run. So invest the time at the start to clarify, tweak, fine-tune, and simplify what it is that you're seeking. After all, it's your life. Your precious hours, days, weeks, months, and years that are passing by. When you have a clear goal in mind, you are able to assess at any moment whether

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your actions are moving you closer or pulling you further away from your desired destination, and re-calibrate as needed.

Getting to the finish line is the thing that really counts. Yes, the journey toward the goal matters, along with the experiences you collect and lessons you learn along the way. But let's face it: when it comes to business goals, what really matters at the end of the day, after you reduce success down to its lowest common denominator, is that successful people get started, successful people work hard, and successful people get to the finish line. It is not that complicated.

One thing to keep in mind is that if you break up your major life goals into smaller, manageable, track-able tasks, and you successfully complete one task after another, no matter how insignificant it seems at first, you'll actually be fueling yourself mentally and emotionally. As an example, one of my life goals from the beginning of my entrepreneurial career was to create enough of a passive income stream where I would no longer have to work. In order to achieve that, I calculated exactly how much money per month I needed to support my family, and then I mapped out a plan on different ways I could passively generate that income. The smaller pieces to this goal have pivoted over the years but they always brought me

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one step closer to my overall goal. When I was working inside my independent tax practice, I had a mini-goal of increasing our return count each tax season. When I started developing tax offices across the country, my mini-goals were focused around increasing office count. Eventually, when I sold my offices, I was able to create that passive income and achieve my major life goal. Now instead of needing to work, I choose to work. I have the freedom to only take on projects that I love and am passionate about.

Each completed action or task will increase your sense of confidence, will boost your energy level, and will amplify your determination to keep going. If you don't have these little wins along the way, you run the risk of burning out and giving up. You may be better off just saving your energy and not starting at all if you aren't prepared to give it your all or see things through. If you do start, and you decide to quit (because quitting IS a decision), no one is going to pursue those dreams for you. That responsibility is yours and yours alone.

Think about your life so far. You don't need to fill out a fancy survey or talk to a business coach to do the following: take a moment to reflect on the last few years of your life, and you should be able

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to make a quick, on-the-spot self-assessment of whether you are someone who completes goals or someone who constantly starts new projects but never finishes them.

If you feel that you've let yourself down, that you've been dropping the ball recently when it comes to pursuing your passion or furthering your dreams, you have two options: (1) keep things as they are, and yield similar results, or (2) make a change in your life and start getting things done. It really is that simple (again, just don't confuse simple with easy).

One other thing to consider if you've been a procrastinator or a non-finisher: perhaps your goals are not really aligned with your dreams. Maybe what you're trying to accomplish is, deep down, not something you really care about. Sometimes society or the people around us do a really good job of convincing us to pursue a "worthy" goal, which, if we take the time to think about it, we realize doesn't really inspire us. And so we half-ass our efforts, we start and never quite finish, or we spend years procrastinating and agonizing about it all. So before you move forward, you need to ask yourself what you want in life, why you want it, and what you're willing to do (and sacrifice) to get it done.

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If it seems like I'm beating a dead horse on the topic of following through on your goals, it's because it's a point that bears repeating. This is an absolutely critical component of success. I've never met a wealthy, prosperous, successful businessman or woman who takes this notion lightly. If you want to achieve your goals, my advice for you is to follow their lead.

Every marathon, every business venture, every unforgettable trip and life-changing adventure begins with a single step: the decision to act. It's as simple as that.

If for the past few years you've been busy running around, bending over backwards for other people, toiling and sweating while making other people rich, it's time to pause, reflect, and think about the most important person in your life: you.

If you happen to be a selfless martyr who always puts family, friends, acquaintances, or business associates ahead of yourself and never indulges in a little self-reflection and personal development, just keep the following in mind: flight attendants instruct us before every take-off that if oxygen masks drop during an emergency,

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you are to place the mask on over your face before helping others, including children. This may seem counter-evolutionary or contrary to your value system, but if you're not taking care of yourself, you're ultimately hurting yourself (and reducing your ability to help those around you). By strengthening your mind and body, you are more readily able to help those around you -– be it family, friends, clients, or business partners. Focusing on yourself is not selfish; it is necessary for success.

Ask yourself a few critical questions. Are you satisfied with the course of your life? Are you happy? Do you feel fulfilled professionally? Are you genuinely connected to your work? Do you feel pride and a sense of ownership toward your job? Do you feel like your time and effort are valued and compensated fairly? Do you have the freedom to work and travel how you see fit, or does some angry manager boss you around?

It's easy to gloss over these questions; however, if you are looking to change your life, you'll have to answer them honestly. This is what soul-searching is, and they don't teach us about it in school.

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Since you're reading this book, you may have already done a bit of reflection. Thinking, however, can get you only so far. In fact, thinking alone will get you nowhere. You have to make the decision, and then act on it. Make the decision to pursue a business that gives you freedom and affords you a lifestyle of choice. One that saves you from the daily 9-to-5 drudgery and allows you to work toward your desired future. It's like the critical difference between renting and owning a house. When you rent, you're spending money that comes along with no tax benefits and no equity buildup while funding someone else's financial independence and freedom, and at the end of the day you're left with nothing. When you own a property, with each payment you're getting tax benefits and contributing to your own future.

When starting your own business, no matter the industry, be prepared to fail. You may not fail, but the statistics aren't kind: like my pizzeria, many new businesses struggle or close during their first few years of existence. Given that reality, accept that fact that you will experience failures, but when you do, fail fast. Make mistakes, learn from them quickly, and make immediate changes. Many large and seemingly successful corporations lack the agility to adapt rapidly. This is where small businesses will always have

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an advantage. If a marketing strategy isn't yielding the desired results, you can make tweaks on the fly. See what works. Abandon what doesn't.

It only took me a couple of weeks to get over my first business failure. I took it as a positive learning experience that taught me lessons on what not to do my next time around. Don't beat yourself up for past mistakes; your energy and focus are much better suited for building your next business instead of sabotaging yourself with negative thoughts.

***

Related Video: Happy Tax Industry Strategy Session 2 Planning for Next Tax Season

http://hpy.tax/TMH-planning

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Take-away: In business, and in life, failure is often a necessary first step, not a misstep. Maintaining focus on what matters will help you overcome obstacles and keep moving forward. Leverage your mistakes. Learn from your failures to become a stronger, wiser business owner.

Exercises:

Hone in on your goals.

Most exercises in this book will require mere reflection, but for this one, grab pen and paper. Studies have indicated that writing down your goals is one of the most crucial steps to achieving them. While you're writing your list, consider the following questions:

What are your business goals?

What are your personal goals and how will your business goals help you achieve them?

What kind of lifestyle do you desire? Why do you really want this lifestyle?

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What have you done in the last month to get yourself closer to your goals? If your answer was "nothing," what's one thing you could do today to help you inch toward your goals?

Are your goals specific or vague? Are you committed to your goals, or are you scatter-brained? Do your goals change frequently?

Are you totally fixated on a specific goal, or are you able and willing to slightly tweak your goal to adapt to changing conditions (e.g. politics, technology, etc.)?

When you're done with your list, post it in a place where you will see it and be reminded of your goals daily. Otherwise, you risk forgetting about them or relegating them to the back-burner of your life. Don't treat your life goals like a New Year's resolution that's forgotten by January 2.

Reflect on how you react to failure.

As I discussed earlier, coping with failure is a necessity for any business owner. Take some time to consider these questions:

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What is a major personal and/or professional failure you've experienced? How is this failure affecting your ability to achieve your goals?

Do you have any fears that are holding you back from success? If so, what's one thing you can do today to help combat this fear?

Have you observed or talked with successful business owners, professionals, and thought leaders in your target industry? If so, what did you learn? If not, whom can you contact today to set up such a conversation?

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Chapter 2Identifying the Opportunity

"Good things happen to those who hustle."

—Anais Nin

If you had asked in my early 20s what I would be doing with my adult life, never in a thousand years would I have guessed that I'd be working—happily and successfully—in the tax business. It just never crossed my mind. But as life would have it, not long after I started my garbage man gig, I learned about a local tax class that was being offered by an independent tax firm. Even though I didn't know the first thing about taxes, I took the class on a whim, thinking that I had nothing to lose, and only knowledge to gain.

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I took the class, learned the basics, and quickly realized that I was drawn to the business. If I hadn't taken that class, my life would be markedly different today. After taking the class, I leased a desk from the tax firm owner—and I was back in business. However, I didn't quit my job as a garbage man; rather, I saw the value of the part-time side gig as a way to earn extra income and shed my financial stress. If you've ever lived in New York City, you know that financial anxiety is so ubiquitous it's practically a fashion accessory. I didn't want to keep struggling, and I reaped the economic benefits almost immediately. Moreover, I was drawn to the profession because I loved helping people one-on-one.

Switching careers or quitting a dead-end job can seem liberating, but these moves come with a great deal of risk. I had three kids to support, so as tempting as it was, at the time I couldn't simply walk away from full-time income and benefits, at least not immediately.

The beauty of the tax business is that it can be done by appointments and can be started with part-time hours, which fit beautifully with my schedule. It allowed me to learn the tax business gradually, and offered a healthy way to supplement my income. In retrospect, mine was a relatively safe entry into the industry, although I admit I

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have become much more adventuresome in the years since. Fortune favors the bold, and those taking intelligent, calculated risks are often the ones rewarded. When you're in a position of financial dependence, insecurity, desperation, or general unhappiness with your work situation, it is wise to start small and to avoid rash decisions. A part-time tax business is a sensible way to venture into something new while still staying grounded in whatever other activities, jobs, and responsibilities you may have—and as your business grows, you can decide which of these you'd like to maintain or abandon.

If you are feeling stuck, be it professionally or personally, think back to Einstein's definition of insanity: "doing the same thing over and over again and expecting different results." Thinking or behaving the same way you have over the last 12 months has gotten you exactly to where are today. If that is a place of wisdom and success, congratulations. However, if it is a place of personal or financial obstacles, you'll need to try something different to overcome them.

The wonderful thing about trying the tax business is that nothing is set in stone. You are not required to work in the industry for the rest of your life. You can change your situation at any time. This is not to say that you should start job-hopping or opening random

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businesses just for the fun of it—just be reminded you that you have more power over your situation than you think. If something is not working in your life, because it's sapping your energy or sidetracking you from your long-term goals, it is both your right and your responsibility to change it. If you don't do it, who will?

Starting out in business as a side gig is a sound way to earn extra money, dabble in something new, and grow your expertise before jumping in full time. A big part of taking calculated risks (key word "calculated") is to not totally jump from one thing into another without some first-hand experience first. I encourage you to pursue any new opportunity on the side to validate (or invalidate) it as a good idea and decide whether it works for you or not. You may find that it is something that you love (like I did with the tax business) and may end up making nice profits and building up a scalable business. Or you may end up not feeling that it is a good fit. The great news is that in the tax business it doesn't have to be a risky proposition in order to find out. You don't have to give up stability in order to give it a shot.

While it's critically important to solidify a concrete goal in your mind before moving forward, it's also true that goals often change

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over time. Many entrepreneurs will tell you that they had to evolve their goals because they achieved their initial objectives faster than expected, or they had to tweak their expectations and strategies when some major societal, technological, or governmental wrench was suddenly thrown into the mix. As an entrepreneur, you must have flexibility about the specific details of your goals, and be able to adapt to changing conditions.

Survival of the fittest means that those who adapt most quickly are most likely to not only survive, but to thrive. This applies to nature and to business alike. It's important, however, not to confuse flexibility with vagueness or with being scatter-brained. You should have a clear goal in mind, and focus on it relentlessly, tweaking it only when the circumstances require doing so. Having goals that change daily, or having vague goals, will keep you in a permanent state of chaos and confusion. You'll never quite be able to tell whether you're on track, and you'll waste precious energy getting nowhere.

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***

Related Video: Happy Tax Industry Strategy Session 26

The reason your business is not growing

http://hpy.tax/TMH-growth

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Take-away: Try new things. Consider taking on more than one job—you won't be the first to do so, or the last. Avoid reckless risks and consider calculated ones. Insure yourself financially. Arm yourself strategically and logistically. Prepare yourself mentally. Move forward. And as you do, figure out what works for you...and what doesn't.

Exercises:

Are you a creature of habit, or do you constantly seek new thrills? How does this affect your ability to achieve success in business?

What is one obstacle you currently have in your professional and/or personal life, and what have you tried in the last month to overcome this obstacle? If your answer is "nothing," what is one thing you could do today to start conquering the issue?

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What is one action you'd like to take in your personal or business life but have not taken because of fear or another excuse? If the tables were turned, and I had given you the same situation or excuse, what advice would you give to me?

Small acts of courage can help build overall confidence. Consider Eleanor Roosevelt's decree: "Do one thing every day that scares you." What is one beneficial thing you did today, or could do today, that is outside of your comfort zone?

Along with your goals from the previous chapter, consider writing Roosevelt's quote and posting it in a place around your home where you will see it daily. You owe it to nobody—except to yourself.

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Chapter 3 Lessons and Pitfalls from My Early Years in the Tax Business

"Even though the future seems far away, it is actually beginning right now."

—Mattie Stepanek

My beginnings were humble, as beginnings tend to be. I had my foot in the door of the tax business. I didn't have a grand office, or tons of disposable cash, or tons of experience in the field. But what I had was more important. I had drive. I had plenty of motivation. I believed in myself. Anyone looking in from the outside might've seen my desk and would probably not have been very impressed. But despite my modest circumstances, I was

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determined to make this new venture work. No one could have taken that resolve away from me.

When taking on a new job, a large project, or any professional or even personal responsibility, sometimes we tend to complain with a list of excuses or fantasize about what we could accomplish if we had more time, more resources, or a larger staff to help us out. The thing is, I was a staff of one. My customer service specialist, my tax preparer, my marketing manager, my sales guy—they didn't exist. It was all just me. I didn't have the luxury to hire anyone at the time, so I did the next best thing: I did it all by myself.

Most of us have heard the adage that through adversity comes strength. Struggle leads to accelerated learning if you keep at it, but it leads to failure if you decide to give up. Even though I was alone and had a full-time job at the same time, I kept working my side gig. I kept hustling. And slowly but surely, my list of customers grew. It was proof that I was doing something right.

My customer service skills were, and still are, a source of pride for me. Good customer service is the foundation of any business, and this is certainly true in the tax preparation industry. I made sure

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to provide the most competent, efficient, courteous, and caring service to anyone who walked in the door.

While the customer interactions were going well, I realized that some things were not. Since I was a one-man show, I was spending too much time on tax preparation and data processing. This was eating into precious time that I could have spent on marketing, sales, and business development—the most critical aspects of any new business. It wasn't that I was lazy. I was working my tail off. Working hard, however, does not always yield results. While it is absolutely important to prepare the tax return and process all the data correctly, these tedious tasks were not contributing to my business growth. They were simply sapping me of my energy and my time.

When you start out in any business, especially if you have a very small team or you are a solopreneur, you should be very aware and very critical about where you're spending your limited time. You may appear occupied, running around to and fro doing tedious "busy work," but if those efforts are not helping you identify new clients or attract new business partnerships, you're setting yourself up for failure from the get-go. It's slightly ironic, isn't it? The harder you work on those menial tasks, the less successful you'll

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be. There's a reason for the phrase "Work smarter, not harder." So, from the very first day of your business, take great care to ensure that you are devoting ample time to the things that actually help grow and improve your business. Of course, you can't have a sustainable business without great customer service, but if you neglect sales, marketing, and business development, pretty soon you might not have any business left at all.

In order to take on more clients, I realized that I had to be more efficient with my time. But there is only so much you can do to speed up the tax return process when you're doing it alone. I've surveyed many tax preparers over the years, and when asked how long it takes to handle a simple tax return with a single W-2, some preparers told me "as quickly as 15 minutes." And if you had asked me the same question when I was working in high gear, I would have said "I have done them as quickly as in 7 minutes." But the truth is, even the simplest tax return takes more than a few minutes. From the time a customer walks in the door, provides their requisite tax documents and all of their relevant information, asks questions, and makes their comments, to the time it takes for a tax preparer to enter the information, print it, review it with the customer, finalize it, and prepare it for electronic signature and

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submission—all this can take anywhere from 60-90 minutes. And if you have a chatty customer, forget about it! This estimate doesn't include any subsequent time spent for any possible IRS rejections and the like.

Time management is critical in any new business. A useful way to gauge one's efforts as a business owner is to itemize all of one's activities in a given day or week, and assess which ones are helping the bottom line. See, back then, I thought I was working hard, but in truth most of my time was not actually spent on revenue-generating activity. I was simply too busy processing each client's tax return, leaving me with little time or energy to source new customers and grow my business. I was stuck in the weeds, and losing sight of the big picture. This is a mistake I've seen far too many new business owners make during the first few years, and it's a costly mistake that can spell the difference between a business surviving or failing.

