What NOT To Do As A Service Bureau | Service Bureau Accelerator Podcast E16

by | Mar 18, 2024

Welcome to another episode of The Service Bureau Accelerator Podcast! In this episode, we explore the common mistakes that service bureaus should avoid at all costs. Join us as we dive into the “what not to do” aspects of running a service bureau, providing valuable insights and practical tips for success. Whether you’re a service bureau owner or operator, this episode is a must-listen if you want to thrive in a competitive market.

Running a service bureau can be a challenging endeavor, but by learning from the experiences of others, you can avoid common pitfalls and set yourself up for success. In this episode, we discuss several key areas where service bureaus often go wrong and provide actionable advice to help you steer clear of these mistakes.

1. Poor Customer Service:
The foundation of any successful service bureau lies in its ability to provide excellent customer service. We discuss the importance of building strong relationships with clients, addressing their needs promptly, and going the extra mile to exceed their expectations. By prioritizing customer satisfaction, you can establish a loyal client base and differentiate yourself from the competition.

2. Ineffective Marketing Strategies:
Marketing plays a crucial role in attracting new clients and growing your service bureau. However, many service bureaus struggle with ineffective marketing strategies. We explore the common mistakes made in marketing, such as not targeting the right audience, neglecting digital marketing channels, and failing to communicate the unique value proposition of your services. Discover how to develop a comprehensive marketing plan that effectively reaches your target market and generates leads.

3. Lack of Specialization:
Trying to be a jack of all trades can often lead to being a master of none. We discuss the importance of finding your niche and specializing in specific services or industries. By focusing on a particular area, you can develop expertise, build a reputation, and attract clients who value your specialized knowledge. We provide tips on identifying your niche and positioning yourself as an industry expert.

4. Failure to Adapt to Technological Changes:
In today’s fast-paced digital landscape, service bureaus must embrace technology to stay competitive. We discuss the importance of adopting new technologies, such as cloud-based solutions, automation tools, and data analytics, to streamline operations and enhance service delivery. Learn how to leverage technology to improve efficiency, accuracy, and client satisfaction.

As a service bureau owner or operator, it’s crucial to learn from the mistakes of others to ensure your own success. In this episode, we’ve explored the “what not to do” aspects of running a service bureau, covering poor customer service, ineffective marketing strategies, lack of specialization, and failure to adapt to technological changes. By avoiding these common pitfalls and implementing the practical tips provided, you can position your service bureau for growth and prosperity.

Don’t miss out on the valuable insights shared in this episode! Tune in to The Service Bureau Accelerator Podcast and gain the knowledge you need to thrive in the competitive service bureau industry.

Remember, success comes from learning and taking action. So, let’s accelerate your service bureau together!

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[00:00:00] Baldeep: Welcome to another episode of the Service Bureau Accelerator Podcast. I’m here with uncle Daddy Ross, Tia, the tax goddess.

[00:00:07] And today we’re gonna talk about Some Things Not To Do As A Service Bureau, thought it would be a bit fun to just highlight a couple of things that we see happen that we’re like, Hey, maybe that’s not the best idea for your business.

[00:00:23] So, before we dive in, again if you’re watching on YouTube, like comments, subscribe for listening somewhere else, do whatever the equivalent of that is on that other platform. And if at any point you’re like, Hey, I wanna check out more about Service Bureau Accelerator, there’s links somewhere around this video or wherever you were listening.

[00:00:42] Go to the website, register for a webinar and learn more about it.

[00:00:45] But let’s just dive in. Tia, why don’t you kick it off today?

[00:00:50] Tia: Yes. The title of the show is actually called How to Lose a Client Fast. It’s the Service Bureau.

[00:00:58] Ross: Well said.

[00:00:59] Tia: [00:01:00] If you’re looking to lose a client really fast, the first thing you should do is actually max out all your fees. And if you’re a service bureau, you know what we’re talking about. You’re backing fees, your additional tech and trans fees, your service bureau fees, your doc prep fees. Just make it sky-high to the sky. Don’t give them any kickbacks. Am I missing something?

[00:01:23] When,

[00:01:24] Ross: No, that’s yeah, don’t max out

[00:01:25] Tia: Yeah, Don’t max out fees, or if you wanna lose the max out the fees.

[00:01:30] Ross: Now, when is it appropriate to max out fees to you?

[00:01:33] Tia: When it’s someone that’s brand new and they don’t have any value or history and you’re gonna put a little bit more time into teaching them, if that’s under the umbrella of your service bureau.

[00:01:44] Ross: Yeah. A 100%. Right. People knew it’s like, or if they were prepared, right? That they’re an independent, that you got set up and they’re filing under you. It’s like, yeah max, that shit out. Max that office out because it’s gonna take a lot of your time, a lot of headaches and everything,

[00:01:55] Tia: And you only live once.

