Best Approach to Seeking Overflow Work

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#1
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What is the best approach to soliciting overflow work from local firms to see if they have clients they would like to pass off to a more affordable/hungrier provider?

Letters?
Cold-emailing?

Proposing a lead-buying agreement?

Thoughts?
 

#2
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Do you have a niche or specialty? Or an ideal client?

It might be worthwhile to reach out to firms that do not practice in the same area, so you can build a referral relationship.

I wouldn't look for "general" overflow as a lower cost provider. I suspect that firms will dump their very small prospects and/or problem clients on you. But, you may be looking for very small clients, I don't know.

I've found that relationships with financial advisors and investment managers are particularly synergistic and lucrative, but step one is defining your practice and your ideal client, otherwise you'll be all over the place.
 

#3
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This would be a highly individualized and relationship based arrangement. There's no cookie cutter way to establish it.
I would reach out with a phone call to begin a conversation and meet in person to work out details and establish trust.
~Captcook
 

#4
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ManVsTax is correct, for this type of arrangement to be successful, you have to be in a market or niche not served by the referring firm. Example, I still take on tax work but another CPA I know has decided to focus on virtual services for media companies, only, and refers out everything else to me, including prospects that require tax work. He's referred six prospects to me in just the past few weeks, one of which I turned down and I have accepted several others.
 

#5
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Thanks for the advice, all!

I think that this is terrific guidance for an experienced practitioner... for someone fairly green looking to start a practice? Small and problematic would not be outside of my scope :-)
 

#6
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Small and problematic should be outside your scope. I acquired the practice of a retiring EA a little over two years ago. It took me a while to accept that some clients are a bigger drain on your time than they are worth. Now, some clients are trainable. My worst client went to being one of my most profitable and all it took was one (ahem) frank exchange of views. Some clients, though, are not trainable or, at least, not trainable at a profit. The trick is to identify which is which and I am still developing that skill.
 

#7
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AcctgForDummies wrote:I think that this is terrific guidance for an experienced practitioner... for someone fairly green looking to start a practice? Small and problematic would not be outside of my scope :-)


You'll seriously regret that mindset if you adopt it. Never allow yourself to take on problematic clients if there is any indication, in advance, that they will be problematic. It is not only a headache but a potential E&O claim if they are also litigious.
 

#8
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I will emphatically echo the thoughts being shared here about accepting problematic clients.
You really have to think about why they are problematic. People can have messes and not be problematic. There is always another dynamic at play that creates the problems and it is usually related to their not valuing your work. Whether that translates to fees, attention, or cooperation, none of that allows you to put yourself in a place of growing and developing relationships.
If you truly are willing to take on these kinds of clients, I hope you have also developed the skill of firing clients. You'll need it.
~Captcook
 

#9
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It addition to what's been said by others...

It can be hard to turn down any type of work when you're starting from zero. However, it'll help tremendously if you learn the general red flags (frequently discussed in the penalty free zone) and turn down a prospects when multiple red flags pop up.

I see that you're an unenrolled agent. While you work on building your practice you may want to consider working toward becoming an EA. It may allow you to justify higher fees and some clients will value those letters.

Headache clients usually get fired eventually. As your practice gets closer to critical mass, you'll start to realize more and more how important screening a prospective is to minimize turnover and to identify good, long-term clients.
 

#10
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From my experience, these "headache" clients just need some training. I used to work at a boutique high net worth focused firm and they were very selective and fired clients that I would have loved to have on the side. The reality is that the partners were so busy that they didn't care to teach/train these clients.
 

#11
ATSMAN  
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Networking! That is what I used in my earlier days to get work that other accountants wanted to reject for whatever reason. Remember you will generally get "crap" but now and then you find diamonds in the rough!
 

#12
smtcpa  
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@IDunnoITDepends, what experience and types of clients are you looking for? I am getting ready to cull a bunch of 1040-only clients and really need help with bookkeeping and accounting for clients.
 

#13
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ATSMAN wrote:Networking! That is what I used in my earlier days to get work that other accountants wanted to reject for whatever reason. Remember you will generally get "crap" but now and then you find diamonds in the rough!


I agree, networking is one of the best ways to get your foot in the door, so-to-speak. Chamber events are a great way to meet business owners and professionals that may be willing to refer work to you once they know and trust you. It allowed me to meet a lot of professionals that now provide me quality referrals. Some of those clients I have obtained through networking have since been let go, but it has absolutely been worth the effort.
 

#14
ATSMAN  
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One little issue that pops up now and then is a referral source seeking a "favor" that could sour the business relationship. You have to manage this very judiciously and wisely so that it does not come back to haunt you later. I had a situation once where the referring accountant had been very "loose" with the tax return and wanted me to not rock the boat but I refused because at the end he was going to wash his hands off and I just took on the trouble!
 


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