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Business Plan for Tax Office or Franchise

News & Blog

The following is a sample business plan for 1040TaxBiz affiliates. This is designed to help you start your own business plan. Information and data will vary from business to business. Please contact 1040TaxBiz for any questions you might have related to starting or growing your tax business, office or franchise.

Executive Summary

(Tax Services USA), and affiliate of 1040TaxBiz, is a profitable small business that provides seasonal tax preparation services. It is owned and managed by (James Washington) in (Houston, Texas). The company offers tax preparation and e-filing services from January to April for federal and state tax returns. It offers these services to individuals, families, small businesses and home-based businesses. In order to start and grow the company, (James Washington) has successfully registered for his IRS PTIN and EFIN, found a location, obtained tax preparation software, setup the computer systems, has received specialized training, and developed marketing to bring in customers. All this was done with the help of 1040TaxBiz. The goal this next tax season is to expand the business by opening one more location.

Company Summary

(Tax Services USA) is owned and managed by (James Washington) in (Houston, Texas). The company is affiliated with 1040TaxBiz. It was established in 2013 as a single traditional tax office. It plans to open one more location this next tax season to better serve its current and future clients.

Company Ownership

(James Washington) is founder and 100% owner of (Tax Services USA), a sole proprietorship.

Company History

Prior to 2013, (James Washington) worked in a tax office for two tax seasons. He wanted to be his own boss, so he opened (Tax Services USA) to provide tax preparation and e-filing services to his friends, family and local acquaintances in and around (Houston, Texas). He borrowed ($6000) from family and leveraged ($3000) he had in savings to start the project. He filed enough tax returns in 2013 to pay back the money borrowed and store a little away for next tax season. He worked hard and gained a great reputation over the next two years that he plans to open a second location in 2016.


  • Federal income tax preparation
  • State income tax preparation
  • Tax return e-filing with IRS and Texas / Electronic return originator (ERO)
  • Tax refund anticipation loans (RAL)
  • Multiple options to receive tax refunds

Past Performance / Balance Sheet: 2013, 2014, 2015

Gross Margin:
Gross Margin %:
Operating Expenses:


Balance Sheet Example

Market Analysis Summary

A start-up business in the tax preparation industry has one major advantage. It is required by federal law to submit an income tax return. Tax preparation is big business. Over 38,000 firms operated in the field last year generating $7.7 billion in revenue. The IRS processed about 82 million professionally prepared tax returns last year, and that number is expected to increase. According to an industry report, the profitability of tax preparation, bookkeeping, and payroll services was second only to privately held oil and gas extraction companies. For the most part tax preparation businesses are small. 37% are operated by a single person. 53% are operated by less than ten people. There were over 128,000 tax preparers in the field last year, and approximately 144 million individuals filed tax returns last year. That leaves plenty of tax returns to go around.

Market Segmentation

Market segmentation is a marketing strategy which involves dividing a broad target market into smaller groups of consumers or businesses based on specific characteristics. Segmentation can be based on geography (location), demographics (age, gender, income), or culture (religion, ethnicity). Knowing who is best suited for your services and positioning yourself where they are improves your chances of success. Identify those who would use a tax preparer in your neighborhood.

Market Analysis

Very Small Businesses (1 to 10 employees)
Other Small Businesses (11 to 99 employees)
Age Distribution
Ethnicity Distribution
Gender Distribution
Language Distribution
Religion Distribution
Income Distribution
Education Level

Target Market Segment Strategy

The prime market for (Tax Services USA) is English speaking adults between the age of 18 and 64 who have one or more children. Senior citizens, single individuals, those without children, and large corporations are less likely to use standard tax preparation services as compared to their counterparts.

Marketing Strategy

A comprehensive marketing strategy is used to generate prospects for tax preparation services. Some of these strategies include: website, social media, email, advertisements in local community newsletters, and talking directly to friends and neighbors. (Tax Services USA) also leverages marketing opportunities with 1040TaxBiz, such as a listing on their website and a tax kiosk in a local convenience store that has a lot of foot traffic.

Competitive Edge

(Tax Services USA) maintains a competitive edge in the market in three ways. First, through its comprehensive marketing approach it maintains high visibility within the local area. Second, (James Washington) is always friendly and professional when communicating with others. Third, (Tax Services USA) leverages the marketing reach of 1040TaxBiz.

Sales Forecast

Unit Sales:
Unit Prices:
Direct Unit Costs:
Direct Cost of Sales:

Management Summary

(James Washington) is CEO and sole manager of (Tax Services USA). (James Washington)’s resume is attached in the Appendix.

Personnel Plan

When the new seasonal location opens, it will be necessary to hire a person to manage and fulfill all the duties required to operate it. This person must have previous experience in a tax office. To assist with overflow, virtual tax preparer services provided by 1040TaxBiz will be deployed during the busy part of the tax season. This system uses interactive video displays, printers and scanners to prepare and files taxes.


(James Washington):
1 Employee per Location:

Financial Summary

An initial investment before tax season is necessary to ensure that locations, equipment and personnel are secured and ready to go at the beginning of tax season in January. In this case, the funds necessary are available through careful management of previous year profits. The primary costs include: space rent, equipment acquisition, marketing costs, and employee training.

Important Assumptions

1040TaxBiz is an integral part of cost savings during this pre-tax setup. For a small fee, they provide the equipment, training and some marketing. Other costs include space rental, utilities, telecommunications, marketing and 2 employees prior to the start of tax season.

Break-Even Analysis

Monthly Revenue Break-even:
Average Per-Unit Revenue:
Monthly Units Break-even:


Pro Forma Profit and Loss

Pro Forma Profit and Loss

Pro Forma Cash Flow


Resume for (James Washington)

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