[00:01:56] Ross: Yeah, but do not keep them there, right? Do not try to keep [00:02:00] people in their current position if they verbally say they want to improve, right? Like, if someone’s to prepare under you and they say, oh, I want to get my own office. I wanna become an ERO, and you try to keep them there, then it’s like,

[00:02:11] Baldeep: They’re gonna leave you quick. The,

[00:02:13] Ross: Leave you.

[00:02:13] They’re gonna go find someone who’s gonna help solve

[00:02:15] Baldeep: Over the years, like we’ve got prior to the service bureau accelerator, just when, you know, I was selling software, just individual I’d speak to a shit ton of people who, wherever they came from, they didn’t show ’em how to get an even, so they figured it out themselves and now they’re just looking for software, that’s all they wanted.

[00:02:33] And I think a lot of service bureaus do themselves a disservice by not showing them how to progress in the industry. You’re gonna lose the client pretty fast. A lot of times, like some of the hesitancy I see, and just like this year, I can think of a couple of people that are like, yeah, I don’t really want to do these preparer splits anymore, it just kind of, you know, it’s a liability thing, right?

[00:02:55] And I’m like, yeah, well, we tell you to, like, we don’t recommend you do it forever if you’re like, we don’t [00:03:00] recommend you do it at all, typically, right? But if you’re going to, and it’s up to you, you don’t want that liability. But then the comment that comes back is, oh, but you know, I’m not gonna make as much.

[00:03:09] I just think that’s the wrong thinking. Right? You’re not gonna make anything if they leave. But if you don’t show them how to evolve, they are gonna leave and you’re not gonna make any of that money. But it’s just a.

[00:03:22] Ross: Would you rather continue to make revenue off their volume, but maybe a little bit less or none at all?

[00:03:27] Baldeep: And I think that’s where a lot of people just struggle ’cause they’re like, oh, you know, I usually make $150 off each of their returns or whatever. Now it’s only gonna be 40. Right? So what?

[00:03:39] Ross: As the saying goes, greedy pigs get swallowed.

[00:03:41] Tia: Yeah. And don’t just say it. Okay. Hey, well hope you progress, actually write it down. So, first year, second year, third year. You know, in some type of tear, maybe it’s Sixty-forty, or maybe the fee gets reduced over an incremental period of time with that agreement because they feel like it’s something that’s [00:04:00] really locked in.

[00:04:00] And I remember when I, oh my God, definitely don’t wanna do that prepared development again. But when I did do it, one of the things that I explained was, where’s the money going that you’re paying for these high fees? It’s going for training, staffing, payroll calls, like, you know, the back end work.

[00:04:16] And they’re like oh, okay. You know, I didn’t know that’s what you used the money for. Yeah. And then as you progress, you need this less, which means we, we take less.

[00:04:26] So, you don’t have to go, you know, OCD, but definitely have it written down and not just like a blanket promise.

[00:04:32] Baldeep: I thought you used that money for vacations to you.

[00:04:34] Tia: Luckily none of my follow this

[00:04:36] Ross: That’s just a little off the top. A fraction of the action. Yeah,

[00:04:40] Baldeep: Uh, all right. What else we got? What’s another, the max out fees I think is definitely like the way we get a lot of business. We got so much business from people just coming over, getting ripped off.

[00:04:52] Ross: Can’t

[00:04:53] Tia: Max out with no transparency.

[00:04:55] Baldeep: Yeah. Like we’ve had a lot of conversation

[00:04:56] Ross: Yeah. Again,

[00:04:57] Baldeep: That don’t even know what [00:05:00] the fees mean. We’ll end up doing a whole other podcast topic on just how to read fees, but yeah, there’s a lot of service bureau that don’t even know how their fees are or what they should be, or it’s pretty interesting.

[00:05:11] But anyway we can stick to talking forever about fees. Let’s move on to another topic.

[00:05:16] Tia: Okay. Getting caught up in your Tax Academy program, quickest way to lose a client, yes or no?

[00:05:28] Baldeep: Well.

[00:05:29] Tia: What do you mean by getting caught up? What is that?

[00:05:32] Ross: Getting caught up in academy programs as far as like, just only focusing on that. They have their use case, but again, like, we talked about in many episodes, right? Your objective as a service bureau is to grow by increasing bank product volume.

[00:05:44] Someone who’s never done a tax return in their life and doesn’t have any volume. That’s technically, like, that’s not even really your customer, right? Just ’cause they wanna get into the industry doesn’t mean that they have volume and that they do bank products. Right?

[00:05:57] So, it’s a thing that a lot of people are attracted to because [00:06:00] they want to be that mentorship and I get it, right?

[00:06:01] It’s coming from a place of, oh, I want to help people and show them how they can start their own tax business because I’ve seen success in the industry. And it’s a lot of work to hopefully drag someone across the finish line and hope they actually produce volume.

[00:06:14] Where I think it’s a lot easier if you just go direct to ERO’s who are already have software, they already know how to do taxes, they already do bank products. And just figure out how you can get them using your software instead of what they’re currently using. I think that’s something that like, I’m not necessarily gonna say like steadfast don’t do an academy, but I think there’s other models of the service bureau that are going to help you grow and scale a lot faster.