In hindsight, part of my problem was the very business model of my first tax business: it was flawed and inefficient. I couldn't delegate my tax return processing, because I was alone. I had to do it all alone, and in so doing, I risked it all. I loved interacting

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with customers, enjoyed hearing about their lives, genuinely liked helping them and providing a high level of service to make sure their tax questions were answered and their tax-related needs were met. But all this took away time and effort that should have been spent on marketing and sales—and, of course, I still had my full-time job and a family to juggle.

Even if I had thought of delegating the tax return process to someone else, it would still have been inefficient. If I had hired a tax preparer to replace me while I marketed away, the employee would have spent the same amount of time (or possibly a little longer) handling each tax return. I didn't fully appreciate it at the time, but the core problem was that it was highly inefficient and wholly counterproductive to have the customer service person be the same as the tax preparer. That fundamental flaw in the business model eventually became the inspiration for a smarter, leaner, and more natural way to process tax returns in an assembly-line fashion. And so, years later, based on the lessons learned from this frustrating process, the Happy Tax model was born.

With the IRS tax code becoming ever more convoluted with each passing year, nearly ninety million Americans each year rely on

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professional tax preparers to help them navigate the muck of rules and regulations. And while Certified Public Accountants (CPAs) and Enrolled Agents (EAs) are highly qualified for that task, they don't always know how (or want) to deal with customers directly. Sometimes, their customer service skills may be just okay, but it's not their forte. Or they may simply want to maintain efficiency and focus on the data processing component of tax preparation, leaving the customer interaction to others. Happy Tax marries the best of both worlds, pairing customer-savvy franchise owners and independent contractors with tax-code-savvy CPAs who work behind the scenes. Happy Tax's business model enables entrepreneurs to work on their business instead of in their business. They spend their time on the three most important things a business owner can do—which, again, are sales, marketing, and business development. Too many entrepreneurs get caught up in the little stuff and don't focus on business development, which is the only way that the bills get paid and the profits roll in.

Whether you affiliate yourself with a brand or go the independent route in your tax business, make sure you and your staff all spend your time on what you do best.

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***

Related Video: Happy Tax Industry Strategy Session 20

Why it Sucks to be a Tax Preparer

http://hpy.tax/TMH-preparer

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Take-away: When you're starting a small business, focus primarily on revenue-generating activity, not on busy work. Find opportunities to tweak your process, improve your service, and elevate your team. Ultimately, focus on working smart, not hard. (Or, better yet, work smart and hard.) To build your business and get to the next level, acknowledge your limitations as well as your strengths. Do what you do best, and build a team capable of filling in your gaps.

Exercises:

Do you have a tendency to lose yourself in busy work to avoid boredom? If so, what can you do to change that?

Think about the most recent week. How many of your business activities were revenue-generating? How many were not? What can you do to change the ratio for your benefit?

What tried-and-true marketing and sales efforts have you increased recently?

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What new marketing and sales activities have you experimented with recently?

Are there ways to make your business leaner? For example, what activity or task can you afford to delegate, outsource, educe, or eliminate from your daily or weekly schedule and still be successful?

Think of one thing about your business that isn't working right, or is causing you some headaches. What can you do this week to try to improve the situation? What might happen if you decide to do nothing about it?

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Chapter 4Succeeding Within a Franchise Framework

"I am always doing that which I cannot do, in order that I may learn how to do it."

—Pablo Picasso

Well, I'll be the first to admit that I once had no interest in franchising. Maybe I understood how the franchise model worked, maybe I didn't. But either way, it wasn't attractive to me at the time I was first introduced to it. When I first started out working in the tax industry, I was proudly (read: stupidly) doing it all on my own. I didn't know any better! I was single-handedly marketing, promoting, serving customers, preparing and filing tax returns, and handling all administrative aspects of the business. In

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some ways, being able to do everything by myself was a source of strength and pride, but really it was because I knew no other way.

While I toiled along, working hard and sometimes inefficiently but always with great ambition, I was eventually approached by one of the large national franchise brands to convert my business to them. They had contacted me with mass marketing many times over the years; however, prior to the real estate market collapsing I never paid them much attention. I realized I must have been doing something right when they recommended that I buy one of their larger offices. Even though the deal fell through in the end, it served as validation and a bit of an ego boost for me. The deal was a double-edged sword. On the one hand, a large, publicly traded company wanted to do business with me. This helped me realize how much I was doing right. For years, this Fortune 500 company was buying back its franchises to become company-owned stores, and yet they selected me to purchase one of their company store offices and convert my office over to their brand. On the other hand, I knew very little about franchising and wasn't sure if it appealed to me.

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It was the first time that I had negotiated with such a large company. There was some disconnect between me, a scrappy entrepreneur, and them, a massive corporate entity with layers of employees. While ultimately the deal wasn't done, I still truly respect their company as a leader and pioneer in the industry (albeit one that has lost its way in recent years). The entire experience did, however, get me thinking about the benefits of franchising. After giving it some thought, I decided that I could indeed benefit from the backing of a national brand; from its proven system, resources, training and support—and shortly thereafter I converted my tax office to another national franchise.

Transitions can be difficult. But I was determined to make it work. At this point in my life, I had very little patience for excuses, particularly my own. So I took advantage of the established infrastructure and proven process at the franchise I converted to. I totally immersed myself: I watched every available webinar, read every page I could on the company intranet, dialed into every conference call, and attended every event—near or far. Even with my previous success as an independent tax preparer, I knew I had a lot to learn. I was not afraid to seek help, ask questions, and utilize resources.

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In business and in life, we sometimes have to fight tooth and nail to get our fair share of resources. Sometimes we have to pay an arm and a leg to obtain highly valuable training materials and support. Or we have to prove ourselves first in order to earn the time and the respect of esteemed mentors. But just as often, the valuable resources are free (or low cost) and readily available. Yet even then; some people will fail to take advantage, making excuses or complaining instead of actively taking the chance to learn. But I was determined, grateful, ready and willing to learn. No excuses for me.

I absorbed as much information as I could. The sheer amount of resources was astounding compared to being an independent. Occasionally, it even felt like information overload, but that's why I networked and learned from other franchisees and company leaders, forging new friendships and professional relationships alike. There is a lot you can pick up alone, especially if you're driven and prefer self-paced learning, but you'll never learn quite as much or quite as quickly as you can while interacting with successful people directly. So that's exactly what I did. I found colleagues

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and identified those who together helped catapult my tax industry knowledge and business skill set to the next level.

Even though we sometimes think we know it all or have all of the answers, following a proven system is in many ways a better way of doing things. Anthony Lolli, a friend of mine and CEO of the Rapid Realty franchise company, has said, "You have to ask yourself, do you want to be Steve Jobs, or do you want to own a couple of Apple stores?" I see many want-to-be entrepreneurs thinking that they'll be the next Steve Jobs. I'm not one to focus on the negatives; however, the harsh reality is that this is extremely unlikely, and if you base your entire life and identity around that desire, you'll probably be disappointed. For most of us, making a living, taking care of our family and doing something we love will have to be enough. And what's wrong with owning a successful small business? It is what drives the economy of this wonderful country of ours.

I had to make a decision. Would I keep chugging along on my own, or would I align myself with a franchise to get access to some additional resources and give myself a better shot at growing? I chose the latter, and once I did, I did so with gusto. And although I had clearly had some success in business prior to this point in my

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career, I didn't allow myself to think that I always knew better. I followed the plan provided to me (with a few tweaks for my style of business) and did so aggressively and with passion.

Some life lessons can only be learned on your own; however, most business skills can be acquired simply by listening to those who have succeeded before us. There is no need to reinvent the wheel. It's awfully painful, time-consuming, and even embarrassing to make mistakes that can easily be avoided if you just follow the time-tested advice, training, and support from others who have successfully grown their businesses, those who've "been there and done that." When I was learning from my veteran colleagues and mentors, I made every effort to put my ego aside. I simply opened my mind to new ideas, processes, and best practices, absorbed as much as I could, and (here again is what separates the winners from the losers) immediately began to put into action what I was learning.

***

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Related Video: Happy Tax Industry Strategy Session 11

How to Set Up a Tax Preparation Business

http://hpy.tax/TMH-setup

Take-away: Don't be a lone wolf. Leverage all the resources available to you as part of the franchise network or even just get linked with a community or two online that can become a support mechanism. Franchises are best as the interests are more clearly aligned when everyone is part of the same team. Seek support from successful colleagues and other entrepreneurs. Observe the competition. No man is an island, and the same goes for tax businesses.

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Exercises:

Who is your mentor or thought leader in general business management?

Who is your mentor or thought leader in the tax industry?

Who are your business colleagues with whom you can share triumphs and obstacles, bounce off ideas, and motivate each other?

What are the resources you've taken advantage of so far? What are the resources or support systems you'll take advantage of next? Jot these down, with specific deadlines and make a note in your calendar.

How do you keep up to date on the goings-on of the tax industry (or other relevant business news?) Who or what helps you navigate through the endless sea of business-relevant information?

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How long does it take you to process and activate new information? What's one thing you learned recently? Have you put it into practice, or are you simply thinking about it? What's one thing you can do today to convert that thought into action?

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Chapter 5Laying the Groundwork for a Successful Tax Business

"The time to repair the roof is when the sun is shining."

—John F. Kennedy

Whether you're still only thinking about launching your tax business, or you've already started and find yourself in the chaotic throes of the launch, one thing to pay close attention to is the very groundwork of your enterprise. This is pure architecture: a house cannot stand long if the foundations are shaky. The same goes for your tax business.

When starting your business, you can think about it in two parts: internal infrastructure and external communications. Internal

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infrastructure includes the organizational, financial, legal, IT, and administrative aspects of your business. External communications consist of everything from your customer service to your sales and marketing; these are externally-facing activities that establish your credibility, authority, and trustworthiness.

If the internal infrastructure of your business is unstable, vague, inefficient, or disorganized, you'll be spending too much time on administrative tasks at the very start of your business, and you'll waste precious resources (time \+ money \+ energy) that should be largely focused on sales and marketing. If you keep this up, and somehow you're lucky enough to see your business grow, the initially small inefficiencies become greatly magnified, because now you'll have to support more customers, more employees, and more transactions using an unstable, un-scalable process.

Your external communications are just as important. They create first impressions in your community, and as we all know, first impressions are extremely powerful and very difficult (although not impossible) to overcome if they are not positive. If you make a positive impression when launching your business, in your client interactions, and in your advertising, you're likely to be seen as a welcome addition to the neighborhood. But if you start off on the

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wrong foot—for example, through weak, inefficient, or negative marketing, or through a few unpleasant client interactions early on—you probably aren't going to make it very far. If you start with a bad first impression, your reputation is likely to spread (or worse, go viral) in a detrimental way, and you'll waste all of your time doing damage control rather than growing your business in a natural, healthy way.

These thoughts aren't intended to scare you. I'm only mentioning them to remind you that during the first phases of your business (from pre-launch through launch), a little planning and thoughtful effort will go a long way and will save you money, time, and headaches.

For example, when choosing a local bank for your tax business, take the extra time to consider a few factors that can accelerate your success. Identify a bank with locations that are geographically convenient for you and your clients. Consider banks that offer check cashing for your clients, and who may even offer such services at a reduced rate. Additionally, banks that provide easy online access with automated bank feeds for transactions will prove useful to those clients who are technologically savvy and prefer to provide

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their tax-return-related transactions virtually to you if they are self-employed. These items may seem small and insignificant, but every detail counts. The smoother and more convenient the experience is for you and your clients, the happier they are and the more successful you will become.

Also make sure to insure yourself, your business, and any business-use vehicles or other property (e.g. office) to save yourself big money and big headaches down the road. While the minute details of insurance are beyond the scope of this book, you can always reach out to insurance professionals, more experienced colleagues, or even our Happy Tax franchise operations support team at ops@happytax.com for more information on insurance best practices. Be informed. Be prepared. Sleep easy at night.

When it comes to marketing collateral, you don't need to spend huge fortunes. Start small by investing in business cards. The best advice is to keep them simple and easy to read. A fancy business card with curly, rainbow-colored fonts may seem like it will make you stand out, but if your clients can't quickly skim it for the necessary contact information, it might only cause them a visual headache. Sure, you can get creative with your business cards to

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attract more attention, but it's best to aim for three basic qualities: simple, professional, and easy to read. You shouldn't be spending hours or days designing colors and fonts for a business card—leave that up to the creative design experts. Your time should be spent talking to people, giving out your cards, and asking for referrals. Now that's time well spent for an entrepreneur.

Any business start-up requires a lot of attention to detail. From marketing to administrative tasks, and everything in between, there are a lot of details! One way to keep track is to use a task checklist. You can get fancy with a pretty Excel sheet, but if that takes too much time, you're better off writing just it on a piece of paper, and keeping it in a place where you can easily and frequently refer to it. I use the Notes application on my Mac. Break down major projects into smaller tasks, and complete the tasks one by one and delete them. Try to structure the tasks in such a way that you can complete one or two each day—that way you'll have a greater sense of achievement and motivation to keep going forward (that's just how human psychology works). I use what I call the 3-5 minute rule for most tasks. When something comes in that needs to get done and will only take 3-5 minutes, I do it immediately so I won't have to add it to a long list of to-do's. This has served

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me well in working on multiple projects and growing businesses over the years. It is especially important to prioritize tasks that, when delayed, will slow someone else down (a provider, vendor, or employee), such as if you keep them waiting to hear back from you before they can proceed with their own tasks.

If you're naturally organized and self-disciplined, great. But if that's not you, you'll need be proactive to do something about it—there are countless solutions and tips online for how to get organized and fight off procrastination. You can use task sheets or phone apps, you can be accountable to a business partner or friend, etc. There is no right or wrong way, as long as you commit to moving forward and keeping tabs on the projects and tasks that matter most.

Finally, if you have a few customers trickling in right before the official launch of your business, that's a great time to do some investigating. Make sure to follow up. Ask for preliminary feedback. Their perception of their experience with you is critically important. It will help establish the credibility and reputation of your business in the community. While a single customer incident usually won't make or break you, it can significantly hurt or help

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you. Ask the early (or prospective) customer what they enjoyed about the experience, and then dig deeply to understand what could be improved. Don't wait hours, days, or weeks to follow up. People's memories aren't perfect. The most effective feedback happens right after the business interaction—that way you can nip any issues in the bud right there and then, or at least be aware of imperfections before they grow into overwhelming obstacles.

All business owners have blind spots. It's the only way for you to make changes early on and improve the quality of service. It's unwise to assume that everyone is happy just because a customer leaves with a smile on their face. Keep in mind that some people are naturally polite, and won't share their opinions unless prodded. Yes, even in big cities like New York, Chicago, or San Francisco, not everyone is vocal to your face. If they've had an exceptionally good (or bad) first interaction with you, they'll probably tell their family, friends, and possibly millions of people online via blogs, Yelp reviews, etc. Treat every customer well. Every single one.

***

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Related Video: Happy Tax Industry Strategy Session 7

Build Relationships with Prospective Tax Customers

http://hpy.tax/TMH-build

Take-away: When you start setting up shop, every detail counts, but take care not to drown in the details. Remember that sales and marketing are the most important functions of keeping your business afloat, but alone they're not sufficient. You'll need to make sure your customer service is on point, your office looks presentable, and your software is up and running. To make things easier, maintain a checklist. Dot your i's and cross your t's. You don't want a small detail to be your undoing.

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Exercises:

Create a checklist of all the important items that will help your business launch successfully. Just don't spend days creating the checklist. Spend the majority of your time completing the items on checklist, and you can always tweak as you go. Don't let perfection stand in the way of progress. Keep this checklist within reach. Track progress daily.

Using the above checklist, highlight any items that you're procrastinating or ignoring. Ask yourself: What's blocking me from moving forward? Is this item scary or difficult? Do I need to break it down into smaller tasks and tackle them one by one? Is this item truly necessary for the business? If it's not revenue-generating, can I completely dismiss it, or decisively postpone it to a specific date down the road? Don't let anything hang over your head and cause you undue stress. It's not worth the headaches or sleepless nights. Tackle your problems head-on, step-by-step, and you'll start seeing results almost immediately.

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Take any of your launch-related marketing materials (everything from business cards to pamphlets and ads), and have a couple sets of eyes review it—not just for typos, but also for the design, and the overall impression. But remember that too many cooks spoil the soup, and not everyone's opinion is reflective of the majority. You don't need to make every change that every person recommends, but do listen to others, weigh their input, and act accordingly.

Answer the following: What are you most proud of with the launch of your business? What is going well for you?

Consider: What is the source of your greatest stress? Now think this through: what is one thing you can do about it today? Can you come up with a temporary solution alone? Can you consult a colleague or mentor? The worst thing you could do is nothing, and let the problem eat away at you or paralyze you.

If you have initial or prospective customers, make sure to follow up. Ask them what they enjoyed, and dig a little

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deeper to understand what they didn't like about any part of the interaction with you/your business.

