Bookkeeping and tax preparation professionals must take their heads out of the books when it comes to analyzing the potential success of their business. That’s where a SWOT analysis comes in handy by helping you identify the strengths, weaknesses, opportunities and threats your firm faces in finding enough work to stay busy year round. A carefully researched SWOT analysis also helps you decide what you realistically can and cannot do to reach your business goals.
If you or your staff has certifications, such as through the American Institute of Certified Public Accountants or the American Institute of Professional Bookkeepers, this is a strength. A degree in business, experience running a company, or a master’s degree in business administration is another advantage. A background in bookkeeping and tax preparation services is another plus. Starting your business with several clients is also a strength, since you have cash flow coming in while you find more clients and build the business.
While bookkeeping is year-round work, much of the real workload is handled at year-end. Tax preparation is busiest in late winter, especially if you work with individuals. That leaves lots of time in between in which you may have little work and employees to pay, a definite weakness. The cost of starting up the business, such as buying bookkeeping and tax preparation software, marketing to find clients, and costs to hire experienced staff, can be a weakness if funds are limited.
Access to tax accountants willing to work during tax season on short notice gives you an opportunity to take on more clients during your busy season. Teaching the use of accounting and tracking software to small-business owners so they keep up with some of their own bookkeeping gives you additional income, while encouraging the businesses to use your tax preparation services to handle year-end activities. Networking with attorneys and financial advisers who serve the same market as you do gives you a way to grow your business through the power of referrals. If you do not have CPA certification, offer to handle the bookkeeping that CPAs need done for the clients as a way keep busy.
Although teaching the use of bookkeeping software programs can give you an additional source of income, it also means some of your prospects can now handle their own bookkeeping, a threat to your bottom line. Competing bookkeeping and tax preparation companies may be another threat, especially if their branding is already established. Trends that push individuals to handle their own taxes through the use of off-the-shelf tax software is a threat if you help individuals with their tax returns.