[00:06:38] And this is not just theoretical, this is now that we’ve been in our, you know, with our program, we’ve had people in the Service Bureau Accelerator for over three years now. And we’ve seen the numbers of people who have just gone after academy specifically, and they don’t match up to the people who just are selling software and just focusing on that.

[00:06:56] So, it’s something that you want to probably get away from sooner than [00:07:00] later. This is what I tell a lot of people on the calls, I’m like, let the big franchises, let them train up the next generation of tax preparers. And when those preparers don’t want to be hourly anymore, they wanna start their own business, then bring them in and get them set up on your software and show them how to, you know, get them to bring all their customers over to you as well at the same time.

[00:07:16] Tia: I mean, if you do, if you’re just like so sold on the tax academy, I think the middle point is to vet who you’re marketing it to. So maybe like, tax adjacent. So, like people who are in credit repair you know, maybe bookkeepers who are looking

[00:07:31] Ross: Who already have a business.

[00:07:32] Tia: Already have a business, You know, realtors who work as seasonal, but they’re all really good at sales and they have a pipeline of clients, like it they don’t know about it, but they know certain fundamentals that will make your job easier.

[00:07:45] Baldeep: It’s hard to take somebody that’s got no business experience at all. And you’re now trying to do two things. Trying to show them how to start a business and also do something that’s probably one of the most intimidating things they’d want to do is do someone else’s taxes [00:08:00] ’cause they’re scared.

[00:08:01] Ross: Yeah. Start a business and acquire customers and the service bureau

[00:08:04] Baldeep: and do the service.

[00:08:05] Tia: And I do it all in six weeks.

[00:08:08] Ross: And go, oh, a lot of people seem to struggle. Yeah. Not, yeah, not surprise. I think the other thing too is like doing too many things at once, and we get it like this is, we had our event, our first event was last year actually in June 23, it was awesome.

[00:08:24] We’ve talked about this, a lot of people, being spread too thin and doing too many different things, right? Everyone loves to say, oh, I’m a serial entrepreneur. It’s like, okay, great. How many businesses have you actually scaled beyond seven figures and exit? None. Okay. So, what are you, a serial entrepreneur of businesses that don’t make money?

[00:08:41] Why are you doing that when you should just focus on one thing and scale the business?

[00:08:45] Tia: It’s the shade for me.

[00:08:47] Ross: A large No. Anyone who’s actually like grown and scaled a successful business and an X did or maybe they still have it, whatever, anyone who’s actually grown and scaled a large successful business that has been their only [00:09:00] focus.

[00:09:00] There’s a misnomer about like multiple streams of income, all the millionaires? No. They built their wealth initially from one business and that allowed them to generate multiple streams of income. They didn’t become millionaire for multiple streams of income, that’s the biggest misnomer. And so, it is inherent with our tax industry that, you know, tax is seasonal and so you gotta be doing something else in the off season, right?

[00:09:20] You’re doing accounting, you’re doing bookkeeping, you’re doing insurance, you’re doing real estate, whatever it is. But what we find a lot of people struggle to grow a service bureau is because they’re still doing all that other bullshit. And it’s like, well, just do one or the other and I shouldn’t say bullshit ’cause it’s like, look, if you prefer real estate, just do real estate.

[00:09:37] Don’t be a service bureau, don’t have your tax business. Just focus on real estate, put a hundred percent of your effort into that. But if you wanna be a service bureau, then put a hundred percent of your effort into that. Now I understand a lot of people, their tax business is still their bread and butter. I get it right.

[00:09:51] You kind of wanna keep it around, but the sooner you can exit that, you exit your office, the sooner you’re gonna be able to really focus and completely [00:10:00] double down on your service bureau and scale it to much higher levels. So, I think that’s another thing that people are doing too many things at once.

[00:10:05] They got their, you know, T-shirt company, they’ve got their insurance, they got their trucking company, they got their tax business, and now they got their service bureau as well. It’s like, okay, well guess what? You versus someone who is only focused on the service bureau who’s gonna win, right?

[00:10:20] They’re focusing a hundred percent of their energy and their service bureau business, and you’re focusing 10. They’re literally 10 xing you every single day, right? Oh, I can’t get any customers. Well, yeah, ’cause you only have one sales conversation a week where this person’s talking to two people every day. Right?

[00:10:35] So, that’s some other really important things that I think that you should not do as a service bureau was try to keep doing a hundred different businesses.

[00:10:41] Baldeep: Jack of all trades,

[00:10:42] Ross: Just focus on the one.

[00:10:42] Baldeep: Master of none.

[00:10:44] Ross: Exactly. Amen. Now, next one, Baldeep. This one’s, I’m teeing this up for you is, Things That You Should Not Do As A Service Bureau.

[00:10:53] Let’s talk about selling every single kind of software imaginable.