What is your game plan for following up with customers over the long haul, once your business is fully up and running? Who will conduct the follow-up (you or your employees)? How soon after the interaction will you conduct the follow-up? Will it be done in person or over the phone? How will you collect and record the feedback? What will you do with the feedback once you've received it?

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Chapter 6Building and Nurturing a Team

"Talent wins games, but teamwork and intelligence wins championships."

—Michael Jordan

Even the smartest, hardest-working, best-connected entrepreneur will fail if his team is mediocre. I've always felt this to be true. Over the years, I made sure to hire the best possible team members, and there was no single path to that goal. Instead, there were dozens of different ways I went about building our teams. One tactic that has always worked well for me is to do massive marketing campaigns seeking employees, not unlike the marketing that I used to attract prospective tax customers: I've

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used Craigslist, the PTIN list, Career Builder, and Monster, along with email marketing and Facebook ads, direct messaging, and phone calls to attract the best caliber of candidates.

In addition to online marketing, word of mouth will always be a key source of talent. Quite simply, when recruiting, I ask everyone I knew whether they (or anyone they know) are looking for work or a new opportunity. And it works! Remember, the power of word-of-mouth referrals is huge, and it helps you attract a higher quality of candidate because, in general, the friend of your trustworthy friend will likely also be trustworthy. A third method I utilized frequently was recruiting individuals whom I met in other service-based businesses (e.g. waiters, cashiers, or retail specialists) who were comfortable and people-friendly.

After expanding my tax business from an office location to a retail location, I needed to hire approximately 15 tax preparers within a couple of weeks. Using the first method (online marketing), I was able to draw about 50 people to attend a tax school I was operating. Many of them came from Craigslist. Of the 50, I was able to cull out the best and politely thank the rest. When it comes to recruiting for tax preparers, it is always a good practice to start early and to

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market aggressively because, as with any job opening, you'll have to comb through a lot of lackluster candidates before you come across the brilliant gems. Additionally, many of those that register for and start a tax school won't finish it for a multitude of reasons. Finding the right candidates is a time-consuming process, but it is worth it if you need to hire tax preparers for your business. Having the right people will make all the difference between a successful tax season and a season full of headaches.

Looking back, some of my best hires have come from the third strategy (recruiting candidates from other service-based businesses) because they demonstrated the right attitude from the get-go—they didn't have to be taught it.

One of the sweet benefits of my current endeavor, Happy Tax, is that our franchisees and independent contractors do not need to worry about hiring tax preparers, since Happy Tax's licensed CPAs take care of the tax prep work so our owners can focus on business development. One of the biggest challenges in the traditional tax business is finding tax preparers who are great at customer service and have great tax preparation knowledge. Typically, people are good at either one or the other of those skills. This is the primary challenge that led me to create the disruptive model at Happy Tax

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model that separates those two roles so everyone can specialize in what they do best.

Some of the larger corporations out there have giant human resources teams with burdensome processes, overwrought procedures, and territorial HR specialists for every function imaginable, from recruiting and benefits to training and employee relations. But when you're your own boss, you get to be your very own HR department! Now if that sound a little daunting to you, it shouldn't. Having this level of responsibility affords you a great deal of autonomy. It gives you the freedom to hire and develop a dream team, whether it is tax preparers or independent contractors who will source tax returns for your organization.

In some ways, the health and success of your business relies more on your team than on you. Your job is to select the right people with the right skill set, and then to properly train and manage their performance. Even if you are the most amazing customer service champion, or the most competent and efficient tax preparer in the world, if your team members are slow, unmotivated, unethical, or unskilled, they will be the weak link that brings down your business. All that hard work going down the drain—such a shame, isn't it? Don't do that to yourself.

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When hiring, how do you know who will fit in and perform the job well? You don't, at least not with absolute certainty. You can't see the future and predict every employee's performance. There are, however, a few things you can do during the hiring process to increase the chance of finding the right candidates for the job.

One mistake business owners and hiring managers sometimes make is when they try to clone themselves. They comb through the applicant pool in search of someone who is just like them. Who thinks like them. Who acts like them. This is a problematic move. It's very difficult and quite time-consuming to find someone similar to you. After all, people are unique. And if you find someone who is too much like you, you may end up stepping on each other's toes too often, or becoming too critical of each other, or perhaps even becoming bored. More importantly, if there are too many clones of you in the office, you risk a depletion of experience, skill, and creativity. Everyone becomes redundant.

Instead, consider identifying people who share certain core values with you—like a solid work ethic and strong people skills—and who have something a little different to offer. Perhaps they are more process-oriented than you, or more creative, or more tech-savvy.

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Think of skills that will complement the abilities of you and the rest of the team. It's not just diversity for the sake of variety—yes, it can make more a more fun work experience, but it also strengthens the arsenal of available skills that your team can leverage when faced with any business challenge. Just think of your action movie dream team: would you rather have 5 really savvy IT guys, or a group that consists of an IT guy, an acrobat, a professor, a chef, and a professional racecar driver? The possibilities with the latter group are endless. As long as every team member is fundamentally responsible, motivated, and competent, your chances of success are much higher with a well-designed team.

Another pitfall when hiring is to focus too much on any one résumé keyword or specific experience. Personally, I pay very little attention to résumés. It might seem odd when interviewing someone and they reference their résumé like you have studied it, when you may not even have glanced at it, but for me, it is about time management. Analyzing every résumé is a waste of time because some people won't even show up to their interviews. Or they might look great on paper but aren't a good fit for other reasons. You're not necessarily looking for people who have already done exactly what you are hiring them to do, which is the bulk of what

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you'll learn from a résumé. Instead, you're better of finding people that are highly motivated, willing, and able to learn whatever task or process you delegate their way. People who have demonstrated creativity, hard work, and a positive attitude in the past are often the strongest candidates, because they'll quickly pick up any new lingo, assimilate into any new industry, etc. The specifics are not an issue—these types of folks will handle virtually any challenge with open arms.

When hiring for customer service roles, pay extra close attention to the candidate's attitude and personality. Sometimes attitude and personality can be one and the same thing. Other times, they can be dramatically different things. Someone can have a very friendly and engaging personality under normal circumstances, but when stress begins to mount or when they are confronted with an unexpected situation, a negative attitude takes over.

Personality is one of those things that changes very little with time. Mellow people tend to stay mellow, neurotic individuals tend to stay neurotic. Happy people by default look on the bright side of life, detail-oriented people don't suddenly start ignoring details. Of course, some people tend to clam up during an interview, which

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can make it difficult to assess their personality, so keep that in mind and consider conducting a casual interview in a coffee shop or the like to put them at ease. Overall, customer-facing people should have personalities that are warm and inviting, natural, confident—characteristics that put customers at ease. Beyond that, it's just quirks, and everyone has them to some degree: some people are a tad more assertive and salesy, while others may be more calm and collected, and still others might be slightly sassy and comedic.

Don't get caught up thinking that one type of personality is better for your business than another. Instead, be open to the variety of the human spectrum of personalities. A given customer who walks through your door may respond well to one type of personality, and not so well to another—if you have both types of employees, you can direct the customer accordingly. That's the benefit of not having clones as employees.

There is always a risk with hiring employees, since there's a chance they will turn out to be incompetent, negative, or downright lazy. One way to mitigate that risk is to do a test run. Instead of asking the customer service candidate how they would greet a potential client or asking a tax preparer some basic tax code questions,

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consider having them do the real thing (you should even pay them accordingly for that tiny bit of work). For example, you could have the customer service candidate walk outside, approach a few people on the street, and tell them about your business, or let them take some inbound phone calls to your office. Don't just listen to what they say (the spiel may not be perfect right off the bat). Instead, watch how they move, how they speak, and how they interact with the other person overall. These exercises will demonstrate if the candidate has the "soft skills" necessary to succeed.

***

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Related Video: Happy Tax Industry Strategy Session 9

Surround Yourself with the Right People on Your Team

http://hpy.tax/TMH-team

Take-away: Take special care to hire the right team of employees with strong people skills. Specific skills and knowledge can be trained, but a positive customer service attitude cannot be taught.

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Exercises:

What are your strengths as a business owner or manager? What are your gaps or weaknesses? What skills do you want represented on your team?

How and where will you search for prospective candidates? When? Take a look at ads that your competitors may have posted online. You are competing against them so you need to know which are good and which are bad. Use that information on how to make your ads better.

What will you do during the interview process to ensure that you're testing for (and not merely talking about) specific skills in each candidate?

What will your organizational chart look like? Is your business funded and ready to make multiple hires or are you just starting out by yourself? Are there ways to bring in partners or join an established brand that can give you the resources of their employees and infrastructure so that you don't have to build your own?

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Write yourself a wanted ad (old-school-style like the Wild West wanted ads). Put down all of the characteristics of the team member(s) that you want. What skills do they have? What will their roles be? What personality traits will they have? Consider which things on your list are required and which are wishful thinking. Use this wanted ad as a template for the person you are setting out to find, then go find them.

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Chapter 7Simple Marketing Principles to Grow Your Business

"Business has only two functions—marketing and innovation."

—Milan Kundera

During my first year in the tax business, I prepared under 100 tax returns. I still didn't have my own office, just a small subleased desk within another office. I still had a full-time job hustling as a garbage man. And I still wasn't doing any large-scale marketing. I had no signage at the front of the office. And yet, things were moving along. All of those returns came from word of mouth, from me simply talking to friends, family, co-workers, and people in the community, and getting referrals. Simple—and free! I put out a couple of flyers on occasion, but that's about it. At

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this point, you could hardly call it a business. If anything, it was a hobby. A professional experiment. I was just trying things out. I didn't even decide that I was going to prepare tax returns that year until the end of January.

The following year, the number of returns doubled. Nothing had really changed, and yet the numbers were climbing. The power of referrals was making itself clear. Encouraged by the growth, I put out a few more flyers and started dabbling with email marketing. But this was still relatively low-effort, and I was treating the whole thing like a side gig.

The next year, I almost tripled my clients from the previous year! I had completed the process of what is known as an MVP (Minimum Viable Product). In the tech world, this is typically done to test new features, even if they aren't complete, or to validate business models. In this scenario, I tested the waters of my new venture to make sure it was something that I wanted to do long-term before I went in deep with office rents and employees. It helps you take guesswork and turn it into a calculated risk. This third tax season, I had arrived at a point where things were getting more serious, and I could no longer pretend this tax business was a mere hobby.

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So I made the decision and went on a leave of absence from my full-time job. This wasn't guesswork. I knew that I had a growing business and steady revenue. My business processes were built out and customers were happy and referring more customers. The risk was mitigated compared to the potential scenario of quitting my job three years earlier, when I wouldn't have known if I liked the business or was any good at it. A calculated risk is much different than a risk with no basis or backing of data to know if it will pay off at all. Having some initial successes made the choice easy for me. I was now a bona-fide and full-time tax business owner! Without the safety net of my full-time salary, pension, and other sweet benefits, it was now time to sink or swim.

Using simple promotions like "refer a friend and get either $20 or $50 cash in the mail," my business kept growing steadily (yes, I sent cash in the mail for the wow factor). At this point, I could have tried to continue to handle all the returns myself; however, then I wouldn't have had time to do anything else or grow my business (remember the important trifecta of sales, marketing, and business development!). I realized that I had to stop preparing and processing the returns with my own two hands. I hired preparers to handle the bulk of the work, and I simply checked the returns

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for accuracy. After their preparation, I greeted each customer to let them know I was standing behind their return, double-checking the work, and answering any questions they had.

It was also at this point that I moved into my own commercial office. No, it wasn't a large or beautiful space in a busy part of town. Instead, it was a modest, second-floor location on an intersection with virtually no foot traffic. Crazy, eh? Remember, all of my business was coming from marketing (e.g. referrals, flyers, and emails). Some people have a tendency to complain that their office is not in an ideal location; I never let that become an excuse. Excuses are a waste of energy and time. They get you nowhere.

At the same time, from the same office, I established a small mortgage company. This was near the height of the real-estate boom, and we were already providing credit repair services and getting referrals from those in the mortgage industry. My base of tax clients were asking for mortgages, and I made the decision to bring them in-house instead of referring them out. I made the decision to diversify into this additional vertical as I no longer had the steady income of my city job coming in and I had rent and employees that I had to make sure were paid. My business model

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was now more efficient than doing it all myself, as I was leveraging others. There were still more improvements coming in the future. As you can tell, the entrepreneurial bug was biting me hard. I no longer had a full-time job as a garbage man to take away my precious time or strength, so I began to devote all my newfound resources to developing my new businesses. If you really love what you do, and you're working for yourself, you'll dig deep down and you'll find extra reservoirs of energy that you'd never find if you were working for others. Ask any successful entrepreneur in any industry, and they will likely tell you that, even though it's hard work, working for yourself is so much more rewarding, and often doesn't feel like work at all (even though sometimes it feels like hell). It's different from a 9-to-5 mindset where most folks are just staring at the clock waiting for 4:59 to become 5:00.

In my fourth year in the business, I ran a promotion offering new tax clients their first year of tax preparation with me for free for simple returns, and I continued to push the $20 and $50 cash referrals. I came up with this promotion prior to another national chain introducing their Free 1040-EZ program years later. Did they steal it from me? I doubt it, but who knows. I've always been a transparent businessperson because it comes down to execution.

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Other national companies have stolen ideas from me; however, they didn't execute. I think of it this way: ABI (Always Be Innovating), whatever others are doing or not doing. I grew by approximately 50% in return count that year. I did all this while running my mortgage and credit repair companies, and I even found time to start two real-estate rehab projects in New York City. Juggling all these responsibilities didn't feel oppressive—I happened to enjoy it. It gave me energy. If it sounds like something that would wear you out, you might not be an entrepreneur at heart. That's fine! The important thing is to do something you love, and I love creating businesses from nothing. That's my passion. At this point, while I could have focused all of my time and energy on the tax business alone as it was growing successfully, I figured a little entrepreneurial variety wouldn't hurt. Now, serial entrepreneurship of this kind may not be for everyone. Some people are more comfortable focusing on a single industry, business, and/or location. There is no right or wrong way to approach this. Just always be open to looking at different sources for revenue growth. It's okay to start small, but there is no need to shy away from success. Don't close the door on progress.

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In year 5 of my tax business, I was glad to have the tax business to fall back on when the real estate industry (and the economy as a whole) began going downhill. This is, of course, one of the fundamental benefits of diversification. If one industry, business, or location doesn't pan out because of factors beyond human control (or if you mess up, which will happen from time to time or even often), you will always have other options. I was fortunate to have had my hands in a few different pots during this period of my career. Speaking of pots, I even started and flipped a restaurant that same year, while selling off my real estate and managing my mortgage company at the same time.

So, over the course of just five years, I had effectively doubled my return count three times. In some years growth will be faster and in other years it will be slower. Note that it is always easier to grow by higher percentages when you are small. Thankfully, I've been able to grow by leaps and bounds even when my companies were more mature. With any business, the first few years are critical to its success. Statistics remind us that more than half of new business ventures fail within the first few years, and the reason for this isn't magic, nor is it random. Sometimes it's simply bad luck, but often these failures can be attributed to incompetence,

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laziness, and mismanagement. Of course, these are obstacles that can be conquered with planning, strategic marketing, sales, and exceptional customer service. It's hard work, but with the right attitude, the work can feel natural and even fun. Surrounding yourself with the right people is extremely important as well. Being an entrepreneur can sometimes feel like living on an island all by yourself. Having experienced and intelligent people to bounce ideas off of can be a key part to success.

When I hired my tax preparers, I made sure I was hiring highly competent and engaged individuals who were willing to be trained, who knew how to interact with customers, and who knew how to get referrals. If I had hired low-quality employees, all of my marketing money and efforts would have gone to waste, because I would have had a high percentage of walk-outs, low referral rates, and abysmally low numbers of returning customers. So I knew I had to take extra care to select the right team of preparers. My business depended on it.

Once I had a team in place, there's one critical lesson that I made sure to emphasize with my employees, both through formal training and casual, everyday conversations: the idea of following

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up. I could pen many chapters about the importance of the topic; instead, I'll do my readers a favor and focus on the most essential aspects of, and reasons for, following up.

There are many empirically-based studies that highlight the critical nature of following up. In one study done by the Harvard Business Review, it was found that companies who contact potential clients within an hour of receiving a query or "lead" were nearly seven times (7X!) as likely to qualify the lead and have meaningful conversations with decision-makers compared to those companies who contacted the customer an hour or more after receiving the lead. The discrepancy was even greater for the slowpokes—companies who waited 24 hours were 60 less likely to qualify the lead! (Source: http://hpy.tax/7xHour)).

Today's customers are more impatient than ever, so if you don't follow up almost immediately, the customer will simply go online and find the answer elsewhere. This truth applies to voicemails, emails, social media messages, or even people who walk into your office asking a few basic questions. Even though the appropriate follow-up interval will vary depending on the mode

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of communication and the nature of the question, the fact remains that the longer you wait, the more potential customers you'll lose.

