How this accountant is growing his practice by targeting niche markets
At a glance
A small business loan and line of credit from Prospa helped Michael to:
- Pay the rent on the company’s new office
- Ensure consistent cash flow to keep the business running
- Bring a staff member on full time to help grow the business
Eleven years ago Michael Gallagher was teaching tax law to post-graduate students when he decided to walk the walk and start an accounting business.
The majority of their clients are tradespeople, so in 2011 Michael launched Tax for Tradies.
“The tradies are a bit neglected,” says Michael, whose practice is based in Melbourne. “They’ve also got a shoebox or glove box mentality when it comes to their accounts. We felt we could solve that by encouraging them to take photos of their receipts and sending them to us electronically.”
Michael also recognised that Tax for Tradies is a catchy name that has the potential to develop into a national franchise brand. To this end he’s also set up Tax for Nurses, Tax for Doctors and most recently Tax for Truckies.
The clever business names help with marketing, with most website traffic coming from organic Google search.
Growing the business by 10% each year
Word of mouth is important to grow any business and working within a niche brings Michael plenty of referrals. “The quality of the work we do and how quickly we lodge tax returns and get refunds immediately out to clients has given us a good reputation,” he says.
The business recently moved premises, from a residential house to a commercial office where Michael’s staff include a CPA and an admin person. The employees service the majority of standard clients, while Michael handles those with more complex issues.
Like many companies, Tax for Tradies has experienced ups and downs over the past couple of years, but it’s managed to continue its turnover increase of 10% each year.
“During the pandemic we initially had quite a sizeable income spurt, then it went down in 2021, then up again,” says Michael. “Fortunately the tradies have been doing really well.”
In the current economic environment Michael is managing to keep prices fairly stable, with a 5-10% increase to cope with rising inflation. He cites the importance of invoicing and placing clients on direct debit to deal with cashflow issues.
“Invoicing is where so many businesses fail,” he says. “They fail to send their invoices so they don’t get paid. I’ve got a manic desire to invoice. We also have around 20% of our clients on direct debit.”
Prospa helps with cashflow
Despite the increase in the business’s turnover, Michael needed help with cashflow to pay rent on the new office and double the wages of an employee to bring the person on full time.
He didn’t want to use a traditional lender for funding. “I felt that at my age, I didn’t want that scrutiny,” he says.
After hearing about Prospa from some of his clients, he was attracted to Prospa’s ease of application and understanding of small businesses.
“Prospa are more concerned with whether you’re operating a business and growing it,” says Michael. “They get a feel for where you’re at via your bank statements and make it easy to get funds.”
“Prospa provided me with cash flow when I needed it to keep my business afloat, with a minimum of fuss.”
Michael started out with a couple of small business loans, then switched to a line of credit facility. “I love the line of credit because it enables me to put money back whenever I want and gives me the security of knowing I can draw down on it when I need to,” he says.
Making clients feel special
As well as targeting particular niches, Michael believes the key to the company’s success is making clients feel special. “When they’re sitting in front of me, I want them to feel like they’re the only client I have,” he says.
He also does something others may consider ‘old-fashioned’ nowadays: Answering the phone. “So many businesses burn clients by not picking up the phone or answering messages,” he says.
Going forward, Michael is working towards building his brands into national franchises. And while a return to teaching isn’t on the cards, he plans to put his skills to good use through webinars and video tutorials for his clients.
“I’ve done a couple of webinars on superannuation and tax planning and that’s an avenue I could develop,” he says. “Our communication with clients seems to be our strength.”
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