[00:10:58] Baldeep: I think that’s probably [00:11:00] the biggest mistake people make ’cause they think that and we spoke about it in other epi in other episodes, it’s they’re trying to sell the client what they say they want, or they’re trying to adjust their, oh, this person wants drink. Oh, this person wants tax-wise. Oh, this person wants this, or this person wants this. Who the fuck cares? Right?

[00:11:18] The whole objective, if you have all those, you’re not gonna make money. And there’s a couple reasons, why? Because you’re not gonna grow to a volume with one particular software to get any type of incentive that benefits you. Right?

[00:11:31] Ross: Can you break that down a little bit? Because I like, I’m very familiar with this, but I think maybe for the audience, like, what do you mean by that? Like, maybe give them a little bit behind the scenes on what happens when you actually grow a fucking service bureau and you actually grow your volume with a specific software.

[00:11:44] Baldeep: So, typically how it works is say you have one software. As you grow volume, you’ll try and negotiate incentives on your bank product volume, and that’ll go with like, when people are with us, we give them the incentive already. Like, here’s your [00:12:00] benchmarks because we have the two that we primarily push, you can blend it together.

[00:12:04] That’s not really how it works because in the standard sense of things, but so, say and this is what happened to me, right? So, years ago when I had only Crosslink, I negotiated an incentive and then I also negotiated an incentive with the bank. And it was two separate conversations, but then the problems happened when somebody wants to use a different bank, and now all of a sudden I had not, I didn’t have enough volume with that bank to make any money there.

[00:12:27] So, it was kind of losing money in a sense, right? Like I wasn’t making as much as I would if they use this. This is what happens when people go to all these different softwares is, Carlson doesn’t care how much products you did on tax-wise, if you do 200 products there and two oh first, we’re probably not getting much at 200 products anyway.

[00:12:45] But if you do 200 products in one and 200 products in another, they don’t care about what the other software volume is.

[00:12:52] Ross: You’re not getting any extra money.

[00:12:53] Baldeep: You’re not getting anything extra. Right? So, it’s counterproductive, I think the biggest thing also that I see people, the [00:13:00] mistake when they do this, and this is a reason why we don’t add it.

[00:13:03] Like we get offers from every software, Hey, why don’t you sell ours? Why don’t you sell? No, it’s not that we can’t, it’s that the amount of extra support that is required, especially if you’re serious about the business. Is insane, like, we’re just figuring out how to properly support OLT, which we added last year.

[00:13:25] And we’re still creating new docs and training people and all this stuff on it, like, we are a hundred percent better than last year on supporting it, but

[00:13:33] Ross: We’re even still retraining like our tax layer ’cause it’s like, we see more how our people go through and see more training that’s required to help better support.

[00:13:41] Baldeep: Yeah, so now, like, we see the questions that come in when something’s new. So, now you go at another software, and you’re like, now you’re trying to struggle to set somebody up or everyone’s set up differently in every software. It’s just a nightmare and you can’t scale a support team with all these different products, it is very difficult.

[00:13:58] So, the [00:14:00] challenge you’re gonna face is, yeah, you may have, you know, two people in this software, three people in this software, five people on this other one, six people on another one. But there’s no way you can train one person to learn all these things and be efficient or proficient at supporting your ERO’s, and you’re just gonna end up losing them anyway, right?

[00:14:19] Get really good at one at the most two, then that’s all you need.

[00:14:25] Ross: Yeah. Put everyone on your main one and then if there’s any, for whatever reason they can’t use it or whatever, then you have a backup one. You have another one that you could put them on. Right? Or slightly different use case, right? Like, that’s a nice combination that we have where we’ve got a nice use case where if someone tells us certain things on the sales call, we’re like, okay, cool, we’re gonna put you on this other one ’cause it’s probably gonna be more in line with how you typically use your software to get, so it’s more natural, more comfortable for you, which allows you to be able to go out and sell it with more confidence and sell it better as well.

[00:14:52] Baldeep: Yeah. I just think it’s, you see all the people posting about every single option, those are the ones to run away from ’cause there’s no way they can support [00:15:00] you.

[00:15:01] Ross: Yeah. And people ask us that about that too in our program too. Like, oh, well what about this? We’re

[00:15:05] Baldeep: Oh

[00:15:05] Ross: No. With our program, you get this. If you want other things, this program’s not for you.

[00:15:09] Baldeep: Yeah, you don’t have to sell everybody, the objection isn’t like, and then the biggest thing people think, oh yeah, I’ll just go get that one. A lot of times you won’t even be able to move the ETHAN or that customer. There’s gonna be so many other problems because you’re not understanding the nuance of, well, Drake’s not gonna give up their direct customer to move them over to your service bureau.

[00:15:26] Like, they’re not gonna do that, so what are you gonna end up doing? You can’t even sell ’em that software anyway. Like, people just don’t think farther ahead at the other nuanced steps involved in that process.

[00:15:37] Ross: Yeah, I think that’s a good one. Any questions or anything to add on to that one? On in multiple softwares?

