Are you interested in opening a tax franchise like Jackson Hewitt, Liberty Tax Service or H & R Block? If so this guide will help you understand the steps involved in opening your own tax services business franchise.

Many individuals look to companies to prepare their taxes due to the intimidation of tax forms, the ever changing tax codes and to ensure their taxes are prepared accurately. This demand has built up a strong tax preparation industry that is comprised of individual accountants, tax lawyers, tax firms and tax preparation chains. Most chains offer franchises for qualified individuals.

Franchises can be a good option if you want to own your own business, but want a support system or model that can be easily emulated, helping increase your chances for success. Additionally, you are buying into a company that has built-in name recognition, a national marketing strategy and usually an advanced business management system. So, owing a tax preparation franchise will allow you to be your own boss without taking as much risk.http://www.entrepreneur.com/magazine/entrepreneursstartupsmagazine/2009/october/203504.html

While having a background in accounting or math may not be a requirement for some franchises, having a strong desire to work in an cyclical business and the ability to work under stress is a given. Tax preparation is concentrated around several month during the year, leading up to the April tax return deadline and around the October 15th extension deadline. You will need to be good with customers and willing to work long hours during tax season, often in exchange for a lighter work schedule during the 'off season'. The rewards of a tax franchise can be high. If this type of opportunity sounds like a good fit for you, read on to discover the steps to franchise ownership.

Numerous franchises are offered in the tax preparation industry. Most focus primarily on income tax preparation, but some offer additional services such as accounting and payroll services. Some franchises offer electronic filling services. The start up costs and name recognition can vary significantly among options. If you opt for a well-established brand, you may be limited as to the territories you can set up a new location. Less established companies may offer more location options, but marketing will be more important in lieu of a strong brand.

To discover the types of tax preparation companies available, check out the list of Tax Service Franchises on the Entrepreneur magazine website. The website offers general information about each franchise such as general start up costs, franchise fees and general requirements. You will also find rankings of each service that can help you evaluate the options available.

Once you have a list of potential franchise options, research each franchise. Look on the company's corporate website for links to franchise information. The amount of information may vary, but you typically can obtain a good overview of the services provided, costs and basic franchise requirements from the company website. You also can request additional information through Contact Us” forms, franchise development phone numbers or by email. Be sure to check out the company's overall financial health by obtaining a Dun & Bradstreet report and reviewing corporate filings if the company is publicly traded.

Most franchise opportunities, regardless of the industry, have set prerequisites for their franchisees. Most tax franchises require a cash liquidity of at least $50,000 and a general business background, but they have a strong preference for individuals that have spent time working in a company that prepares taxes and individuals with an accounting background. You may also be required to have a minimum net worth. Additional qualifications can include passing training requirements, having a clear background check and having a good credit score.

If you pass the initial screening (often an application form), you will usually have a telephone interview. Franchises want to ensure they are finding franchisees that fit their profile, can successfully accomplish the requirements of opening and managing a branch of their business and will represent their brand image professionally. If you pass the telephone interview, you may have an in-person interview, or be required to attend a 'discovery day' at the corporate headquarters.

If you are approved for a tax franchise, you will sign a franchisee agreement and pay the initial franchise fee. These fees vary from $25,000 for a Jackson Hewitt franchise to none for a H&R Block franchise. You can often obtain financing for some or part of the cost of opening your branch. Some companies offer in-house financing for start up costs, equipment and inventory, but require you to pay the franchise fee out of your personal saving or through other financing arrangements.http://www.entrepreneur.com/franchises/handrblock/330827-0.html A popular source of financing are Small Business Association backed loan guarantees for business loans.

After signing your tax franchise agreement, the hard work of establishing your company begins. You will need to attend the required company training and start looking for a location. Your location should be in a place that is easily accessible for your customers, visibility and a reasonable rental rate. Once you have found a location, signed a lease and outfitted it with furniture and equipment, you need to locate quality employees. Many franchises offer training programs that can be done at your facility for your new employees.

While establishing your physical business, you should also create your legal foundation. Consider creating an S-Corporation that helps establish your corporate identity, limits your personal liability and may help lower your own personal taxes. With your business identity in place, you can open a business bank account and even qualify for discounted supplies through business memberships at places such as Sam's Club or Costco.

Once your facility is in place and your employee have been trained, schedule your grand opening celebration. Time your opening to give you time to work out any 'kinks' or problems before the beginning of the tax season, but not so far ahead that you will not be able to have enough customers to break even in a short period of time.

The content on this page is not a substitute for professional financial advice. Please consult a financial expert before taking any action suggested on this page.