It comes down to the physics of momentum: it is much easier and less expensive to warm a lead and keep a customer, than it is to lose a customer and have to replace him. So don't sabotage your marketing efforts by dropping the ball on the follow-up. Make sure you have a process in place and are sufficiently staffed to follow up in a timely fashion.

As a mentor and coach, I am occasionally asked the following question: "What is the key to effective marketing?" Sometimes I might give a long-winded answer, chock-full of ideas and tactics; however, the truth of the matter is that successful marketing boils down to this simple answer: do something. Just do something. And do a lot of it.

Let me clarify. Not everything qualifies as effective marketing. If you're spending hours at your desk scouring Facebook profiles of prospective customers and merely clicking "Like" on posts of their dogs, cats, dinners, and vacations, you're not going to get a whole lot of return on your time investment. Social media has its own

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rules and best practices. Browsing social media sites is just not a wise use of the majority of your time. The important thing is to be reaching out in meaningful ways to new clients and former clients alike. To be checking in. To be building rapport and relationships. To be updating them on your services. To be asking for referrals. Go see them where they are. If they are active on a certain platform, direct message them there if they aren't getting back to you on email or your phone calls.

You can throw an impromptu party in your office, and open the front door to lure passersby. You can write a short press release (doesn't have to be fancy) and send it to some of the smaller local papers that might actually cover it. You can call local business, charities, schools, and other organizations and ask if you could do a one-hour Q&A about the "top 10 things you need to know about your tax return." You can hire a balloon maker for kids and set up a show in front of your store, or inside. The options are truly endless. If you are not sure what to do next, just choose one thing and go with it, then take note of the results you get. Whatever you do, do something that gets you noticed in a positive way, increases awareness of your business, and of course brings in new clients.

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Related Video: Happy Tax Industry Strategy Session 12

How to Get More Tax Clients

http://hpy.tax/TMH-clients

Take-away: Business growth is a result of effective marketing. Focus on returning clients and referrals. This depends on everything from an attractive office to constantly (and politely) asking for referrals. When you're not around, your team is holding down the fort—make sure to arm them with the right tools, resources, and ample motivation to ensure that they're maintaining your marketing efforts in your absence.

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Exercises:

What marketing methods do you have experience with and are comfortable using?

What marketing methods are you afraid of, and why?

What marketing methods are too expensive for you? Can you think of creative and inexpensive ways to achieve similar results? If not, ask your colleagues/mentors.

What marketing strategies does your competition use? What can you learn from their methods?

How will you know whether a particular marketing method is working for you? What tools or methods will you use to track their effectiveness? How will you tweak your approach if something isn't quite working the way you expected?

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Chapter 8Customer Service for the Win

"You are serving a customer, not a life sentence. Learn how to enjoy your work."

—Laurie McIntosh

Great customer service begins with the business owner. When I started my business, I was the customer service representative, manager, and trainer all at once. I was also the CEO, the IT guy, the admin, and oftentimes even the office janitor. When you start a business, you end up wearing many different hats. It's the nature of the beast. You may not have to wear all the hats all the time, and you can certainly outsource and pay others to take care of certain aspects of the business, but the one hat you should be

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able to wear comfortably (and often) is the hat of customer service champion.

When I think back to my first interactions with clients, during my first couple of years in the business, I was initially surprised that people wanted to use my services. Some of them had heard of me through referrals, and they didn't want anyone else doing their taxes—even though some of them hadn't even met me face to face! Why was this? I didn't have the most charming personality, I wasn't the most attractive guy in the neighborhood, and I certainly wasn't the most educated (I am a high-school dropout who was a garbage man for many years, after all).

After some self-observation, I became aware of why my new clients were so happy, and why so many kept coming back year after year. Here is the simple formula that worked virtually every time: at the beginning of each client interview, whether on the phone or face to face, I allocated a couple of minutes to small talk. I would ask a few easy questions to break the ice and loosen them up, and would also look for any commonalities—anything from their favorite cuisine, sports team, hometown, schooling, etc. I would then tell them just a little about myself—not too much so as to bore them—and after

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a few moments something magical happened: they wouldn't stop talking.

Everyone wants to be heard. So I listened. Everyone is clamoring for attention amidst the never-ending noise of life. So even when getting their taxes done, people love to feel like they're being listened to and appreciated. Whether they're complaining about their dog's health problems, how much they hate their job, or how they have no clue about their finances, or they're bragging about their education, a promotion, or their kid's recital... there is an entire lifetime of both casual gossip and meaningful stories that most people have bottled up inside. I showed them that I was listening. That I cared about what they were saying. And I would do that while simultaneously doing the data entry, my eyes on the computer and my ears listening to the client.

If the client became quiet, I would pose another question, this time bouncing off something they had just told me, and they would continue to chat while I continued my data entry. Many people are ignored by their bosses, their spouses, their kids, and certainly by the millions of strangers they encounter in their lifetimes. In all my years as a tax preparer, I have sometimes felt more like a

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therapist than a tax specialist. I truly feel that clients have always come to me and my team because we listened. For your business to succeed, you and your team members should know how to ask good questions and how to listen. How to connect with people. There is nothing worse than silence during a client interview. Silence leads to awkwardness and will butcher your chances of getting referrals from that client.

Customer service isn't about treating everyone the same. In fact, great customer service is just the opposite—it's about giving each customer exactly what they need, when they need it, and delivering it in a way that is most efficient, accessible, and understandable to that customer. And exactly how that's done that will differ from person to person. What shouldn't differ in your approach are integrity, honesty, and competence. These characteristics should be visible in everything you do and present in every customer transaction. But while the foundation stays the same, the details of your approach need to be tailored to each individual if you want to achieve success.

Some customers are very detail-oriented. You know, the ones who come in and ask question after specific question about facts, specifications, fees, guarantees, tax laws—you name it. When

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dealing with such folks, you need to be more professional and show them your knowledge (or your willingness to get the extra mile to figure out their unique situation). You need to know the particulars of your business through and through in order to satisfy the customer, and, ultimately, to close the sale. In other words, you need to demonstrate deep knowledge and exhibit expertise. Otherwise, you risk losing credibility or, at the very least, ending the interaction with a very frustrated would-be customer who might walk out and then share their negative experience with their circle of friends and family, in person and online (where their message could easily reach millions of people for years to come).

Other customers are much more interested in the overall experience of the business interaction. They want to be attended to, they want to feel taken care of, they want convenience. They're less interested in the facts and minutiae but assign great weight to how they feel when they're talking to you or your employees. In such cases, make sure not to drown them in details. Keep the message simple, and focus your energy on chatting them up, asking about their day, etc. These types of customers typically love to talk about themselves, and if you ask the right questions in an inviting way, they'll love you for it!

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Of course, the challenge is to identify what type of client you have from the get-go, whether it's from the first moment they walk through your door, or from the first few seconds on the phone. You're not expected to be a mind reader. You should however, pay attention to non-verbal cues (if the interaction is in person) or to aspects like tone and speed of speech (if over the phone). And, of course, you can always ask the person: "How is your day going?" followed by "What's important to you?" It's surprising that not everyone salesperson asks these question, and really it's such a simple thing to do.

Of course, there are as many different personalities out there as there are people (7.3 billion, and counting), and it's your job to watch, ask, observe, and listen to each client to truly understand their motivations, fears, and concerns. You will not be able to please everyone all the time, but you'll go far if you follow these basic service principles. In short, if you feel comfortable, and you smile appropriately, you'll make your customers comfortable. And if they're comfortable, your chances of success (both with that customer, and with getting their referrals) is greatly increased.

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Of course, if you've hired employees, customer service is not all about you. The reputation of your business will rely heavily on the quality of your staff and business partners. You can be the most competent, angelic person in the world, but you won't achieve success if your business consists of negative, miserable or incompetent team members. So you need to perform proper due diligence when selecting your staff, and, once they're hired, it's important to train, mentor, and develop their customer service skills. Do not assume proficiency, no matter what people have written on their resume or have told you to your face. Train everyone on basic customer service and hold them to the highest standard.

While smiling and being courteous to your customers does not cost you a dime, good customer service can occasionally be difficult and expensive. Sometimes to produce results you'll have to invest more time than you initially anticipated. Let's take the following example: your tax preparer has spent almost an hour processing a customer's return, and it's ready for sign-off. The customer, realizing the cost of the service, decides to withdraw from the process and is about to walk away. You've just spent one hour of labor and have nothing to show for it. What would you do?

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Some business owners might only try to outline the value of the service, and reiterate how they are better than the competition. To someone who has already experienced your service, and is really just balking at the price tag, that strategy might not work. There will be occasions when you should consider offering a discount and, rarer still, situations where you should process the return for free. Why waste precious time and lose money on a single client?

Think about it this way: if you've already done the bulk of the work, that time is already lost—you can't get it back. It is a sunk cost and you might as well get some value from it. If you shoo away the customer, he or she might walk out with a negative impression and a sense that their time has been wasted—and there is no chance they'll ever come back or refer any of her friends of relatives. Instead, if you budge on the price or even process the return pro bono, the perception of your business will change dramatically for the better, and the client is significantly more likely to send you referral business.

Always think beyond the single interaction, and recognize the power a single individual has in promoting (or defaming) you and your business. You should always monitor online reviews

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(on Google, Yelp, and social media) very closely, to both to gauge customer perception and to intervene whenever possible to nip naysayers in the bud. Of course, when offering a non-advertised discount or doing a return under these circumstances for free, reiterate that this is a unique situation and make the customer feel special—that way they don't go around telling everyone that you're in the business of providing free returns.

You should always check your gut instinct to ensure that you're not dealing with a scam artist or someone who is trying to take advantage of you. Most people are honest. Take care of them. Make sure you're dealing with someone who understands the value of your offering, and who for some legitimate reason is unable to afford the full price. One happy customer is worth dozens more. Better to "lose" money on one client and gain his or her potential future business and referrals, than to have him walk out and complete his tax return elsewhere.

Even when you have a happy customer who gladly pays full price without batting an eye, the job does not end there. There's more work to be done, and it's called following up. Just as following up immediately helps with warming sales leads, following up

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regularly with current customers ensures that they remain with you for the long haul. Otherwise, they may forget about you, or a competitor might swoop in and lure them with sweet talk, or they may even get upset that you've lost touch—especially if they're used to a high level of service.

So how do you follow up in an industry where people only need you once a year, during tax season? Well, the options are limitless. One rather obvious idea that many people forget is to send the customer birthday wishes. Make them feel important; demonstrate that you remember their big day and that you care. Whether it's an email (which can easily be automated for large-scale mailings with the use of a MailChimp hack), a snail-mail postcard, or even a personal phone call, this one communication can make the difference between the customers coming to you versus heading for the competition. Remember that small gestures can be powerful.

You should also follow up in the late months of the year (e.g. in November and December) and once again in the early part of the new year. This way, you'll be in front of them just when they're thinking of where to file their return, and once more as they are making the decision. It's a one-two punch. People are forgetful, and even if they have every intention of seeing you, life can get

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in the way, and it's your job to remind them that you're here for them, and armed with the best customer service available in the marketplace.

Now, there is also a third and no less important opportunity to reach out any former customers: if they don't choose your services in a given tax season, you can call them and ask the simple yet powerful questions: "What could I do better next time so that you consider my services?" Pay close attention to what they say, and of course read between the lines. Their input will be worth its weight in gold.

Whether you're launching a new business or developing a long-standing one, customer referrals are the cheapest, simplest, no-fuss-iest way to expand your reach. But you have to be referable. In other words, you have to make it as easy, fun, and natural as possible for your customers to refer new business your way. You and your staff have to be likable. Being knowledgeable and competent is important, but it's not enough. Your clients should like you. Not only that, they should be so impressed by your work ethic, your industry expertise, and your overall personality that they will naturally tell their circle of family, friends, and acquaintances what

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a positive experience it was visiting your office, speaking with you, and doing business with you.

Then again, some customers are much more vocal than others. You might have one person who meets you only once, and is so delighted with your customer service that they practically shout from the mountaintops, promoting you at every turn. Other customers might need a little push.

Once you have made a strong positive impression, you should connect with them on social networks like LinkedIn (generally always appropriate) or Facebook (appropriate when there's been a personal connection), and politely ask them for recommendations on legitimate social and review sites. Typically, you can ask for these recommendations after you've closed a transaction for them, but don't be shy—you can ask anyone you come across for referrals, even if that person never purchased your service from you. If they simply like your demeanor, and one of their friends is looking for a professional tax service, they are likely to refer you if you're top of mind.

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Your list of past clients is also a gold mine. Reach out to all former clients, even if you've been out of touch for a while. Gently check in with them, thank them for the past business, and ask if they might have any referrals you could contact. If they decline, you can ask them whether it would be okay for you to reach out to them again in a few months' time to check in. Or if you get the sense that they're not quite pleased, this is another opportunity to ask them the simple but insightful question: "What could I do differently to make you consider my services down the road?" You may not be able to win everyone over, but combing through past contacts in this way will certainly help cultivate a more positive reputation for your business.

***

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Related Video: Happy Tax Industry Strategy Session 5

Inspiration & Integrity in the Tax Business

http://hpy.tax/TMH-integrity

Take-away: Customer service is king when it comes to the health and growth of your business. Your reputation depends on it. Always do the right thing from a customer service perspective, even when it hurts, seems difficult, or appears expensive at first glance. One unhappy client can be terribly vocal and generate a ton of bad press. To avoid this, make the clients feel comfortable. Treat them like family. Customer service can make or break you. Great customer service can take you to the next level faster than good marketing alone. Bad customer service can undo all of your hard work.

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Exercises:

Think about the last time you visited a store or office and received assistance. Was the customer service you experienced exceptional? Mediocre? Horrible? What is your impression of the business, and how will you talk about it to others?

If you have an unpleasant experience with a client, it's easy to start complaining about or demeaning that customer once he/she is out of earshot. What do you typically do after a poor customer interaction? What can you do to improve the aftermath? (E.g. jot down the experience, and ask a colleague for feedback; or, if you're feeling the pressure rising, you can hand off the customer to someone else on your team who might be able to smooth things out, etc.).

How, where, and how often will you collect customer feedback? What tools will you use to do so? What will you do with the feedback once you receive it?

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Chapter 9Leadership The Happy Way

"Remember the difference between a boss and a leader; a boss says 'Go!' a leader says 'Let's go!'"

—E.M. Kelly

It is absolutely critical that you lead your team by example. If your own interactions with customers, employees, partners, or vendors are mediocre, how can you expect your team to step up? It's unfair and unlikely. By demonstrating the skills yourself, by getting out there and meeting prospective customers, by smiling and keeping a positive attitude as often as humanly possible, you make your staff much more likely to follow suit. Don't just tell them what great customer service entails. Show them.

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Some managers or business owners are tempted to use fear tactics to scare their employees into submission, to "motivate" them with threats or yelling into following the rules. But that method does not work well with most adults. Or if it seems to work, it's a very short-term solution, and your employees will quit at the first opportunity they get. Then you'll have to waste precious time, money and energy to replace them—when you could be spending your resources on marketing and growing your business.

If you're a customer service guru, and you love dealing with people, this part of the business should come naturally to you, and so should training your staff on it. What if this is not your forte? You can consult colleagues for advice or hire a trainer to assist.

Don't force something that doesn't come naturally to you. It will show in your performance. It's perfectly acceptable to outsource certain functions of your business if it means you'll have more time and resources on growing your business.

When I launched my first tax business, I absolutely went out of my way to provide an exceptional customer experience. There were calls I took late at night or on the weekends, partly out of necessity,

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but mostly because of my ambition. I wanted to take care of my clients in the best way I knew how, and also to stand out from the competition. I remember several occasions where a client was tight on funds or needed a job. So I thought outside of the box, and I offered them a job. After all, one day a client can become a vendor, or a franchisee, an employee, or even a CEO of your growing company. You can't predict the future, but you can always treat everyone with respect.

Leading by example and treating your internal team well is vital to ensuring that your customer service is on point. As my tax business expanded, there were times when I helped out employees with small loans during the offseason. Some people may think this is unwise, but I've always felt very strongly about helping the people who help me to succeed. Employees who were helpful and successful but who may have struggled through the offseason deserved the assistance. Plus, from a retention standpoint, being good to them meant they were so much more likely to return for the next tax season, and the next.

If you turn a blind eye, if you don't offer any support (it can be emotional, logistical, financial, etc.), then employee attrition will rise dramatically. It is very expensive and time-consuming to

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replace employees, especially good ones. So do everything you can, within reason, to keep your employees happy. Investing in your people is the wisest investment there is.

Being a strong leader also means giving back to the community and to the industry which you are part of. Whether it be community event sponsorships, volunteering, doing free tax returns for those going through tough times, or just donating to charity, doing good goes a long way towards making you a pillar and trusted advisor in your community. Also, taking positions at industry events, in the press, or at networking events will elevate you to a thought-leader position and show your expertise. The key is to be a visible, transparent leader to your clients, your team, your community, and your industry.