[00:15:41] Tia: No, I’m good.

[00:15:43] Ross: Yeah. So, actually let me ask you, ’cause you have, do you have all three now? But I mean, one you phased out, but your, how about your, yes technicalities, but your experience having multiple softwares that you’ve had to like, learn and transition.

[00:15:57] How much did that kind of, do you feel like that maybe kind of [00:16:00] slowed you down a little bit? And how much faster do you feel like you’re moving now just kind of focusing on like the main one or two?

[00:16:06] Tia: I would say if you’re going to have multiple softwares, it has to really be to a vantage point. Like you have to always be gaining something and it can’t be that one client.

[00:16:19] Hence, why I had child, three softwares, and now I’m only,

[00:16:25] Ross: We’ll say trial. Yeah, sorry.

[00:16:27] Tia: And now I’m only using one. It even down to your point, both the banks, it’s only one bank. It’s only one software and it’s only one bank. It’s too much to try and figure out and manage the support numbers are different, it’s a lot.

[00:16:43] And right now I’m still one person, so, I can definitely attest to that.

[00:16:47] Baldeep: Well, even to add to that, ’cause my focus on the bank was more on the incentive side. But yeah, there’s different requirements for different banks that people are gonna ask you a question. If you don’t know how one bank handles a certain scenario, you’re just gonna be stuck with no [00:17:00] answers. Right? And asking for help on everything. I don’t even bring that up.

[00:17:04] But you did say something that I think is a reason why a lot of people do it, is they get it for one client. We had somebody add a software for one client. I’m like, you shouldn’t do this, like, sure, you wanna buy it from us. I get it, I don’t mind taking your money, but I’m telling you like you shouldn’t actually do it. Like, I’d rather not take your money for this one client ’cause you’re gonna regret it. And later on they’re like, you were right, I shouldn’t have wasted my time with that one client for that.

[00:17:30] Doesn’t matter of time spent in learning and setting that person up, and then at the end of the day, it wasn’t even worth it.

[00:17:36] Tia: Yeah, and it’s very tempting, again, having that offer, but that kind of goes back to our previous podcast, which is like the one offer situation. Also for me now as a service girl, it’s just all about the money. So, I’m gonna sell whatever software has the highest incentives. I get the most benefit, has the cheapest transaction fees.

[00:17:57] I don’t care about the interface, I don’t care [00:18:00] if it has e-sign. Yeah, that’s what the fuck job form is for.

[00:18:04] Baldeep: Yeah, when we started this, we basically pushed one software and coming from the other software, I’m not gonna mention names ’cause I hear sometimes these people watch our podcasts and get mad that we talk shit about ’em.

[00:18:15] Ross: Love you all.

[00:18:16] Baldeep: Anyway, so they may even see this one. The one that we primarily sell and we have the most people on, we actually make less money than another one. And like, it’s doesn’t affect you guys, it’s just like at the volume and all the stuff that we do, it’s like, we actually make, well, it’s more expensive on the transmitter fees, so there’s more money there, right? It’s simple math.

[00:18:36] But we still sell way more of this one because it’s just easier for us to set up and it’s easier for us to do a lot of stuff. It’s less support work to set this one up faster. So, it’s not for us, it’s not about the money when it comes, I get for you Tia, but I think a lot people need to also consider the complication of the setup and learning that and supporting [00:19:00] that.

[00:19:00] Tia: I mean, if you’re selling sub-service bureaus too, I think that your part kind of comes into play makes sense. But like, just being a service where I want the most money and the cheapest amount of work. I mean not the cheapest with the least amount of work possible. Yeah.

[00:19:15] Ross: Yeah.

[00:19:15] Baldeep: Yeah. So that would be a

[00:19:16] Ross: Yeah. And

[00:19:16] Baldeep: Would be a combination of those things, right? Like, would you trade that just for $2 of product

[00:19:19] Ross: And that’s what it boils down to.

[00:19:21] Baldeep: for a much smoother setup process that you can outsource quicker? Right?

[00:19:26] Like possibly, right? I think that’s like a no-brainer.

[00:19:29] Tia: Well, you know, I was so sold on the other stuff I was trialing and I would not let it go. But once I actually broke down all the fees, I’m like, oh hell no. That $13 could be my $13

[00:19:44] Ross: Yeah. I mean when 13, that’s your vacation tax, exactly. Yeah. But that’s the thing though, right? With like, and that’s coming back to like, do not what you should not do as a service bureau is trying to sell all the softwares because like, again the volume incentives, right?

[00:19:56] Being able to grow and get and negotiate better deals, but also the fulfillment and [00:20:00] support, right? Like that is just a massive thing that people really don’t understand. And it’s typically because they really don’t understand what it means and what your roles are. When you are a service bureau, when you are responsible for is like setting up the ERO’s, issuing the license, managing, like, adding, prepares and rolling them in the banks.

