The tax off-season can be a challenge for some tax preparer trying to maintain a steady income. Like many of your personal finance and small business clients, you are trying to reach a stable financial state and comfortably afford your mortgage, your kids’ braces, and, hopefully, a vacation or two a year that don’t involve visiting family on the opposite coast.
Some tax preparers even take alternate jobs in the financial industry to supplement their income May through December. These opportunities can be quite stable. The most common ways tax preparers bolster their revenue in the off-season are:
- Tax representation for clients as an IRS enrolled agent (EA)
- Running payroll for small to mid-sized businesses
- Freelance bookkeeping for other companies
Others invest their time into selling securities with their Series 6, Series 7, and Series 63 licenses, sell other financial products, or maintain another job during the slow months.
All of these side-incomes have commonalities: they require investing a lot of time (and money) to become trained and licensed in yet another financial services field, completing continuing education requirements, and provide very little control over the products or services you are providing to clients.
Some tax preparation specialists have chosen a different path in the off-season that they find profitable year-round: credit repair services.
As a credit repair consultant, you can work when, where, and how it best fits your lifestyle and financial goals. You will keep your bread-and-butter tax preparation business income and do credit repair services for existing clients.
Here are three reasons why professionals supplement their tax preparation income with credit repair services:
1. Everybody needs credit repair
Similar to the fact that everyone needs to file their taxes, you would be hard pressed to find a friend, family member, or neighbor who would not want their credit score to be higher than it is. The main difference between tax preparation and credit repair is that the former is a once-a-year source of income for you where the latter is ongoing and there is a need all the time.
Most people in the United States can benefit from a better credit score. Whether they are in debt, in need of a new car, or trying to pay less over the life of their mortgage, people in your community deserve to understand how credit works and get the help they need. Read this article on the 15 Reasons for consumers to repair their credit from personal finance expert The Balance.
● 79% of credit reports contain errors – in fact, the Brookings Institute recently unveiled that this significant flaw in our credit system causes many consumers to appear riskier than they are
● The National Consumer Law Center found that “credit bureaus have little economic incentive to conduct proper disputes or improve their investigations” which means that consumer may give up after one failed attempt to remove faulty items
● Credit repair takes about 6 to 8 hours to learn and five minutes a month per client after the initial credit audit
2. Build upon your existing business
Many credit repair business owners are surprised at how many clients come pouring in once they open the floodgates of offering credit repair services. In fact, almost all of your existing tax preparation clients can improve their financial situation with credit repair services.
When your tax preparation business slows down in the off-season, you can ramp up your credit repair business without having to go in search of new clients as your current client list is likely teeming with people who can benefit from credit repair services and they already trust you with their financial information.
Charge an affordable monthly fee for clients and work hard to remove items, following a proven system and backed by reliable business software. This scalable business model gives consumers the credit score they earned and earns you a stable off-season income.
Happy clients already refer clients to you for tax preparation. Imagine if you could help these people and their referral network position themselves better financially with holistic financial services. Add credit repair services to your tax preparation business and you can help clients to position themselves better financially throughout the year. You become more valuable to clients while increasing your clients’ lifetime value to your business.
3. Add a skill to your financial repertoire
Your financial background and credibility in the community as a financial advisor gives you an incredible advantage if you offer credit repair services. Most credit repair business owners spend the first few months developing skills and drumming up credit repair clients. When you do credit repair for existing clients, you are building your tax preparation business as well by making yourself indispensable to clients. And, as you recruit new credit repair clients in the off-season, you’ll be their natural choice for a tax preparer in the new year!
Credit repair experts teach people better financial habits so that they can improve their credit scores and maintain their excellent credit. If you can help people be financially savvy with their taxes and create lasting financial habits that help them throughout the year, you will have a steady stream of referrals from happy clients.
Teach tax preparation clients simple habits like:
- Pay existing debt down, below 30% of the credit limit
- Do not open new lines of credit during the credit repair process
- Create a budget (and stick to it)
The more services you can provide to your tax preparation clients, the more they will think of you as their go-to finance person.
4. Make money while you sleep
Unlike a tax preparation business, your credit repair business will make you money while you are on vacation–as long as you put in the work up front. When you start a credit repair business, you must invest the time and mental energy to learn industry best practices, research your target market, and create a reputation for yourself by putting in the hours for credit repair clients.
Here’s how credit repair services give you passive income:
1) Perform a credit audit for your client (this can be automated in seconds by your business software)
2) Create a plan to remove faulty items and send dispute letters to the credit bureaus (Transunion, Experian, and Equifax)
3) Check on the progress after 30 days, keep aware of all communication from the bureaus and creditors to your client, and make sure that things are being taken care of
This step takes about five minutes per client per month, usually improves clients’ credit scores within months, and creates a scalable business model.
Credit repair services create passive income through the affordable monthly fee your clients pay. You can help hundreds of clients a month and make a six-figure salary with a minimal time investment and short learning curve. (You can calculate your potential credit repair services income with this projected revenue calculator.)
Learning a new industry like securities or another financial product can take months or even a year to master (think of all the training time, taking and retaking tests, continuing education costs).
Invest six to eight hours in credit repair training and make significant revenue in a business that is adjacent to your current community reputation: helping people keep more of their hard-earned money.
To start offering credit repair services after this tax season, you can:
1) Learn more about credit repair by visiting creditrepaircloud.com/blog
2) Get training from experts in the field in the American Credit Repair Academy
3) Join a community of experts, run your business with trusted software, and start building a profitable credit repair business that gives you a financial cushion during the off-season
Give your tax preparer income a boost this year by offering clients credit repair services!
Daniel Rosen is the founder of credit repair software company Credit Repair Cloud and an expert in running a credit repair businesses. He is a mentor and thought leader for thousands of credit repair businesses across the United States. Daniel is the author of
link to tax preparers LP