***

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Related Video: Happy Tax Industry Strategy Session 4

Difference between Information & Implementation

http://hpy.tax/TMH-implementation

Take-away: Don't be shy. I've been an introvert my entire life, so if anyone knows what it's like to lead and be vocal while being shy, it's me. Doing the right thing for your team members will pay dividends many times over and will help your brand to shine with exceptional customer service. If you don't treat them right, they won't treat your customers right. Take risks and be bold in your community and your industry. Do not sit idly by on the sidelines while others take the recognition (and clients).

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Exercises:

How can you stand out as a leader to your clients and team members? What could you do that is outside the box, memorable, and inspiring, to show them how much you care and how far you will go for them?

Think about a store or office that provides top-notch customer service. What do they do, specifically? What can you "borrow" and teach to your team to ensure that your firm's customer service skills are equally memorable?

When dealing with people, you'll inevitably deal with difficult, demanding, miserable clients (if you're good, these types of customers will be few and far between). While you can't control other people's moods, what can you do to ensure you're on your A game?

What is your customer service mantra or philosophy? How and where will you communicate this to your team? (E.g. will there be a visible poster, or a weekly email, etc.).

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Chapter 10How to Overcome Failures, Setbacks, Doubts, and Other Common Obstacles

"The harder the conflict, the more glorious the triumph."

—Thomas Paine

I'm no fortune-teller, but there's one thing I know for certain: every business, even one that's experiencing healthy growth, will be met with its share of obstacles. Sometimes these are major setbacks or near-fatal failures that shake the very foundations of the business; other times they are only minor hurdles that, while frustrating, can be swiftly overcome. In the moment, in the midst of the stress, it can sometimes be near impossible to determine which it is, so it's important to not take any obstacles lightly, lest they

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grow into something more serious and destructive than initially anticipated.

Obstacles can spring up from any and every direction, though usually you can separate them into internal and external obstacles. Internal obstacles might include doubts and low confidence on your part, a lazy or even corrupt employee, or poor processes that drive inefficiency in your business. External obstacles could include new government regulations, weather emergencies, internet blackouts, or even economic downturns. In 2009, the U.S. was reeling from one of the worst recessions in decades, and most businesses were impacted in some way, especially small enterprises. In response to the economic slump, I had to shift gears. Whereas my focus until then had been on growing my business, now I had to concentrate on survival.

I didn't want to join the scores of stores and offices that were closing their doors. I knew I had to make some tough decisions in order to stay afloat, and one of the hardest was having to let go of certain employees. Letting people go is never fun, but it can be an opportunity in disguise. It forces you as a business owner to think critically about what is essential, and what you can do without

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in rough waters—and this goes for not just employees, but every aspect of the business, from advertising to marketing materials, from IT equipment to office supplies.

For the business to endure in a harsh economic climate, the work ethic and integrity of the employees who do remain is even more important. If there are any suspicious characters on your team, any hint of theft or dishonesty must be dealt with swiftly. Morale is already wobbly during such times, and you want your core team to be as conscientious and reliable as possible. If you become soft, and you let employees with poor people skills stick around, or you let inefficient employees who resist training continue to make mistakes, you risk dragging your business down to the ground—and then everyone will lose their jobs.

It goes without saying that when letting anyone go, maintain your sense of dignity and approach the person with courtesy. Thank them for their service, and, as you're sending them off, wish them well. They too can be a great promoter (or destroyer) of your business reputation even after separation of service. Treat every employee with the same respect that you offer a customer. Sometimes, that's the best that you can do, and as the owner or manager, you need to keep the ship from sinking in rough waters.

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It's normal to have feelings of guilt if you have to let someone go for a macro reason, but don't wallow in them for very long. After all, you have a business to run, customers to serve, and other employees to pay—and certain factors like the economy are simply outside of your control.

If you've retained a team of employees who are eager, honest, and effective, they will rally. Plenty of startups and small businesses thrive with a skeleton crew, and while it can contribute to burnout in the long run, it can also create strong, meaningful bonds within the team. If you are downsizing as a last resort, make sure that you're recognizing the team's extra efforts. Show them you care. Treat them to coffee or a drink as often as you can, buy them lunch, or do something creative that you know they'll enjoy (after all, you should know your employees really well). You don't always have to spend a ton of money to adequately recognize performance and boost team morale. A small gesture can go a long way. At the very least, say thank you often and show your appreciation and gratitude. For some people, that is even more important than money.

There are a slew of other obstacles that can throw a wrench into your business. Let's say there is a major change in the tax code, or

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the way the government processes returns, and it is announced last minute (IRS changes like these seems to happen all the time). How do you respond? Do you burn an exorbitant number of calories and spend way too many hours complaining or voicing fear in the wake of the change? Or do you research the implications, consult with others on best practices, and give it your best shot, even if you're not 100% certain of the right approach. You can probably guess that the former method is a draining waste of time. The latter is what most successful business folks do.

Yes, in business you'll sometimes have to wing it. There isn't a training manual for every possible scenario. But you have a brain. You have a cohort of colleagues, mentors, and industry thought leaders who can provide guidance.

Whatever you do, don't let perfection stand in the way of action. Don't spend endless hours researching a topic again and again and fall prey to "analysis paralysis"—you're much more likely to learn something if you take the leap (also known as "an educated guess"), make a decision, and see whether it sinks or floats. You can almost always make adjustments as you go. Think about why it is that children learn so quickly. They have no fear. They make

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mistakes—one after another—and in doing so they acquire new knowledge and skills at incredible rates.

As adults, we are often immobilized by the fear of not knowing what lies ahead. And if we just stand in place, avoiding decisions, the world keeps changing, our competitors become fiercer, our customers become more savvy and demanding, and we are left behind in a cloud of dust. From my experience, I'll readily admit that it's a much better position to be at the front of the pack. You may not get everything right all the time, but with every mistakes, every tweak, you are moving forward. That is the only path to human progress, and there's no way around it.

As an aggressive entrepreneur, I've run out of money more times than I can count. I don't gamble at the casinos, but I do regularly take calculated risks and put the chips "all in" on my companies and my team. There have been plenty of times when I was unsure about how I would get through the next month. You just hunker down, give things some deep thought, and get started on the work at hand. At times it can start to get you down. Entrepreneurship is not only accolades, success stories, and awesomeness. It is plenty of long, hard hours on projects that you don't want to do,

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solving problems you don't want to have, and building something that oftentimes feels like it will never be finished. When facing an obstacle, large or small, you need to run your business with confidence. This is not to be confused with arrogance or ego. Being assertive and confident means that you believe that you can face the challenge with strength and find a reasonable solution, even though it may take a long time and require hard work. Confidence is massively important, because believing in your future will help you take the requisite action and achieve your goal, even if you don't accomplish it the first time around. But your confidence is also critically important for your employees, business partners, vendors, and (most of all) your customers—all of whom are looking to you for guidance and direction. Remember, you are their leader.

As an example, during the time of the economic crisis in 2008, I had to downsize my 3,000-square-foot office suite to a 400-square-foot two-room office. I could have allowed my ego to prevent me from accepting that my growing business needed to move; however, I did what was necessary to ensure the continued growth and financial stability of my company.

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If you emanate confidence in the face of adversity, your employees will admire you and will likely follow suit—because confidence is infectious—and this attitude will shine through in their interactions with your customers. If, however, you give off fear or uncertainty, this will put your team at unease, making them nervous or anxious, lowering morale, and negatively impacting customer interactions.

Many successful entrepreneurs will tell you that even if they are working long hours, it hardly ever feels like work. And it allows them to keep working. How can that be? It often boils down to fun. It's not just that they're passionate about what they do overall. It's also that they find joy in the everyday tasks, or if some task is not enjoyable, they are determined enough to improve it so that it becomes fun—or else they just eliminate it from their workload. A task or project that is devoid of all excitement and fun will sap you of your energy, creativity, and desire to move forward. There are some tasks you may just have to power through, but at the very least, you can enjoy the feeling of being determined and capable enough to get them done.

If you're having fun and you're wearing a smile, you're treating your employees better and your customers are happier. If you're

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not having fun, ask yourself: is this the right business for you? Are you in the right job? If yes, then what's preventing you from having fun? Business doesn't have to be so serious all the time. You'll achieve a whole lot more if you live a little. Challenge yourself and your team to make certain tasks more pleasant and exciting. There is no limit to the human imagination, and so there is no reason why anyone should be miserable 5-6 days a week (or however often you work).

One obstacle that many of us ignore, perhaps because it is so prevalent in every aspect of our civilization, is the management and transmission of information. There is just so much data flowing every which way. New policies. New tax codes. New software. New emails. At times it can feel overwhelming.

Even though we're already bombarded with too much information, we continue to create more such information procedures and paths every day. When was the last time you completely eliminated or pared down a process? It seems that some organizations are only adding, never removing. And this can lead to information overload. The key to managing this, while not always easy, is indeed simple: you must first clarify your primary goals to yourself, then

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communicate them to your team, and then focus on the top goals, specific deadlines, and specific tactics that will help you accomplish them on time. Most other distractions that try to get in the way are just that—distractions. If you let them, they will make you stray from reaching your goal. So don't let them. Be ferocious in your focus.

Regardless of what form your information takes—paper, electronic, verbal communications, or an idea in your head—establishing clear priorities is the key to working most productively. Without prioritizing information, ideas, and opportunities as they come in, you are at risk for doing something that is less important while something more important is neglected, or you are at risk of forgetting to handle an important task before the deadline passes. At Happy Tax, we use G Suite for our email app and I regularly use the Star function to make sure something important doesn't slip through the cracks, as I get hundreds of emails every day. The rest either get handled right away or ignored. Another great reason to use G Suite is searchability. I have all of my emails going back to 2005 and can tell you what we talked about a decade ago without having to remember everything.

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I want you to feel liberated and free to ignore things that aren't part of your priority list, don't directly contribute to meeting your goal, or aren't revenue-generating activities. Too many entrepreneurs get caught up in trying to please everyone, trying to do everything, trying to get back to everyone. If you see someone isn't a good fit, be respectful, but move on. You will be pitched regularly by salespeople, business development people, referral partners (who may not even be in a position to even refer you anyone), and marketing messages. If you haven't formally organized your business yet, once you do, you'll be bombarded by phone calls, emails, direct mail, and even Facebook messages of potential service providers. Ignore them all. When you are ready and in need of a service, go out and find it. It is easy to lose hours at a time fending off cold calls and time wasters out there. Your time is your most valuable asset. You must be in control of it or you will fail.

There are plenty of curveballs life throws our way that can make us be upset, frustrated, or miserable. The trick is to keep your head up and keep going. A positive mindset and a smile won't save a crumbling economy overnight, but they can help you, your team, and your business stay afloat. In fact, if competitors are buckling under the pressure or excuse of a bad economy, too

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much competition, or other so-called factors "out of their control," and it shows in their compromised attitude, then your confidence, focus, and smile will become a competitive advantage. After all, everyone likes to feel comforted and safe. Complaining or giving into fear may be trendy (most everyone was doing it in 2009-2010), but it takes forethought, courage, and resolve to resist the popular tendencies and instead hold your head up high, maintain a smile, and give your clients the best service you possibly can. And that's exactly what I did in the middle of that economic crisis.

Something that seems to happen every couple of years in the tax industry is that the IRS, delayed by the indecisions and squabbles of Congress or reeling from a government shutdown, does not start accepting certain tax forms until the middle of February or late January—several weeks or more later than the usual time in mid-January. These bureaucratic delays have a significant and negative impact on the funding of our tax businesses, because we don't get paid on certain bank products until the refund is issued. Cash flow is affected, and customers are annoyed, understandably. Even though it isn't the fault of any one tax preparer, mom-and-pop tax business, or large tax preparation chain, clients everywhere become unhappy.

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When situations like this occur from factors beyond our control, we can choose to spent endless hours complaining, getting defensive with our employees or even with clients, or pointing fingers. This is all simply a further waste of time. Instead, plan intelligently and have a backup plan to keep your business funded when your main source of cash flow is delayed. Although it is nearly impossible to predict these types of scenarios, you are able to be prepared. Being broke is not a contingency plan, and that's a truth I've lived by since I was young. Make sure you have a cushion of funds for situations just like this. I never wanted to be in a situation where unpredictable winds caused my business to fail. So I took action from day one and made sure I was financially prepared with a windfall, just in case. If you ever find yourself in a dire business situation, take a moment to think about your options. And don't do it alone—reach out to a mentor, a colleague, or a thought leader in your industry. There are usually many more options than you can imagine. Be proactive, not reactive.

***

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Related Video: Happy Tax Industry Strategy Session 21 Common Tax Industry Misconceptions

http://hpy.tax/TMH-misconceptions

Take-away: In business you'll inevitably need to make tough decisions from time to time. It's important to nip problems in the bud as early as possible (e.g. deal with difficult employees swiftly). Overcoming external obstacles and forces outside of your control can be tough, but sometimes internal battles are tougher. Maintain confidence and clarity for the sake of the business. Seek advice, counseling, or coaching if you need it. Be agile. Be creative. Don't let perfection stand in the way of action. Evaluate the situation, consider several options, and arrive at the best decision for the business. Use your imagination. There is usually more than one

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way to fix a pesky problem. Find the fastest, most cost-effective, and most sustainable solution you can.

Exercises:

What will you do to boost your team's morale and keep it high?

Are you prepared to downsize as a last resort if necessary? What is your contingency plan if there are changes to the industry or your company's financial situation?

What are some internal obstacles you've faced in business? What are some external obstacles? How did you respond to each of the above obstacles? Knowing what you know now, what could you do differently the next time a similar situation arises?

What is a difficult business decision you've had to make in the past? What did you learn from it?

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What is a challenging decision you might face in the next month? The next year? How are you preparing yourself for that scenario right now?

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Chapter 11Expanding Your Tax Business

"Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you're climbing it."

—Andy Rooney

Beginning in 2010, as the economy started picking up gradually, I felt that it was time to make a move. In the two years prior, I had downsized, I had adapted, I had improvised—I had done what I needed to do in order to save my business. But now it was my opportunity to expand. I didn't need to wait for the TV analysts to officially tell me that the economy was back on track. I felt that I must be part of the change to improve the economy. You just have to observe regular people, take notice of small businesses—

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you don't need a fancy college degree to realize that the tide is changing.

I knew that I wanted to start building my business momentum early to capitalize on the economy's growth, no matter how slight it seemed to be. I didn't want to wait it out too cautiously, because by the time the economy was booming again, it would have been a bit late: I would have lost a lot of time and squandered a lot of opportunity for growth. And besides, in business sometimes you have to take a leap, or chance it with a calculated risk. No, the tax business is not the best place for daredevils and half-baked ideas, but if you want to achieve greater success, inevitably there comes a point when you'll need to throw a bit of caution to the wind.

From 2010 to 2014, I expanded my business from one office to 99. Not bad. While that seems impressive in hindsight, what I want to emphasize is that the key to this success was the first office. I made sure that the foundation of my business was solid, that the process in place was efficient, and that my core team was competent, reliable, and honest.

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How did I ensure this? Well, of course I had always weeded out anyone who was consistently incompetent, unreliable, or dishonest. But that's not all. For everyone who did make the cut, so to speak, I made sure to always be the leader and coach that I set out to be. My team deserved at least that much. I made sure to scrutinize any and all business operations related to poor or less-than-ideal performance. At the root of the problem, I knew that there would always be ineffective or inefficient activities (if the people were otherwise good) that were driving those results. The effectiveness of execution is the direct cause of the results, whether good or bad.

When a football team goes out for a practice, the coach doesn't simply tell them to run 15 plays 8 times each and then they'll call it a day. Instead, at the end of each play the coach analyzes, scrutinizes, challenges, motivates, teaches, and summarizes weaknesses, strengths, opportunities, and risks to all the players so that the subsequent repetition, combined with the newfound education, can lead to improved execution. This is the case for weak players and for excellent players alike. If you're the best tennis player in the world, your coach just doesn't stop because you're on top—he works that much harder on you to keep your strengths sharp

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and diminish your weaknesses so that you can stay on top. The learning and development is never-ending. The sweat never stops.

Getting feedback from clients and using that feedback to give guidance to your team is one way that I have always analyzed, coached, taught, and otherwise instructed my team "in the game." That real-time feedback loop is vital. If you aren't doing tax returns personally, you should be personally calling and talking with a number of your clients each and every year, then using that valuable intelligence to make your operation better.

If there were no feedback or coaching at the end of each task, project, and season in your business, there wouldn't be much improvement. It would simply be an exercise of going through the motions, and this would perpetuate ineffective execution and maintain poor results. The best performers break down every position and every task by all of their employees; they utilize all the training tools and resources available to develop their employees and help them execute as close to the plan as possible. The poorest performers simply go through the motions and check off "activities" that are not effective. Being busy is not the same thing as being efficient and effective.

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Once I was confident that my office was a well-oiled machine, I knew I could replicate the business elsewhere. If instead I had operated an inefficient or inept business, trying to clone it would turn out like the game of telephone, where the mistakes compound each other and each subsequent copy just gets worse. In short, I built a powerful foundation that allowed me to expand my business quickly and successfully.