[00:20:16] You have to learn that five different ways for the five different softwares and then you are the one stuck doing that because you can’t train someone to learn all that ’cause it’s way too complicated, it just does not work at scale. Whereas, like in a perfect world, if we could just sell one, we probably would just sell one.

[00:20:30] And it’s like, no, this is the software, this is it. Because it just allows it to be every single process is laid out, mapped out, it’s quick, it’s efficient, it’s easy, and we can scale the hell out of that.

[00:20:39] Baldeep: Question comes.

[00:20:39] Ross: Two is.

[00:20:40] Baldeep: Oh, cool. Everyone knows the answer, how does it work with this software and this thing and this? Like, it’s just too much.

[00:20:45] Ross: Yeah. But you, Tia, you’d mentioned something about sub-service bureaus and that’s actually our next point that we wanted to get talk about today was things you should not do as a service bureau. Selling service bureaus without really [00:21:00] knowing what you’re doing as a service bureau to begin with.

[00:21:02] Like, I think a lot of people, I’m kind of curious ’cause this just may be isolated in our group because our group is all about service bureaus and there’s a bit of an echo chamber where we assume that everyone wants to be a service bureau and everyone wants a service bureau.

[00:21:14] And so people are trying to sell service bureaus. But we see all way too often people who are in their very first year who’ve never even enrolled someone in the office like, oh, I wanna offer them a service bureau. It’s like, do you have any idea what that entails? Do you have any idea what that means?

[00:21:29] Because as a service bureau, you have to support all of your customers, which means, if you sell someone a service bureau, you also have to support that service bureau. You have to teach them how to set up an office, you have to teach them how to enroll someone with the banks, you have to teach them how to troubleshoot stuff, you have to teach them how to support their software customers.

[00:21:49] Now, there’s so much more that’s stacked on as your responsibilities, and when you don’t even know how to be a service bureau in the first place, now they come to you with questions that they assume you know, and you [00:22:00] don’t. Guess what? They’re probably not gonna have the greatest experience. And guess what’s gonna happen?

[00:22:04] Baldeep: They’re gonna leave.

[00:22:04] Ross: They might start looking elsewhere.

[00:22:05] Baldeep: They’re gonna leave. No, they are like it’s unfortunate. I think people jump into that a bit prematurely. We tell ’em, like, we try and talk people out of it. At the end of the day, look it’s your business, you wanna do it.

[00:22:15] It’s just the reason we try and tell people out of it is ’cause we know we’re gonna end up being responsible for supporting them, helping them support their people. Right?

[00:22:23] Ross: They’re trying to figure out support their customers.

[00:22:24] Baldeep: Ultimate,

[00:22:25] Ross: They have to come us to get those.

[00:22:26] Baldeep: Yeah, ultimately like I think and just what we’ve seen in like the questions, look, we’re all four people doing it. Like, we’re actually doing a lot more internally this year to help support you guys supporting that scenario.

[00:22:39] But I think before people dive down that road, they should fundamentally know the ins and outs of all the setup and the nuance of their software before they go that route ’cause you know, we get tickets in.

[00:22:52] And just think about it from your client’s perspective, right? Say, Tia, you go and sell a sub-service bureau. And you’re not too familiar with a lot of [00:23:00] the backend stuff or you’re, you don’t really, maybe you’ve only set up one client before and you did one season, right? Let’s just use that example.

[00:23:07] Now this person comes to you and is like, Hey, Tia, I just got this reject for this bank app. Or, Hey, what is this other thing? Why can’t I start a return? What’s happening here? And instead of you being able to quickly diagnose and give them the answer. You have to say, okay, let me find out for you.

[00:23:24] And now they’re waiting for you to figure out how to properly pose the question and then for us to try and understand what you’re saying because you didn’t get the information properly or didn’t get us anything to look at or whatever.

[00:23:39] I think the most common one we see is like, Hey this such scenario and it’s like, right, well what’s the EEF and what’s the locate? Like, you gotta give us something to look at, like, we don’t know.

[00:23:47] That experience for your customer ends up being, well, every time I ask Tia a question, she doesn’t know the answer, she’s always asking someone else. So, why don’t I just find the person that they’re asking, right?

[00:23:57] And we don’t want that. Right? Like, that’s [00:24:00] not what we wouldn’t want people to find, digging us up for that scenario. But I think, they’ll either find us or find someone else that just knows more. Right?

[00:24:09] Tia: And what I also here people are, you know, members talk about, and I think there’s a big confusion here is, they say that they want to sell a sub-service bureau, but then they also talk about branding. And I think it’s like, those are co-branding and a sub-service bureau are two different things. Like, the person wanting to have their logo on the software versus the person wanting to set up with the capabilities.

[00:24:33] Yeah, to sell software when I hear that question, that’s the number one indicator that you should not be selling this because you don’t know what the differences are.

[00:24:42] Baldeep: Yep, for sure.

[00:24:43] Ross: There’s a lot of that and that’s again, like this is something that we always look at, right? Is like, how do we improve our program? What do we need to provide more training on? And there’s a lot of stuff like that alluded to that we’re ramping up this year gonna be adding more stuff and more training just to help educate people more and more.

