Certified public accountants aren’t the only ones feeling stressed this time of year.
Consultants (like me!) and business owners of all types are doing their best to close out last year‘s books, get feedback from their accountants, and file accurate returns. In my experience, preparing for April 15th (or, as this year’s calendar falls, April 17th) requires a quantifiable amount of work and brainpower. Also, it usually involves writing several painful checks.
Although we can’t change the reality of tax day, we can at least dream. So, in the spirit of dreaming, here are seven things that you’d probably rather be doing this time of year.
1. Billing Time to Clients
In the consulting profession, the name of the game is maximizing billable hours and minimizing non-billable stuff.
Working on your taxes is particularly frustrating for two big reasons. First, every hour spent on your taxes is one that can’t be billed to someone else. There’s a clear opportunity cost associated with this situation. If you spend eight total hours on your taxes and your rate is $50 per hour, you’ve essentially “spent” $400 (and that doesn’t include what you’ll pay your CPA).
To make matters worse, it’s not like working on your taxes is a very gratifying experience. Gathering 1099s, pulling last year’s P&L statement, reviewing expense categories, and preparing summary sheets for your CPA isn’t exactly complicated work. It just consumes a lot of time – time that might be better spent (in a perfect world) on something more valuable to your business.
2. Prospecting & Networking
It’s hard to maximize your billing potential without a full book of business. As I’m sure you’d agree, one of the best ways to build a solid book of business is through networking.
In today’s fast-paced consulting world, there are a limitless number of ways to generate new opportunities for your business. Here are just a few ideas that could yield meaningful results with relatively minimal effort:
- Asking for referrals from existing clients
- Offering new services to existing clients
- Networking through consulting marketplaces, such as Upwork.com
- Engaging in LinkedIn groups
- Attending local networking events
- Traveling to conferences and workshops
If any of the previous ideas caught your attention, consider creating a task to circle back soon. Would an April 18th start date make sense? I’m thinking so.
3. Continuing Education
“It’s not what you know, it’s who you know.”
I’m sure you’ve heard it said many times. But, is it really true? For successful consultants, I’d say a more accurate statement goes as follows:
“It’s what you know, who you know, and what you do about it.”
Knowing a bunch of smart or well-connected people is no doubt important. Your clients appreciate the introductions you’re able to make. But, where does that leave you? You’re not in the business of simply playing matchmaker. Without the right mix of knowledge and skills, clients will find it difficult to keep you around for very long – despite the great connections you bring to the table.
Smart consultants find time to keep learning, thereby making themselves more useful. Unfortunately, some consultants put continuing education on the bottom of their to-do lists. Balancing the many client expectations and seasonal demands (such as taxes!) is challenging.
Continuing education can wait until next month, right? On the other hand, December will be here faster than you think!
4. Creating New Passive Income Streams
In reality, consultants are in the information business. Clients need information, and you’re more than happy to give it to them (for an hourly fee, of course).
Here’s the big problem with the consulting model: There’s way more clients in the world than you have hours. Even if you doubled your number of billable hours, hired a team to support you, and raised your rates, you would only be scratching the surface of what’s possible. For these reasons, some consultants package their knowledge into passive income streams. Here are a few examples to get your creative juices flowing:
Paid Webinars: Webinars can be an excellent way to share your knowledge with hundreds of clients at once. What if you could get 100 clients to simultaneously pay for the same hour of your time? That would have a pretty big impact on your bottom line, wouldn’t it?
Online Training Courses: Some topics are evergreen in nature, which can make for perfect online training courses. In your field of expertise, what are the most common challenges your clients face? Would the creation of an online course help solve their problems while enhancing your profitability and personal brand?
Books: With self-publishing on the rise, it’s easier than ever to become an author. Authorship can help establish you as a thought leader, but it can also serve as an incremental revenue stream.
5. Spring Cleaning of Your Records
Like the dust that has collected under your couch all winter, your CRM could probably use a good old-fashioned spring cleaning. If you weren’t frantically looking for that missing 1099, you might have time to take care of the following:
Adding New Contacts – Not everyone you’ve met in the last year has made it into your CRM. For example, your thought leadership efforts have really started to pay off in several LinkedIn groups. Likewise, you have a stack of business cards from last month’s trade show. It sure would be nice to get them added to your contact database.
Merging Duplicates – You try your best to keep clean records, but some things slip through the cracks. Making time to deduplicate your contacts, tasks, projects, and other records can make you feel more productive and less strung out.
Closing Old Opportunities – Some clients are just too nice to tell you “no.” This can lead to a CRM full of opportunities that will never materialize. Being realistic and closing low-probability opportunities (despite never getting a firm “no”) can help you reduce clutter and refocus attention to higher probability deals.
6. Analyzing Your Financials (Rather than Just “Doing” Them)
It’s easy to get caught up in the minutia of tax season. Did my accountant remember to include my SEP IRA contributions when calculating adjusted gross income? Is the new laptop that I purchased last year being amortized or expensed fully? Questions like these are important to ask when ensuring accuracy, but frankly they’re not all that useful from a strategic standpoint.
If “doing” your taxes wasn’t such a major undertaking, there might be more time to ask value-focused questions like these:
- What percentage of income originated from consulting versus passive income streams?
- Which of my services are most profitable?
- Which of my clients are most profitable?
- Is my business exposed to unnecessary risk by serving too few / too many clients?
- Could I actually be losing money by refusing to outsource certain tasks?
- Should I be saving more for retirement?
Sadly, for many consultants (myself included), such strategic questions are frequently overshadowed by the nuts and bolts of meeting the mid-April deadline. By the time May rolls around, these questions are long forgotten – until maybe next tax season.
7. Just About Anything Else!
When you finally get around to cracking open that 75-page packet from your CPA, you know you’re in for at least an hour of tedious review. When you take on projects, you do them well. It’s just who you are. Signing off on your taxes is certainly no exception.
As the packet continues to stare you down, it’s easy to get intimidated or find other matters that take precedence:
“It’s been a while since I backed up my computer.”
“My office plants look a little stressed. I should probably give them a quick drink.”
“I’ve been meaning to descale my coffee machine.”
Before you know it, it’s the end of the workday. Your taxes will just need to wait until tomorrow. Let’s hope tomorrow isn’t too late!