After aligning myself with a franchise, I made sure to position myself favorably, and I did so by finding businesses that were struggling, like mom-and-pop tax shops that were distraught or desperate to sell. Given the economic climate, it actually wasn't as hard as it might sound. I simply used word of mouth, direct mail, and digital ads to get the word out that I was actively looking to purchase tax businesses. I visited businesses in person, sent emails, snail-mailed postcards, posted Facebook ads, and the like. I also surrounded myself with various business brokers and other people in the industry who had access to information, resources, and intelligence.

The IRS also is required by the Freedom of Information Act to provide a list of every tax business owner, along with their address,

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phone number, and number of returns completed in the previous three years, so this information of who your competitors are is obtainable.

You can also go on Google Maps or various online data aggregators to get information about current tax businesses in your area—and once you have the address or phone number, it's your job to just reach out and handle the rest.

So, if you dream about expanding, more power to you. First, take a hard look at whether your current business is in tip-top shape. Are there any business headaches that you need to treat first, so they don't grow into monstrous problems when you decide to expand? Consider every aspect of your current business, including the staff, marketing and sales processes, IT/AV equipment, software platforms, office space/real estate, and so on. Don't leave any stone unturned, because if you do, you might only notice a problem years down the road when it's infected multiple offices. Also, keep in mind that when you scale your business, you're bound to encounter entirely new challenges.

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When you expand, remember that you'll inevitably have less time to monitor each individual office. That's when the integrity and competence of your staff and management really counts—when you're not present. You should still carve out time to show your face, because in doing so you show that you care, and that the staff in each office is important to you. But obviously, if you get to the point where you're operating 99 offices, it's humanly impossible to visit every location on a weekly basis, so you'll have to account for that and find creative ways to keep in touch and monitor operations closely in absentia.

In cultivating an all-star team, it's important not only to find the right employees, but to develop them as time goes on. It's easy to find competent, hard-working candidates, but if you hire them and then walk away, things can go downhill as employees become bored, lazy, noncompliant, or (especially with the star players) even burned out. It's up to you to maintain the caliber of your staff, and that takes work. It requires you to monitor performance, to intervene when quality dips, and to show appreciation when service excels.

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Yes, it takes a lot of time and energy to train and mentor your team. But your job is to empower your employees to succeed, to give them the mental skills and technical tools to flourish even when you are away for extended periods of time. The alternative is to clone yourself across all of the offices, but that's just not feasible—at least not quite yet.

When you have a small number of offices, frequent and regular visits are certainly doable, and highly recommended. Your presence demonstrates that you care deeply, and you can reinforce that impression by making sure that you bring a lot of positive energy with you when you do make the visits. You don't have to throw parties or take your employees to dinner every time (in fact, if you do it too often, it loses its appeal and effectiveness as a reward), but you should absolutely do nice things on occasion to put your money where your mouth is. In other words, most of the time it's sufficient to verbally praise and recognize your team, but consider making a special effort once in a while, especially when there is an important business milestone to celebrate.

As I opened additional offices, I would organize milestone or birthday dinners, making it clear that my people were my top

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priority. Remember, angry or sad employees inevitably lead to angry or sad customers, and that's just not what I wanted. And even on a regular visit, I would occasionally bring inexpensive treats to boost team morale. Most importantly, I brought my A game and a smile. A smile cost me nothing, but when I encountered an employee who was having a rough day, a smile went a long way.

I also made sure to involve my star players in relevant meetings, partly so they could get a sense that their opinions were valued, but also to develop their industry knowledge and meeting skills. Employees who are performing at a high level need to be challenged, need their skills to be developed, otherwise they will wither away from boredom. It's painful to a five-star employee if you are inattentive to their professional development and involvement.

Sometimes whether in person or on the phone, employees just need to be heard, to vent. My team knows that they can come to me with anything and that I'll be there for them. I encourage you to do the same for yours.

Of course, your visits are not just about fun, games, and free food. As you make your rounds through your offices, it's an opportunity to provide feedback in the form of honest assessments. If you've been

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monitoring the performance of each office virtually (e.g. through software or email), there should be few surprises. But nonetheless, being there in the flesh will help you talk to management and staff, and better understand any challenges they might be facing. If there are any personnel issues, take this time to address them head on. Don't let staff issues simmer, because you'll never know when they might boil over and cause you expensive headaches.

Feedback is most effective when it's delivered immediately (or soon) after the observed behavior. Otherwise, it loses its power. There are plenty of corporations that conduct performance management feedback once or twice a year, but that leaves too much time in between, and by the time the survey or manager conversation happens, it's too late. People forget the specifics, or collect more excuses along the way. The longer you wait, the less impactful the feedback will be. When I saw that a single office or employee was having trouble, I did not wait weeks or months to step in—I made a visit or placed a call as soon as I could, so I could investigate the issue more closely and implement a solution as quickly as possible.

Honest feedback is not always pleasant. Let's face it, constructive criticism can hurt. Even if the owner or manager has the best

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intention and the sweetest delivery, the employee on the receiving end of the feedback can feel wounded. Although it's wise to soften the blow, your job is not to avoid hurt feelings. Instead, your job is to conduct real (sometimes difficult) conversations to improve employee performance and ultimately ensure the success of your business.

Whenever I doled out feedback to my staff, I thought of myself more as a mentor and less as a "corrector." I approached the interaction from a place of compassion, genuinely and kindly, but I also held my employees to a high standard and made that clear at every opportunity. I wanted to empower each individual to reach his or her potential—and you know what? Most people, when appropriately inspired, do become go-getters and do push harder to achieve their goals. Just accept the fact that a few bad apples may resist any attempt at self-improvement, no matter how great a mentor, coach, trainer or boss you may be. Despite your best efforts, some people are just not open to growth, so know when to cut your losses.

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One method that is quite effective at providing feedback is the aptly-named concept of "feedforward," coined by Marshall Goldsmith, a leadership thought leader and executive coach.

Feedforward focuses on future scenarios and alternate ways to handle certain situations. So, rather than telling an employee what they did incorrectly in the past, you might ask them: "What could you try differently the next time you face a similar situation?" It's a much gentler question, and unlike constructive criticism, feedforward is less likely to make people defensive. Because when they get defensive, no matter if they are right or wrong, they simply won't listen to your advice. So if you've had difficulty in the past when providing feedback to your staff, you might consider adding feedforward to your arsenal of communication tools. Try it out, and train your management to do the same.

While face-to-face communications and in-person visits are ideal, you may not always be able to visit every office all the time. In those cases, pick up the phone, send an engaging email, or conduct a videoconference call (Skype, Facetime, or Messenger). Whatever method you choose, don't rely too heavily on emails alone. All too often emails are skipped, skimmed, deleted, or ignored. They're a

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useful tool for mass communication, but for critical issues, don't be shy—use the phone. You can always send a follow-up email if you want something in writing for your records.

Lead by example. If a manager or employee is struggling, show them how you might handle the situation, share an anecdote with them about an obstacle you once faced or a mistake you once made—make yourself human. Don't rule from on high and expect your employees to comply. You must be willing and able to get in the weeds with them from time to time. To take a customer call during a visit, to hand out a few flyers, to talk to prospective customers on the street. This past tax season, even though our organization consisted of over 70 team members at corporate and over 300 field partners, the team needed help getting tax returns done one weekend. I was happy to help them and show them that I am not a boss but a leader. Don't be afraid to get your hands dirty. Your actions will speak louder than your words, and this will inspire your employees to a higher standard.

When you operate multiple offices, there is a ton of knowledge and countless skills amongst your employees. Don't silo each office. Instead, share expertise and best practices with one another. Some

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offices may not do this naturally, so it's your job to encourage regular sharing. Whether it's through weekly conference calls, local monthly events, or fun cross-office contests, use your imagination to make the experience engaging and rewarding for your staff.

***

Related Video: Happy Tax Industry Strategy Session 22

How to Scale Your Tax Business

http://hpy.tax/TMH-scale

Take-away: Before expanding your tax business, make sure everything is in place to support the expansion. If you don't have at least one well-oiled machine in place, do not go out and acquire more offices just yet. Ensure that you have built an all-star team at your first office. They will be your foundation. Practice and

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perfect the art of providing feedback and feedforward. Learn how to monitor each office and to intervene early when needed—a skill that becomes all the more important when you start operating multiple offices.

Exercises:

Feedback/feedforward: Think back to an interaction with an employee (or colleague, friend, or relative) where you provided constructive criticism (aka feedback) and they became defensive. How did you deliver the feedback? What was their reaction? What is one thing you could try differently the next time you deliver similar feedback?

If you have one office and are planning to expand, what are some of the pain points or challenges your office faces that you'd like to solve before you start expanding?

How will you/how do you monitor performance at your office(s)? How often are you physically present in each office?

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What do you do for positive reinforcement and staff recognition?

If you could read your employees' minds, what is one thing they'd like you to do differently/more of/less of to help them achieve their business goals?

Do you over-rely on emails? What is the danger of communicating everything via email? Do you have any fears or qualms about phone or video-chat communication? If yes, why? What could you do this week to try to overcome those fears?

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Chapter 12Building Lucrative Alliances Through Networking

"Unity is strength... when there is teamwork and collaboration, wonderful things can be achieved."

—Mattie Stepanek

Earlier in my tax career I came across a gentleman who owned a chain of tax and financial service businesses. We had a wonderful conversation when I first reached out to him, and we built great rapport from day one. We would see each other at trade shows from time to time, and that only strengthened the professional bond between us. Now, he and I have never done a business deal, at least not yet, but despite being competitors we've always been courteous to and respectful of one another. We grab

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dinner at least once per year to discuss the industry and catch up. After all, you never know when we may collaborate down the road. So, just as you would treat clients and employees well, make sure to be respectful of competitors, too. Business relationships are key, and can take years to develop into something lucrative. There is enough business for everyone to go around. You don't need to make enemies of your competitors (just be better than they are).

Speaking of business relationships, what is business, really? If you reduce business to the very core, it's nothing more than one person communicating with another person, sometimes one-on-one, sometimes in a group. So it stands to reason that an entrepreneur who is good at networking is effective at building a successful, profitable business. To be clear, networking alone won't get the job done (i.e., you need to provide a compelling product or service and an efficient process in place to achieve sustainable success). In other words, it's not a sufficient condition for success—but it is a necessary one.

In the course of your business and life, you'll come across people for whom networking is second nature. They ooze confidence and their conversations feel natural, never forced. More than

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that, they enjoy schmoozing, making introductions, socializing, chitchatting—call it what you will, but it's all networking. And if you're one of those people, great. You have a leg up on a good portion of the population. But if you aren't naturally predisposed for networking, don't waste any energy worrying about that. Like most anything else, networking a skill that can be learned, improved, even perfected with time. Even if you're a naturally shy person, with a genuine desire to achieve success you can work to overcome your predisposition (or at the very least you'll need to hire an A+ networker).

Some people feel a bit uncomfortable about networking because they confuse it with selling. Don't be those people. Networking is about sharing information, insights, and resources. It's not just about taking (e.g. asking for business, making a sale); it's also about giving. To expand your business beyond what you can achieve through traditional advertising, you should constantly be reaching out to individuals, groups, businesses, and relevant organizations in your community to let them know of the value you bring. Some people will immediately announce that they are not interested, but others might need your services immediately or know a few people who might be interested.

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But it's not just about getting referrals. Talking to people in your community (physical or via online social networks) could lead to mutually beneficial deals, where you can pool and share resources (e.g. sharing office space), exchange useful information/data/insights, or simply support one another through various challenges (e.g. collaborating at town halls, co-hosting marketing events, etc.). As the saying goes, there is strength in numbers. But there is also diversity of skill sets, knowledge, software, processes, best practices... the list goes on and on. Don't limit yourself. As smart and savvy as you are (or think you are), everyone has different weaknesses and strengths—identify people or organizations who will support you and improve your knowledge base and reputation, and offer to do the same for them.

By the time 2015 came, having spent over a decade in the tax industry networking with other professionals, I had a large group of people to talk to about the new industry model we created at Happy Tax. It might seem odd to discuss a competing model with your competitors; however, I actually received many referrals from them of people who might be a good fit as a Happy Tax franchisee. Networking can pay off now or it can pay off months, years, or decades down the line.

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Also, when networking, don't limit yourself to people in your industry, although that's a fine place to start. Think beyond the tax industry. Make connections—as I did—with local business, shops, hospitals, trade associations, online groups, etc. For years, I've attended meetup groups, chamber meetings, and seminars, and I have networked online in discussion boards and on social media. It works and has helped me to grow my businesses hundreds of times over. The more people who know about you, the more likely you are to (a) get referrals, (b) find people who have mutual interests with you, (c) increase your brand presence and awareness of your business, and (d) make meaningful friendships and grow the network of social support for yourself and your business.

I believe strongly that every establishment within a half-mile radius (if you work in a densely populated urban area, more if you're located in the suburbs or rural communities) should at least know about the existence of your business, and ideally have a face to the name (your face preferably). This requires energy, of course, because either you or your team will need to make the in-person visits or courtesy calls. But there is nothing worse than when someone who lives or works two blocks away needs a tax preparation service and doesn't know where your office sits.

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As I built my business, I made personally sure to visit as many businesses in my neighborhood as I humanly could. When introducing myself, always wearing a smile, I would then ask about their day and their business to build rapport, and before saying goodbye I would reiterate my services so that it was etched into their mind. Where appropriate, I would leave behind flyers or business cards, because I never knew who might walk into that establishment after me. The beautiful thing about these interactions is that they are incredibly simple and virtually free, but so few business owners make the effort, preferring to spend all their time and energy on paid advertising or other forms of marketing. The key is to diversify, and not to ignore the businesses next door.

As I mentioned earlier in this chapter, it even pays to network with your competition, directly or indirectly. Some people might wonder why you'd ever share any information with a competing office or chain, or maybe they simply fear approaching the other business for fear of looking desperate, creepy, nosy, or just plain weird. Of course, if that's the attitude you carry inside you when you make the visits, that's exactly how the competitor will perceive you. So if that's a struggle you face, I think it's just best to get over it, right here and right now. Give it a shot. See what you can learn

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from your competition. As the saying goes, keep your friends close and your tax preparation enemies closer.

Observe carefully what other businesses do, because they might be doing it better than you. Look closely at how they treat their customers, how their office or store is decorated, what kind of equipment they use, and how enjoyable or unpleasant an experience it is to purchase their product or service. Of course, other businesses aren't perfect, but if you see something that's causing issues, making the process inconvenient or otherwise chasing away customers, make a note of it—and take a moment to reflect on your own business to see how it compares. Making mistakes can be costly, but learning from the mistakes of others, well, that's 100% free.

Of course, if appropriate, you can certainly feel free to point out the issues or offer solutions to the other business owner or manager, particularly if it doesn't cannibalize your own business. But don't hoard all of your ideas for fear that others will outdo you. Even if you don't believe in karma, by helping businesses in your community you'll make a strong positive impression, and your perception as a considerate, savvy collaborator and overall awesome person will

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soar. This is exactly the kind of person I like to work with. I'd gladly send my referrals to someone with such integrity—wouldn't you? It's not guaranteed, but by helping others, others are significantly more likely to help you down the road.

No man, and certainly no business, is an island. When building your business, think about it in diplomatic terms: forging alliances is where it's at. Consider building relationships both with the obvious complementary industries (e.g. financial institutions, real estate agencies, etc.) as well as organizations that seem like less likely allies (e.g. schools, hospitals, day care centers, job development programs, travel agencies, charities, etc.). You never know where your next business partner or referral will come from. At the end of the day, it's a numbers game, so don't sabotage yourself. Don't limit your reach.

Networking can sometimes take on a very formal tone, for example, if you decide to set up a referral-swap arrangement with a complementary business that is mutually beneficial to you both. But much of the time networking is casual, unplanned, even momentary. For example, you might meet someone just once on the street, on a train, at an event, and you'll never see them again—

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but if you've made a clear and strong impression, they'll remember you and just might send you referrals long after you've forgotten about them. If you can, though, don't forget about them—try to get a name or a card; that way you can follow up before the next tax season!

One thing that stands in the way of effective networking for some people, especially within the same industry, is a basic human emotion: envy. If you see a thought leader who is ahead of the pack and is achieving great success in areas where you might be struggling, or a savvy competitor who sometimes rubs you the wrong way but whose creative approach you admire, or just someone you respect and whose brain you'd like to pick, reach out to those folks, and ask if you could treat them to coffee or lunch. This doesn't have to be a formal mentorship. It can be a one-time meeting. Some people will decline, but a few will agree. Meet with them. Share ideas. Ask good questions. Compliment them on what you think they're doing well. Be real and be honest. Share some of your challenges. Ask for their insights or advice. You'd be surprised how much you can pick up in a half-hour session (and make sure to pick up the check, too).