[00:24:58] At the beginning, it was not a big [00:25:00] concern on our training ’cause we just basically told everyone like, don’t even worry about that, figure out your own service bureau sell. But now that we’ve been around that, we’ve had members that have been in since the beginning. They’ve got some of the fundamentals down, and then now they’re moving into the next steps.

[00:25:11] We’re like, all right, now I’ve got people who are asking about service bureaus, I wanna be able to offer that and support them. So, now we need to bring that back internally and create more support and training to help those people get that stuff set up and structured well.

[00:25:24] So, couple of things since we are talking about support, right? It’s like, you are, you know, even as a service bureau. Now, it doesn’t matter if you’re selling sub-service bureaus, but just as a service bureau, the first word is service. Right?

[00:25:35] And if people have problems, right? If people are getting a weird error in the software or they’re trying to set someone up but they can’t set up their prepare ’cause they email is already in the system, whatever it may be. They need to go to you for support, right?

[00:25:51] You are their service bureau that is a part of your roles and responsibilities. One thing you should not do as a service bureau is not have a way for [00:26:00] people to reach out to you and communicate to you, whether it’s email, inbox, whether it’s a phone system, whatever it is, you need to have something in place.

[00:26:09] This is another horror story that we’ve seen, we’ve heard from so many people coming from other service bureaus where they’re like, every time I need help, I have to send ’em an email, and it takes them a week for them to respond. Or, you know, I go into some like discord channel and I have to sit there and wait for someone to show up, right? Just completely unreliable methods of communications to be able to support customers.

[00:26:29] So, if you are a service bureau, do not skimp out on support. Right? Make sure that there’s a way, and it doesn’t mean that they can light your phone up anytime they have a question, I’m not saying that. Make sure you’ve got some sort of system in place where there’s just an inbox that they can always reach out to you, because then you can start having a VA kind of start responding to some of those questions. Start getting them trained up so they can help you on support, whatever it is. Just make sure that there’s a way for clients to communicate with you.

[00:26:56] That’s probably one of the biggest, probably the most common things that we’ve seen for people [00:27:00] leaving their service bureaus and starting their own with us is because they’re like, oh, I can just never get a hold of my personal

[00:27:04] Baldeep: Or even, we’ve seen a lot of people move around service bureaus this year, like insane amounts, like within our group and externally, like we’ll find, oh, this even is missing. Oh, they went to another service bureau. Right?

[00:27:15] So, we see that a lot.

[00:27:16] Ross: Remember that email we had the other day? So, we have a customer, so a member of our program who has a service bureau set someone up under her who has their own service bureau, and that person’s customer has been trying to talk to that service bureau. So, we’re like three layers deep. Can’t get a hold of them, somehow found our information and emailed us saying, Hey, I’m under so and so, I need help, I need to get like my software license, my office set up. The person hasn’t responded and so, it’s like, what do we

[00:27:46] Baldeep: The problem where that happens is, they’ve tried so many times, they end up calling Tech support 50 times, and they just finally say, all right, well, the only solution we have is to get you in touch with these people, right? Because obviously, there’s no [00:28:00] response on the appropriate ,channels. So we got some of those escalations and.

[00:28:04] Ross: And we’re not necessarily here to support them, but I mean, what we did is we just went back to our direct customer, ’cause that’s really who we support, not their customers. And we said, Hey, your customer’s customer is having an issue, you should reach out to them to help them out.

[00:28:16] And she did, and guess what? She’s gonna pull that person over next year because that other service bureau is just not offering the support. Right? Not helping the person, you’re gonna lose business.

[00:28:24] So, always make sure you can have open communications. It doesn’t have to be within an hour. Right? But if they shoot you an email at 10 in the morning, you should be able to respond by 2.

[00:28:35] Like, you know, there’s no reason why you can’t respond to ’em in a reasonable time during the day, especially during the tax season. Which leads to wait, is that

[00:28:43] Baldeep: Huh.

[00:28:44] Ross: Yes. Which leads to another topic of, I guess that’s sub-service bureaus. Maybe we’ll leave that for now, but yeah, I mean, it’s gonna lead to not being able to retain clients. Right?

[00:28:53] They want to have communications with you. Again it doesn’t have to be over the top, they don’t have to have your cell phone number, they shouldn’t be able to let you up on text [00:29:00] message all the time.

[00:29:01] But if they’ve got a support inbox or a ticket system, whatever, there’s a lot of tools you can set up to really have some streamlined support to make sure that your customers always have an area to go out and reach out to you and get the help when they need it.

[00:29:12] So, make sure you got something like that in place.

[00:29:14] Baldeep: Yeah, especially for service bureaus that are ERO’s also, that becomes more important because I think one of the causes to the lack of support is if you’re a service bureau and also an ERO. If you don’t have a system or a process in place to support your ERO’s during the season because you’re too busy, they’re probably not gonna stay, right? You’re gonna struggle there.

