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Marketing by the Books

Accountant Needs to Learn How to Identify Potential Clients and Sell His Services


Richard Tarango is a former Internal Revenue Service tax auditor with degrees in accounting and social services. Two years ago, he quit his job to become a full-time caretaker for an elderly relative and concentrate on developing a small business as a bookkeeper and tax preparer.

But his home-based business has not progressed to the level he had expected. In fact, he has managed to earn only a tiny, seasonal income at it and found that he must rely on his elderly aunt to provide his modest living expenses.

Tarango, 40, applied for a Business Make-Over as a last-ditch attempt to make a go of his business.

"I wanted to get some ideas on how to improve my marketing skills and increase my clientele," he said. "I had tried other options, but nothing else worked."

Tarango believes his major problem lies in marketing his services. He is good with numbers and enjoys working with them, has mastered the two most popular bookkeeping software programs on the market and, because he speaks Spanish, believes he could provide a valuable resource to the many Latino-owned small businesses in his Montebello neighborhood and in nearby East Los Angeles.

If he could attract about 10 small-business clients who would hire him to handle their monthly financial statements, accounts payable and receivable, and payroll, Tarango said, he would have an adequate year-round income. To round out his business, he said, he would like to attract 20 to 30 additional tax clients.

But it is finding clients and convincing them that they should hire him that has Tarango stymied.

"I have always lacked marketing skills," he said. "I worked with a marketing consultant for a while, but the results were extremely poor."

A lack of natural ability to market oneself is a great impediment to making a small business successful, said Derrell Ness, the entrepreneur-in-residence for the award-winning Small Business Institute at Cal State Fullerton, where Tarango's business was analyzed.

"When you are in business for yourself, you are selling every minute of every day, whether it's during a formal sales call or not. You are always in a position to sell the credibility of yourself and your company," said Ness, whose Los Alamitos-based company, NSA Distribution, distributes point-of-sale hardware and software for retailers.

"When you work for somebody else--say you're an accountant for Price Waterhouse--you are loaded with credibility before you ever walk in a client's door or open your mouth. When you have your own company, you have to carry all that on your own shoulders."

Ness and the director of the Small Business Institute, professor Michael Ames, joined forces with 20 students in the Small Business Management class to meet with Tarango and prepare suggestions for how he could make his business viable.

The group first tackled the marketing issue. They recommended that to improve his personal marketing skills, Tarango take advantage of some of the low-cost marketing courses offered by community colleges, business-networking groups and the Small Business Administration's small-business development centers.

Tarango gets new clients mostly from word-of-mouth referrals--a great way to bring in new customers, Ames said. Each spring, Tarango sends reminder cards to his current tax clients that offer them a 10% discount on their tax-preparation fees if they bring in a new client.

But personal referrals typically do not generate enough business to make a fledgling company stable. Tarango has placed advertisements in the yellow pages and La Opinion newspaper, but they didn't generate enough response to justify the expense, he said.

He's also sent direct-mail fliers to his neighbors, new homeowners and new businesses in ZIP Codes that are along convenient bus routes, since he doesn't drive.

But while the idea of appealing to new businesses was a good one, Ames said he isn't surprised that approach didn't work.

"It strikes me as bad timing," he said. "A new business will not be ready to make decisions about bookkeeping until they get established and begin to grow a bit. At the time when they are filing their DBA [doing-business-as] statements, most of them don't even know they will need a bookkeeper, and very few of them would have the money on hand to hire one even if they did."

He suggested that instead of targeting brand-new businesses, Tarango send his marketing materials to business owners and appeal to those who are unhappy with the prices they are paying or with the wait for their financial reports.

Ames said Tarango should revise his fliers so they target specific types of businesses, such as small retail shops or dry cleaners. He recommended that Tarango purchase marketing database software such as D&B MarketPlace or buy lists from direct-mail brokers who charge by the unit, which might be more economical.

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