***

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Related Video: Happy Tax Industry Strategy Session 24

Cross Marketing of Insurance and Tax Prep

http://hpy.tax/TMH-crossmarketing

Take-away: No business and certainly no entrepreneur is completely self-sufficient. Focus on networking with individuals, businesses, and organizations in order to effectively grow your tax business. Network within the tax industry, with complementary industries, and with industries that may not have anything obvious to do with your business. You'll get referrals from other industries and get ideas that can be translated into the tax business. Build alliances with other service professionals. Consider informal and formal

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referral arrangements with related businesses that are mutually beneficial. Network your way to success.

Exercises:

On a scale from "I hate it" to "I'm a natural"—how comfortable are you with networking? If you hate doing it in person are you okay with doing it online? How have your feelings about it impacted your business growth? Even if you're a natural, what's one new thing you can try as far as networking is concerned?

How often do you network? Where do you network? Where else can you try?

What internal networking (within the tax industry) do you do? What's been the result? What else can you do?

What networking have you done with complementary industries (e.g. finance/banking, real estate, law)? What has been the result? What else can you do?

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What external networking (i.e. completely unrelated to the tax industry) do you do? What has been the result? What else can you do?

Have you met with competitors? If not, identify one successful person you'd like to meet for coffee or lunch. Reach out to them this today.

What have you learned about your own business from networking? What flaws were surfaced? What mistakes were avoided? What improvements did you make?

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Chapter 13Tools & Tricks of the Trade

"Our life is frittered away by detail. Simplify, simplify."

—Henry David Thoreau

One thing you don't need to worry about when launching your first tax preparation office is having to reinvent the wheel. Trust me when I say that the process is proven, tried-and-tested by myself and by countless others before me. There will always be room for you to innovate, to come up with new and creative solutions to long-standing problems or novel challenges, but by and large the bulk of your business operations can follow a beaten path. You don't have to start from scratch or make mistakes just for the sake of doing so.

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When I launched my first office, it was tough. I didn't have any experience, nor did I have access to training and support resources. Because I was a "mom and pop" style with a staff of one (me), I didn't have the systems or legacy of support characteristic of large chains. But I did have my voice, a phone, and my two feet, and I used those to seek advice from others, to visit and observe how others succeeded (and where they failed). And I made plenty of my own mistakes along the way, too. I learned the hard way, true, but I accelerated my education by learning from the experience of others.

I've made it that much easier for you by compiling, digesting, and organizing these nuggets of wisdom and bits of my experience in this book. It amounts to a decade and a half of experimentation and insights to help you avoid costly mistakes. In this chapter, I'll cover a variety of topics to increase the success of your business: automation, communication, outsourcing, finances, payroll monitoring, software/tools, and finally some miscellaneous tips that have proved useful to me along the way.

The goal of any savvy entrepreneur is to build up the business to a point where it's running smoothly. There will always be

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micromanagers out there, and in some ways you need to have eyes like a hawk, but your energy is not being used wisely if you are spending most of your time babysitting your staff or constantly putting out small (figurative) fires across multiple offices. Sure, you may feel like you're accomplishing something, being busy, and saving the day. But the best test of your leadership and management is what happens if you don't interfere. Would the staff panic or the quality of service deteriorate? Would the numbers of new or returning customers drop dramatically? In short, would the ship sink in your absence?

The following sections all cover ways to set each of your businesses up for success—with or without your presence.

Automation

Business automation is the process by which certain business tasks, transactions, or communications are standardized and automated. You can think of this in two ways: one is the shift from doing everything manually (e.g. old-school pen and paper, snail mail, or even sending emails one by one to customers and prospects, etc.) to doing most things with the help of technology (e.g. software

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that can process payments efficiently or send customized emails to thousands of customers). Automating takes the human hand out of the equation and allows us time to focus on the big picture, to monitor true pain points, to observe and intervene where our energy and ideas are needed most. If as business owners we're too busy personally preparing each customer's returns, how can we possibly also handle marketing, sales, and business development effectively? It's just not doable. If you're drowning in the weeds, you inevitably lose sight of the garden.

The second and equally important way to think about automation is to avoid micromanagement. Remove yourself from having to decide every little detail. I'm not advocating that you ignore the details—as a business owner, you have the right and the responsibility to keep an eye out for everything, even if things are going well. Instead, based on my experience and that of countless other successful entrepreneurs that I have studied, I'm recommending that you free yourself from the shackles of micromanagement and that you empower your staff (when you're at the point where you can afford staff) to make decisions, especially about routine business transactions and processes.

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In your business you need to be focused on building capacity and be wary of any budding dependency upon you personally for transactional work (in the beginning, handling transactional work yourself is fine, just don't lose sight of the big picture). The real value/outcome that you are seeking is having a scalable business that has the capacity to operate and thrive without being dependent on any one person (namely, you).

You can, and you should, train all staff and managers on best practices, on proper procedures, and you should always exert leadership at critical moments (e.g. motivating your team before peak tax season), but by and large you should allow the operation to move forward freely. If you intervene too often, and with too much control, your staff won't ever learn. I repeat—they will not learn, and they will always rely on you for every tiny decision. In essence, they will be disenfranchised, paralyzed from indecision. They won't have a feeling of ownership and responsibility. They won't feel challenged. They will be more likely to quit.

I understand that it can be difficult to let go, especially if you perceive your tax business to be your baby. You may have a natural tendency to overreact, to be present "in the business" at every single

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moment of its day. But like with the healthy upbringing of any child, you need to know when to give them room to move around, explore decisions and consequences on their own, make their own mistakes, and, in so doing, learn on their own skin. Provide your staff with support, training, guidance, and systems that will inspire them and encourage them to make intelligent decisions. Make it predictable. Have set group meeting times (can be virtual), individually calendared one-on-one times with key staff, and an implemented productivity tracking solution to see what is getting done (Asana and 15Five are great examples). Be available for support, but don't interfere at every juncture. Otherwise, you're conditioning them and yourself for utter dependence, and that's not a healthy way to propel a business forward. You won't see much growth if you keep up such patterns.

If you don't trust your staff, ask yourself: is it just a personal issue that you have trusting your employees? Have they given you any reason not to trust them? If not, take steps to move beyond it. Meditate. Meet with a mentor or coach. Visit your therapist. But if you feel like you can't trust your staff because they're incompetent, unwilling, or unable to work hard or make critical decisions, maybe this is a wake-up call to replace your staff, or at least get

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rid of the weak links. As they say, one bad apple can spoil the barrel. Empower your team. Train them. Develop them. If they're up to the challenge, you'll see incremental improvements in their attitude, behavior, decision-making, efficiency, and productivity. Most people will respect you and, in their actions, demonstrate gratitude for your trust.

Communication

One way to communicate with your staff is to go against the tide of the boring or reprimanding emails sent by many managers. Instead, lead through inspiration. Send a powerful story or anecdote on a weekly basis, preferably something real from your life experience that shines a light on a topic or challenge. It doesn't always have to be heavy. It can be fun, or even funny (of course, use your judgment, and avoid sarcasm in emails). Don't just tell your team to do X, Y, and Z. Tell them about a time you overcame a similar challenge, or share a creative approach that worked for a colleague of yours. Adults like to see specifics so they are able to focus achieving results. If your emails are pure fluff or 99% of your emails are just inspirational quotes with no substance and content, that will get stale pretty quickly. They just won't have the desired

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effect you want them to have. Be you, but also take extra steps to be practical and actionable in your correspondence.

As mentioned before, don't rely exclusively on email. Some people won't read it, or they'll skim it and overlook the important points (use bold or bullet points strategically!), or they'll just read it and forget about it amongst the dozens or hundreds of other emails they receive each day. Know when to pick up the phone and make a live connection instead. Whether it's to recognize a worthy accomplishment or to let them know you noticed a dip in performance, don't hide behind an email. A phone call or in-person visit is ultimately more powerful and compelling, both as a reward and as an admonishment. Use both methods selectively, of course, because things tend to lose their effectiveness from over-use.

Outsourcing

It's a natural inclination for some business owners to want to control every tiny detail of their business, even if it concerns functions or processes beyond their scope of expertise. However, it's important from time to time to be able to outsource certain tasks to other people or agencies that specialize in that task.

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For example, let's say your web design skills are basic or even intermediate, and you want to build or redesign your business website. Is it really worth your time to learn how to build certain features, learn new software updates, and so on? Wouldn't it be savvier to find a good web designer (through word of mouth, or online via Google searches or sites like Upwork.com) who can build the site to your specifications with high-quality, beautiful graphics, in a fraction of the time you would require to build it yourself? Sure, you have to pay the designer, but your time is worth money too, and you are paying for quality and speed. Which, in sum, means you are paying for extra capacity to get more done within a given amount of time, which is exactly what a business owner needs to grow a business. Moreover, it will free up your time so that you can focus on sales and marketing efforts, which will help you earn back the money you spent many times over. In fact, don't think of such expenses as "spending" money—think of them as investments that advance your business.

It's not bad to develop an appreciation for various types of work by trying them yourself and learning whether or not you (a) enjoy that work, and (b) deem it a valuable use of your time. The great side effect of attempting to do such work yourself is that if you end

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up deeming it not a worthy investment of your time, you'll have more of a knowledge base allowing you to evaluate the freelancer or agency whom you'll hire to do that work. But before you spend time attempting new tasks, ask yourself whether you've truly exhausted every opportunity to network, market, and sell your services. If the answer is no, you'll be better off letting go of this one task and outsourcing it to the experts, then spending your own hours on growing your business.

Finances

In regards to your businesses finances, be proactive and be prepared for the worst. Build up a cushion of cash, which means you should be saving when times are good and the money is flowing in. There is an old adage to always borrow or arrange for capital before you need it. Make sure you are credible for loans and partnerships wherever needed. Have your credit reports in order. Check your personal and/or business credit report on a regular basis so there are no major surprises (or sign up for a credit monitoring service). And if your credit isn't perfect, don't wallow in sadness. Take action and take steps to fix it, slowly but surely. Your reputation depends on it.

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Establish relationships with local community banks. After using them for your deposits and operating accounts for a number of months or years, have a one-on-one conversation with the bank president or branch manager about them getting involved with loans or lines of credit for your business. If you ever are in a position where you are starting a business or have acquired funds to invest into your current business, take that big check and go to a new community or investor-friendly bank (not one of the big ones, you are only a number there) and have a discussion with them about earning your business, starting with that large current deposit and extending to future ones you will be making as your business grows. Ask them for a line of credit up front (but don't secure the line against your deposit or you won't be able to touch the deposit itself). What you are looking for is extra flexibility for capital needs later on when you need them, even if you don't need them now. SBA loans can be great; however, they are very cumbersome and time-consuming to get in place. Generally, you'll have to have business experience and revenue in place in order to receive one. They work very well when acquiring another practice, but many sellers will not trust that you'll be able to arrange financing (I've never personally done a deal where the buyer arranged acquisition financing, though that's not to say that it doesn't happen).

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Make sure to keep your own books and records up to date. Use a cloud-based accounting system like Xero or Quickbooks Online that imports in your transactions directly from your bank account, making it easier to reconcile and keep accurate and up-to-date financials.

Payroll Monitoring

Proper staffing is critical to the success of your business. If you don't have enough staff, you'll burn out the team you do have. They'll be exhausted even before peak tax season rolls around, and you'll be working double-time to try to fill in the gaps. In short, everyone will be tired and resentful. And when that happens, people are likely to quit—exactly what you cannot afford at critically busy (and otherwise profitable) times.

That said, if you don't properly monitor and manage your productivity percentage, you might go to the other extreme and have too many heads in the office, and you will inevitably struggle for profitability. Keep your payroll expenses a low percentage of your total revenue. A goal for your payroll, including in-office support staff, should be that no more than 20% of your net revenue

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is spent on it. These numbers may be difficult to achieve, especially for new offices, but if you're getting plenty of happy customers in and out the door, and you're processing enough returns, then it is certainly possible. It's important to keep this goal in mind and monitor it frequently. You don't want to forget about it, only to realize at the end of tax season that you're in the red. By then it will be too late, and you won't be able to make any meaningful adjustments to your headcount or to other business expenses.

As the saying goes: what gets monitored gets measured, what gets measured gets managed, and what gets managed gets done! Keep it top of mind because it is vital for your success. It is too easy for payroll to get away from you if you are not watching it on a daily basis. I've witnessed this in several offices over the years and had to intervene. I don't even want to think about what would have happened if I didn't step in (suffice it to say that it wouldn't bode well for the business). You have to be prepared to over-hire leading into the season, as some people will inevitably not work out. Severely over-hire. The star players will step up—give them the majority of the hours. The B players may still be necessary during first peak. After the first peak ends, reduce hours immediately. You may want to lay off anyone that didn't perform well at all at that

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time—however, make sure to keep on those that did adequately, offering them minimal hours or letting them know that they can be on standby. You will need all hands on deck for the second peak at the end of the season, so don't fire everyone, just cut payroll and let them know that it is the nature of the business to slow down in the middle of the season. Use it as an opportunity to coach them, let them study up on more complicated tax forms, and increase their speed of preparing tax returns. You can let them do this on their own time in the office so that if it does get busy, you can put them on the clock.

Software/Tools

Although beyond the scope of this book, there are tons of software programs to support your business. Everything from Dropbox or Box for document management to Constant Contact, Mailchimp, or SendGrid for online marketing. Familiarize yourself with free or affordable tools that will help you succeed. If you're not very tech-savvy, reach out to someone who is. You don't have to learn everything about the internet and technology, but at least hire someone who will. I've become a big fan of Gusto for payroll due to its simplicity and features. Freshbooks for invoicing because

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of its great user experience and ease of use. You can explore a CRM like Salesforce for keeping track of your prospective clients; I recommend Hubspot CRM (which is free) as it is not as cumbersome to administer as Salesforce. For project management software I would recommend Asana over its many competitors. For internal communications with your team, use Google G Suite apps like Gmail, or Slack for live chat. For video conferences and webinars, I recommend Zoom.

Miscellaneous Tips

There are scores of little tips I've picked up over the years. Most of these won't make or break you, but if you give them a shot, here is a non-exhaustive list. Think back to your own business experience. Talk to colleagues, mentors, and competitors, and add to this list. Most importantly, put these tips into action! Don't knock them until you try them. Give them a shot.

Speaking of shots, make sure you and your team get flu shots. Take care of your employees' health and your own. Much of tax season coincides with flu season. Tax season can be ruined if a key person in your office gets the flu during peak season, especially if it spreads across the office. Too much is at stake in

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those three weeks we call peak. If you must, consider allowing occasional work-from-home for people who feel under the weather but wish to continue working.

You can buy cheap post-Halloween candy on Nov 1. Make small goodie bags and give it out to people on the street. Sweet and generous—just like you.

Collect email addresses from every customer. 98% of customers have email addresses. Explain why and how you'll use it.

Talk to people. Yes, that is my tip here. It is that simple. Just talk to people everywhere you go about your business. Things don't spread or become viral by being quiet about them. Everyone does taxes, so you should be talking to everyone.

CEO self-care. Thanks to James Budd for this one. Take care of yourself; you are your most important asset. Your health at the top of the list. I've fluctuated weight up and down over the years, with tax season being a time when weight gain, eating poorly, or eating late and not exercising can creep up. Your business will grow quicker and with less stress if you are feeling healthy. Try a morning smoothie with the following (thanks to my best friend and Happy Tax co-founder Kermit Uregar for this one): spinach, kale, 2 strawberries, ½ of a small avocado, 1 scoop of protein powder, 4-5 ice cubes, water.

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It will give you the morning nutrients you need to conquer the day. In addition to eating right and exercising, give yourself some fun, even during tax season. I've developed a reputation as a hard worker and typically work well into the night during tax season, but I always make time to spend with my kids. I've become more conscious of "me" time in recent years. You need a balance, even when it might mean letting something wait until the following day (just don't do that often if you want to be successful).

Give back regularly. You can make donations to charity, or even give away free tax returns to those who are less fortunate (either as a formal program or just when you see clients in need of every dollar). Participating in community organizations not only gets you exposure in your neighborhood, but it also does social good. Do good, it helps you win.

Don't charge for audit assistance. There are many companies out there that let you charge for audit assistance, or you may be thinking about doing your own program. "Hey, want to buy my product that I am telling you is awesome, but if it isn't you'll have to pay more for me to help you with it?" That is what audit assistance sounds like to me and to most customers. Yes, it can increase your revenue per client, but it is petty and not

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in good faith. The largest tax preparer in the country does this, and it is ridiculed by its own employees and clients.

Create your niche, be unique, be you. Don't just be a boring tax service like everyone else. Do something memorable in your marketing or branding. Cater to a certain market segment that you have an affiliation with, an alliance with, or an affinity to. You don't need to be everything to everyone. 150 million returns are filed each year. There are riches in niches. Use the lessons in this book to figure out how you can find 1,000 or more that will want to use you in every office you have, and you will be on your way to achieving your dreams.

