Understanding Tax Franchise Profit Cycles
The business of tax is inherently cyclical. It's a lot like running a seasonal business at a tourist hub or other destination: when it's busy, it's very busy, but during off season it's hardly busy at all. As a new tax franchise owner, you need to understand the details of how it works, and how to best manage your resources during the busy times and during the not so busy times.
Why Cycles?
The cycles are a necessary product of this kind of business. There is a fixed deadline by which everyone must submit their paperwork or file for an extension. If they don't meet that deadline, there are penalties. The deadline is dependent on information that doesn't arrive until New Year's, or late December at the earliest. That leaves a window of some four months: from January through April.
Staff For Your Busiest Weeks
Almost invariably, the busiest weeks occur during the first few weeks of January. People finish with the holidays and immediately put their mind toward refunds. The majority of people will want to get their money quickly, and so they'll come in sooner rather than later.
Make sure that you have enough staff to handle an influx during this time period. It is absolutely critical that you run at full capacity during this initial time. You can expect to see a lot of new business during these weeks as well, so making a positive first impression is important. Part of that is ensuring that your customers are able to get fast service. Working at full capacity during these weeks helps make that happen.
The Second Rush
Your traffic will die down substantially once those first few weeks are over. You can expect to see some business, but not as much as previously. It is wise to ensure that you always have at least one prep worker at your tax franchise, but you probably won't need much more than that. Things will pick up again in the weeks before the filing deadline.
Budget Your Tax Franchise Profit
The most important thing to consider is that you'll earn a rush of money during the busy season, but you'll have to save it to cover expenses during less busy times. The best way to manage this is to work with either an experienced franchise company that can help and advise you or to do extensive research in your area. Find out how much you can expect to make. Ensure that you understand the busy times and the calm periods.
Above all, know exactly how much you need for operations during the off season and put it aside ahead of time. Non-negotiable expenses €" rent, utilities, etc €" must be paid first. It can be tempting to spend the first dollars in celebration, but saving them is the best policy in the long run.
Why Cycles?
The cycles are a necessary product of this kind of business. There is a fixed deadline by which everyone must submit their paperwork or file for an extension. If they don't meet that deadline, there are penalties. The deadline is dependent on information that doesn't arrive until New Year's, or late December at the earliest. That leaves a window of some four months: from January through April.
Staff For Your Busiest Weeks
Almost invariably, the busiest weeks occur during the first few weeks of January. People finish with the holidays and immediately put their mind toward refunds. The majority of people will want to get their money quickly, and so they'll come in sooner rather than later.
Make sure that you have enough staff to handle an influx during this time period. It is absolutely critical that you run at full capacity during this initial time. You can expect to see a lot of new business during these weeks as well, so making a positive first impression is important. Part of that is ensuring that your customers are able to get fast service. Working at full capacity during these weeks helps make that happen.
The Second Rush
Your traffic will die down substantially once those first few weeks are over. You can expect to see some business, but not as much as previously. It is wise to ensure that you always have at least one prep worker at your tax franchise, but you probably won't need much more than that. Things will pick up again in the weeks before the filing deadline.
Budget Your Tax Franchise Profit
The most important thing to consider is that you'll earn a rush of money during the busy season, but you'll have to save it to cover expenses during less busy times. The best way to manage this is to work with either an experienced franchise company that can help and advise you or to do extensive research in your area. Find out how much you can expect to make. Ensure that you understand the busy times and the calm periods.
Above all, know exactly how much you need for operations during the off season and put it aside ahead of time. Non-negotiable expenses €" rent, utilities, etc €" must be paid first. It can be tempting to spend the first dollars in celebration, but saving them is the best policy in the long run.