[00:29:38] So obviously, you know, we tell everybody if your goal is to leave your tax office and do the service, let’s work towards getting due to that goal. I think a lot of people end up wanting to become service bureas eventually stop doing taxes. But you need to think you’re not gonna be able to retain customers if you’re not supporting them during the season when they have a question for you, right?

[00:29:55] Yeah. You could send ’em to software tech support. Software tech support’s not gonna help ’em with certain things, right? They’re [00:30:00] software tech support, they’re not gonna answer questions about the bank apps or this, or that, you have to actually initiate or solve for them.

[00:30:08] So, I think that ends up becoming evident when stuff gets escalated over to us. So, this person doesn’t answer during season ’cause they’re too busy with their own tax office. Right?

[00:30:17] That’s not the experience you want your customer to have.

[00:30:22] Ross: Yeah. For

[00:30:22] Tia: Absolutely.

[00:30:23] Baldeep: Oh, another thing I that service bureaus should not do is you should not wait until December 25th or January.

[00:30:32] Ross: Start setting up offices.

[00:30:33] Baldeep: No, not even that, to enroll your service bureau with the banks, because if you can’t enroll your ERO’s in October, when they want to go get their loans from the bank, they’re gonna go find somewhere else to enroll, and you’re gonna lose them there.

[00:30:46] Like, we saw some people like, oh, I lost this. Well, you didn’t do your service bureau enrollment, you didn’t show up until a week before tax season. You think all your other customers are gonna wait for you to like that.

[00:30:58] I think that’s a common thing [00:31:00] ’cause the service bureau isn’t a tax office, people are used to that, oh, I’ll only wait till the week before, let me procrastinate until the season to get ready.

[00:31:08] But now you have other customers, so you can’t wait till you are ready. You know they’re gonna move at their own pace, so if you’re not ready, they’re gonna find somewhere else.

[00:31:16] Ross: Yeah. The Service Bureau is pretty much year round business.

[00:31:18] Tia: It’s year-round. Yeah. I was just thinking the same thing and it’s different things. I mean, maybe we can talk about another episode, like during each phase, like what you should be doing.

[00:31:26] Ross: Service Bureau season.

[00:31:27] Tia: Yeah. Service Bureau season. Absolutely.

[00:31:30] Ross: There you go. I’m gonna make a note on that. Service Bureau seasons. Awesome.

[00:31:35] Well, I think that was a good little conversation there, but a lot of stuff, I mean, there’s a lot of things we see. I think that those are probably some of the most common things, right?

[00:31:41] Maxing out fees, because again people are gonna, especially once they start getting savvy to it and start realizing like where all this money is going, they’re gonna go elsewhere. Keeping people in their, in trying to keep people in the same place, right? Being greedy where it’s like, oh, well I’m gonna lose money.

[00:31:53] I’m not gonna make as much if they do X, Y, and Z. It’s like, you’re also just gonna lose them as a customer. So, [00:32:00] help people grow, yeah, you’re gonna make less money off them per product.

[00:32:03] But at the end of the day, again, this business model is about product volume, not dollars per product, right? That’s how you’re gonna lose people by trying to maximize your dollars per product.

[00:32:12] It’s about getting as many products as possible and the dollars will sort themselves out. Spending too much time getting caught up in like an academy or going after the wrong type of customers who aren’t really ideal clients for your service bureau to grow your product.

[00:32:24] Trying to sell all these kinds of different softwares, trying to do multiple different business models at the same time. Focus on one thing, right? Focus on one, maybe two softwares, just focus on your service bureau.

[00:32:35] Give people good deals, get them set up so you don’t have retention issues where people stay with you because they’ve got a great deal and provide support.

[00:32:43] Just be available for support. If you can check all those boxes in your service for your business, then you shouldn’t have any problems scaling and really growing.

[00:32:52] Baldeep: All right. Is that it? I think that covers a lot.

[00:32:54] Tia: That wraps it up. Yeah.

[00:32:56] Ross: There we go. Wrap it up.

[00:32:58] So again, if you guys enjoyed the podcast, enjoyed the [00:33:00] episode, again, comment, like.

[00:33:01] I haven’t gone into our YouTube too much, but we’d definitely love to see some more comments. If you guys have any thoughts or feedbacks or even questions for us.

[00:33:08] You know, like, comment, subscribe to the channel Spotify as well, follow us there. And if you wanna learn more about the Service Bureau Accelerator, there’s always links in all the descriptions.

[00:33:17] Click on one of those links. Check out one of our webinars. Watch some of our YouTube videos. We’ve got tons of testimonials there as well. Take a look and yeah, jump on a webinar.

[00:33:24] Book a call with us. Happy to answer any other question you guys may have.

[00:33:27] So again, thanks for listening everyone for this episode, and look forward to seeing you on our next Service Bureau Accelerator podcast.

[00:33:33] Baldeep: Alright, take care.