Have integrity, no matter what. The tax industry is rife with fraud, scams, cheating, non-compliance, and shady characters. Even those that usually do the right thing sometimes move into gray areas. Stay out of it. It will catch up with you. There is so much money to be made in helping people legitimately in this business. Just follow your heart and do what is right, not what is easy.

Give it everything you've got. Sure, as mentioned above, you need to have balance. However, don't let your "me time" become a crutch to become lazy. We only have one shot to make our mark on the world. Unlike most tax business owners

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or accountants, I am not the conservative type. I go all in. You might not want to take the levels of risk or responsibility that I do; that said, you should definitely do more than you are doing now. Pushing yourself is about taking yourself to what is comfortable and then going further. Anyone can work eight hours per day. Anyone can make excuses that it is hard to grow a business. Anyone can give up after they are punched in the face every day by the life of an entrepreneur (that's what it is like sometimes, for those of you who haven't gotten started yet). Instead, take the punch, shake it off, figure out a solution, and go back on the offensive. Do so aggressively. That's the only way to win in business or in life.

***

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Related Video: Happy Tax Industry Strategy Session 25

Time to Start Your Tax School? Not.

http://hpy.tax/TMH-taxschool

Take-away: Implement and develop business automation to take care of many business processes. The key is to mitigate the need for daily babysitting of employees and offices. Take care of your finances. Be proactive, not reactive, and make sure to have a safety net of cash for unexpected circumstances. Familiarize yourself with new software tools that can save you time. Cut down on administrative busy work and focus more effort on marketing and sales. Don't try to do everything yourself; consider outsourcing. Even if you can do task XYZ yourself, think like a CEO: it may be cheaper and more efficient in the long run to hire someone to do

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that task for you, while you focus on marketing, sales, and hunting for lucrative partnerships and profitable deals.

Exercises:

Write your calendar. Schedule in regular occurrences of things you want to do every week (trainer, see kids, meal prep, going for a walk, along with standing meetings with your entire team and individual staff members).

Document your tech stack. Use a Google spreadsheet and list all of the technology tools that you use, from tax software to email to marketing and everything else in between. This is a great way to share with your team the accounts that you are using to run the business.

Document your processes and see which you can automate. Even those processes that need to stay manual should still have checklists so that your current and future staff can make sure every part of the process is done in the correct order.

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Mario Costanz / 191

Chapter 14Conclusion

When I was a garbage man picking up some of the world's smelliest trash day after day, no one from the business world ever came to me for business advice. But it's for the best, because back then I was only still learning about running a business, implementing marketing and sales plans, hiring and developing employees, and growing my enterprise and expanding into multiple offices.

Until I actually made the decision to try something new with my life (i.e. when I rented a desk in someone else's office and begin a small, part-time tax preparation business), all my fantasies were just that—pipe dreams. Until that moment, I could fantasize and make endless excuses about why it would or would not work. It was just a way to occupy my mind to get through the tedium of daily garbage collection.

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My success was largely a function not of my innate talent, but rather of my ability to observe other people, to seek mentorship and advice from successful entrepreneurs and industry thought leaders, and to remain open to new ways of doing things, as well as my ability to persevere in spite of adversity. I also have always been a keen observer of what not to do, and learned great lessons from watching others in that respect as well. Sure, I had the very important foundation of good people skills and fearlessness when it comes to marketing and sales, but that alone won't guarantee success. I did not mind rejection—in fact, it only pushed me closer to finding the next "yes!" I made sure to learn from the best and to pay close attention to my own failures and mistakes. Specifically, I made sure to fail fast, adapt quickly, and make improvements to whatever wasn't working—and in doing this, I learned very quickly. It was like getting an MBA of sorts, but without years of schoolwork. My education was based entirely on experiential, observed learning.

One other reason for my success in the tax franchise space is my realization early on that I didn't have to reinvent the wheel all the time. In fact, the systems and processes in place were usually good enough, tried and tested, and if I followed them correctly,

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they would yield positive results. Of course, I was savvy enough to adapt and tweak certain corporate procedures, policies, campaigns, and initiatives to suit my specific business needs, but overall I just followed the plan. Along the way, I encountered a lot of people who complained of failure, people who would point out that the plan was flawed and not yielding any meaningful results—but upon closer inspection, I noticed that most of those people were simply not working hard enough, or not working smart enough. They were instead spending much of their energy fixated on the problem, and not enough of it on finding solutions—which, thanks to human imagination, are actually limitless.

If you find yourself at a critical juncture in your professional life—whether you are about to start a new job, open your first business, or expand your franchise—you should find some comfort in knowing that others have come before you and have both failed and had massive success. Others have paved much of the road with their triumphs and tribulations. There is no need, and no fun, in becoming a martyr just for the sake of making mistakes on your own skin. Be open to the experience and advice of others (just don't follow everyone's advice blindly). You'll avoid a lot of costly mistakes. Hopefully the ideas I've shared with you over the course

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of this book have resonated with you, have given you pause, or have challenged you to take intelligent business risks to launch and grow your business.

The biggest value you can get from this book is by applying the concepts you've encountered here to your own life and business scenario. Occasionally, a concept I mention may not seem very relevant to your situation, but taken as a whole, you should find plenty of advice here that gets your gears turning, particularly if you're exploring the tax franchise industry. Or even if your sights are elsewhere. After all, business is business. A solid foundation of quality customer service, confidence, relentless sales and marketing, close monitoring and quick intervention, and taking care of your employees will help bring success to your business, no matter the industry you're in. And it is these fundamental guidelines and strategies that I've shared with you. Hopefully you find them as useful as I have over the years.

If you've jumped around and skipped a chapter here and there, it might be a good idea to indulge in a quick recap of the major takeaways. These can be found at the end of each chapter, but I've also reproduced them below for your convenience.

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***

Related Video: Happy Tax Industry Strategy Session 16

True Wealth

http://hpy.tax/TMH-wealth

Mario Costanz / 197

Recap of Take-aways

Chapter 1: First Things First

Take-away: In business, and in life, failure is often a necessary first step, not a misstep. Maintaining focus on what matters will help you overcome obstacles and keep moving forward. Leverage your mistakes. Learn from your failures to become a stronger, wiser business owner.

Chapter 2: Identifying the Opportunity

Take-away: Try new things. Consider taking on more than one job—you won't be the first to do so, or the last. Avoid reckless risks and consider calculated ones. Insure yourself financially. Arm yourself strategically and logistically. Prepare yourself mentally. Move forward. And as you do, figure out what works for you...and what doesn't.

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Chapter 3: Lessons and Pitfalls from My Early Years in the Tax Business

Take-away: When you're starting a small business, focus primarily on revenue-generating activity, not on busy work. Find opportunities to tweak your process, improve your service, and elevate your team. Ultimately, focus on working smart, not hard. (Or, better yet, work smart and hard.) To build your business and get to the next level, acknowledge your limitations as well as your strengths. Do what you do best, and build a team capable of filling in your gaps.

Chapter 4: Succeeding Within a Franchise Framework

Take-away: Don't be a lone wolf. Leverage all the resources available to you as part of the franchise network or even just get linked with a community or two online that can become a support mechanism. Franchises are best as the interests are more clearly aligned when everyone is part of the same team. Seek support from successful colleagues and other entrepreneurs. Observe the competition. No man is an island, and the same goes for tax businesses.

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Chapter 5: Laying the Groundwork for a Successful Tax Business

Take-away: When you start setting up shop, every detail counts, but take care not to drown in the details. Remember that sales and marketing are the most important functions of keeping your business afloat, but alone they're not sufficient. You'll need to make sure your customer service is on point, your office looks presentable, and your software is up and running. To make things easier, maintain a checklist. Dot your i's and cross your t's. You don't want a small detail to be your undoing.

Chapter 6: Building & Nurturing a Team

Take-away: Take special care to hire the right team of employees with strong people skills. Specific skills and knowledge can be trained, but a positive customer service attitude cannot be taught.

Chapter 7: Simple Marketing Principles to Grow Your Business

Take-away: Business growth is a result of effective marketing. Focus on returning clients and referrals. This depends on everything from an attractive office to constantly (and politely) asking for referrals. When you're not around, your team is holding down the fort—make sure to arm them with the right tools, resources, and ample

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motivation to ensure that they're maintaining your marketing efforts in your absence.

Chapter 8: Customer Service for the Win

Take-away: Customer service is king when it comes to the health and growth of your business. Your reputation depends on it. Always do the right thing from a customer service perspective, even when it hurts, seems difficult, or appears expensive at first glance. One unhappy client can be terribly vocal and generate a ton of bad press. To avoid this, make the clients feel comfortable. Treat them like family. Customer service can make or break you. Great customer service can take you to the next level faster than good marketing alone. Bad customer service can undo all of your hard work.

Chapter 9: Leadership The Happy Way

Take-away: Don't be shy. I've been an introvert my entire life, so if anyone knows what it's like to lead and be vocal while being shy, it's me. Doing the right thing for your team members will pay dividends many times over and will help your brand to shine with exceptional customer service. If you don't treat them right, they

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won't treat your customers right. Take risks and be bold in your community and your industry. Do not sit idly by on the sidelines while others take the recognition (and clients).

Chapter 10: How to Overcome Failures, Setbacks, Doubts, and Other Common Obstacles

Take-away: In business you'll inevitably need to make tough decisions from time to time. It's important to nip problems in the bud as early as possible (e.g. deal with difficult employees swiftly). Overcoming external obstacles and forces outside of your control can be tough, but sometimes internal battles are tougher. Maintain confidence and clarity for the sake of the business. Seek advice, counseling, or coaching if you need it. Be agile. Be creative. Don't let perfection stand in the way of action. Evaluate the situation, consider several options, and arrive at the best decision for the business. Use your imagination. There is usually more than one way to fix a pesky problem. Find the fastest, most cost-effective, and most sustainable solution you can.

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Chapter 11: Expanding Your Tax Business

Take-away: Before expanding your tax business, make sure everything is in place to support the expansion. If you don't have at least one well-oiled machine in place, do not go out and acquire more offices just yet. Ensure that you have built an all-star team at your first office. They will be your foundation. Practice and perfect the art of providing feedback and feedforward. Learn how to monitor each office and to intervene early when needed—a skill that becomes all the more important when you start operating multiple offices.

Chapter 12: Building Lucrative Alliances Through Networking

Take-away: No business and certainly no entrepreneur is completely self-sufficient. Focus on networking with individuals, businesses, and organizations in order to effectively grow your tax business. Network within the tax industry, with complementary industries, and with industries that may not have anything obvious to do with your business. You'll get referrals from other industries and get ideas that can be translated into the tax business. Build alliances with other service professionals. Consider informal and formal

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referral arrangements with related businesses that are mutually beneficial. Network your way to success.

Chapter 13: Tools & Tricks of the Trade

Take-away: Implement and develop business automation to take care of many business processes. The key is to mitigate the need for daily babysitting of employees and offices. Take care of your finances. Be proactive, not reactive, and make sure to have a safety net of cash for unexpected circumstances. Familiarize yourself with new software tools that can save you time. Cut down on administrative busy work and focus more effort on marketing and sales. Don't try to do everything yourself; consider outsourcing. Even if you can do task XYZ yourself, think like a CEO: it may be cheaper and more efficient in the long run to hire someone to do that task for you, while you focus on marketing, sales, and hunting for lucrative partnerships and profitable deals.

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Afterword

Thank you for taking the time to read my book. I am hopeful that I was able to add some value to your life even if only in a small way.

The tax business has been wonderful for me over the years and I hope that you will experience some of the same joy and profits that I have as a result of it. It will not always be easy however don't give up. You can achieve the goals you set out to if you follow the instructions in this book.

If I can ever be of any assistance to you, send me an email and I will do my very best to guide you or introduce you to the person who can.

Mario@TheProblemSolver.com

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Resources

Hubspot

AdEspresso

Callfire

Zapier

Zendesk

Survey Monkey

Autopilot HQ

Formstack

Asana

Twilio

Slack

Sendgrid

HotJar

Blogmutt

Quuu

Zoom

Buffer

PandaDoc

Instapage

Grasshopper

Clickfunnels

StreamSend

Wordpress

Stripe

Buffer

Xero

Canva

Gusto

RFuel4

Happy Tax App

Talent LMS

Happy Tax Software

Zoho

Sparkhire

Google Sites

Google Adwords

Facebook Ads

Adroll

Mario Costanz / 209

Glossary

PTIN – Preparer Taxpayer Identification Number – Identifying number given to those who register with the IRS to do taxes.

EFIN – Electronic Filing Identification Number – Tax business owners need an EFIN to electronically file tax returns. They are assigned by the IRS to those that have completed the process to become an Authorized IRS e-file Provider.

ERO – Electronic Return Originator – The name of those that possess an EFIN and are approved as an Authorized IRS e-file Provider.

E-SERVICES – The tools that the IRS provides online for tax professionals to apply for their EFIN, Transcript Delivery and TIN Matching.

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CAF \- Centralized Authorization File Number – An identification number assigned by the IRS to tax professionals who are listed with a third party authorization for one of their clients with the IRS. Once the number is issued, it can be used for additional clients after authorization.

DCN – Declaration Control Number – The number assigned to tax returns electronically filed with the IRS.

Ack – Acknowledgement – After a tax return is transmitted electronically to the IRS, the IRS electronically acknowledges the receipt of each return with either an Acceptance or Rejection.

CPA – Certified Public Accountant \- Those that are CPA's must pass a state licensing test and do regular continuing education in order to achieve this prestigious designation. Many CPA's prepare tax returns while others preform auditing, accounting or other financial analysis.

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EA – Enrolled Agent \- A person who has passed a three-part IRS test covering individual and business tax returns. This designation may also be awarded through experience as a former IRS employee. EA's may represent taxpayers before the IRS with collection cases, audits and appeals.

RT – Refund Transfer \- A product offered through a bank intermediary that enables a tax client to have their tax preparation fee taken out of their tax refund. Essentially what happens is that the routing and account number for the bank goes on a client's tax return and the IRS and/or State sends the refund to the bank who then in turn takes out the tax preparation fee and their service fee and provides the rest to the taxpayer.

ERC – Electronic Refund Check – A type of refund transfer where an ERO prints an actual check in their office for the tax client to pick up.

ERD – Electronic Refund Deposit \- A type of refund transfer where a bank product provider deposits the tax refund into a tax clients account.

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EIC or EITC– Earned Income Tax Credit – A refundable tax credit for low- and some middle income working taxpayers. The amount of EIT varies depending on income and number of children.

FMS – Financial Management Services (changed to BFS \- Bureau of the Fiscal Service) \- The name of the part of the Department of that issues IRS tax refunds. A taxpayer with FMS debt would have their refund withhold towards to pay the debt and not receive their refund.

FA – Franchise Agreement – The agreement that is signed in order to create a franchisor/franchisee relationship.

ZEE – Franchisee \- Zees are a nickname for franchisees. Franchisees invest in a franchise business with a franchisor. They own the business and utilize the process, systems, support, tools and technology of the brand.

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AR – Area Representative – Owns a specific geographic region in a franchise and acts like a mini-franchisor sharing in the franchise fees and royalties. Pays an upfront fee in return for the revenue shares and providing coaching and lead generation services for the franchisor.

FDD – Franchise Disclosure Document \- The legal document that is required to be presented to prospective purchaser of a franchise prior to a contract being signed. It was formerly known as a Uniform Franchise Offering Circular (UFOC).

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About the Author

Speaker. Author. Visionary. Mario Costanz amongst many other things excels in these categories.

As a young father at just 23 years of age, Mario found himself endrudged with the day to day 9-to-5 working lifestyle but knew the man he faced in the mirror was longing to break free of the "JOB" and become a successful entrepreneur.

After many ups and downs, and fighting the urge to quit on entrepreneurship Mario Costanz found himself in a new arena of success. Taking his first tax class was just the beginning of what would turn out to be one of the most lucrative, inspirational, and disruptive business models the industry has seen to date.

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After finding early success as a tax office owner opening up 99 offices in the U.S. Mario realized that the way tax preparation was being done was insufficient and poorly managed. He envisioned the idea of a better, more secure, and convenient filing experience now known as Happy Tax.

In 2014 Mario sold off his 99 offices and invested his capital into Happy Tax. To date, Happy Tax has gone from a simple vision to make filing taxes safer, more secure, and better for everyone, to an industry-leading opportunity for entrepreneurs and professionals to own a business without the stresses and financial burdens of a typical startup.

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Learn More

https://www.linkedin.com/in/MarioCostanz

https://www.facebook.com/Mario.Costanz

https://www.youtube.com/HappyTax

https://www.facebook.com/HappyTaxService

https://www.linkedin.com/company/Happy-Tax

https://twitter.com/HappyTax

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Further Information

Interested in learning how you can own your own low-cost, high return tax business? Go to our special link just for Taxes Made Happy readers at grow.gethappytax.com to learn more and get in touch with one of our representatives.

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## Landmarks

  1. Cover

