How can you charge clients for tax planning ideas when Google delivers them for free? The bad news is, you can't. The good news is, you don't have to!
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How Can We Charge for Ideas When Ideas Are Free?

Last month, Apple rolled out an iPhone update that let me tell my phone’s apps not to send data to Facebook. I was delighted to take advantage of that opportunity, and not surprised that something like 96% of iPhone owners joined me in doing the same thing. I understand the ads I see won’t be quite as tailored to me – and that’s fine, I ignore most of them anyway.

But Facebook still knows I’m in the tax business. So I see ads from TMN’s competitors in the “build your tax business” space. And I see ads from people in the DIY-cut-your-tax space, including a Shark Tank guy who violated one of our trademarks, and another guy who reveals the “secret” of the Augusta Rule – while blithely misspelling “Augusta.”

This raises a terrific question that we recently discussed in the TMN Facebook group and on a Wednesday Member Call. How can you charge clients for your ideas when they can go online and find them without even looking?

The bad news is, you can’t. The good news is, you don’t have to. Because we’re not in the idea business. We’re in the savings business.

Tax Master Network Helps Tax Professionals Provide Tax Savings to Their Clients

The path from “blissful ignorance” to “pain over taxes” to “idea to save taxes” to “implementing that idea” to “enjoying the benefits of that idea” is long and winding. It hopscotches its way around all sorts of obstacles your clients overlook when they say “how can you charge me $2500 to recommend an S corp when I can go online to read about S corps, use LegalZoom.com to form my S corp, and sign up with ADP online to run my payroll when I get to that point?”

Clients sometimes wrongly perceive us as trying to make windfall profits merely by recommending ideas. If that were truly the case, they’d be right to object. That’s why it’s important that we frame our story to encompass all the value we deliver.

My favorite analogy for explaining our value likens tax planning to going to the doctor. If you’re sick, and you visit the doctor, typically three things happen:

First, the doctor examines you and diagnoses the problem. Does your stomach hurt? Maybe it’s food poisoning. Maybe it’s something more serious like pancreatitis. Maybe it’s contagious death cancer. Regardless, the doctors has to figure out what the problem is before they can solve it.

Next, the doctor prescribes the solution. What’s it going to take to fix the problem?

Finally, someone has to fill that prescription. That might involve a trip to the pharmacy for medication. It might mean surgery. It might mean physical therapy. But if the problem is serious, it’s not just going to fix itself.

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Tax Master Network-style Tax Planning Follows The Same Three Steps of “Diagnose, Prescribe, Fill”

1: The diagnosis takes the form of an assessment. This is where we sit down with the client, look over their business and personal tax returns, and look at any supporting documents like investment portfolio statements. We’ll ask a series of questions about their goals and resources. Then we diagnose any mistakes and missed opportunities that might be costing taxes they don’t need to pay.

2: The prescription takes the form of a plan that introduces clients to the green lights they’re missing. In other words, we “give them the idea.”

3: Finally, The Tax Operating System® “fills the prescription.” This includes the implementation guides, checklists, forms, and templates, and referrals to specialists that clients need to put the strategies to work, document them properly, and audit-proof your returns.

Here’s what some clients miss: they think we’re charging just for writing the prescription. They overlook our value in diagnosing the problem (and avoiding blind spots they may have missed). And they overlook our role in implementing the concepts and strategies we prescribe. That’s the real key to getting it done. And that’s why the story you tell can’t just focus on the ideas.

Here’s a great question to ask prospects thinking about buying a $20 bone saw on Amazon and doing their own orthopedic surgery:

“When was the last time you did something very important, for the very first time, and nailed it?”

That question really says it all. And it puts the emphasis squarely on doing it – not just knowing the idea.

As we’ve said for over a decade now, lucror vestri dignitas – charge what you’re worth. Ideas are great – but they aren’t the core of your value. Ultimately, your value comes from the results you deliver. And that, in turn, comes from implementing those ideas.

The Next FATE (Financial Advisor Technical Education) Class Begins in July (Members Only)

Here at TMN, we’re not just turning tax preparers into tax planners. We’re turning them into full-service financial advisors. Members who finished our Financial Advisor Technical Education (FATE) 101 program in January (yes, January!) are already setting client appointments, gathering assets, and delivering even more measurable value. The best part is, you can join them! We’re launching our next FATE 101 cohort for a three-week training program on Monday, July 12.

Visit www.members.taxmasternetwork.com/FATE for more information and a link to sign up!

The Briefs is a weekly column on marketing and business planning for tax professionals and financial advisors looking to better serve clients and grow their business. 

Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.
Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.

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