U-Tax-It: Executive Summary
- Overview
Problem
U-Tax-It is a service product that is designed to solve the hassle and time wasted getting your taxes done. The current state of the world is that the average tax preparation is time consuming and consists of a lot of tedious paperwork. The problem is that it is hard to calculate accurate returns for the average taxpayers on their own. The customer can achieve guaranteed accuracy with this do- it yourself product, twenty four hours a day, seven days a week at their convenience.
Solution: U-Tax-It Kiosk
This product is a self- service tax kiosk which will allow you to complete your annual tax filing. The built in scanner accepts your W-2’s and other required tax documents. It also includes a card reader for identification purposes such as driver’s license, or state identification cards. The built-in printer will share with you all of your finalized tax documents. The digital touch screen and keyboard offer ease of use for quick selections in the tax preparation process. Additional 24 hour support is made available through a live webcam with built in microphone, and speakers to help customers through the step-by-step tax filing process.
The tax kiosk’s built in payment system takes all major credit and debit cards. This will cost customers $75 for a standard tax filing and $100 for any non-standard tax filing. At the end of the tax preparation cycle, the kiosk will provide options to the customer. The customer will be asked if they prefer a printout of their documents or a digital copy to be sent through e-mail. The kiosk will automatically print a receipt with each tax preparation and will include when and how much the filer will receive with their refund. If the filer owes money, it will tell them how much, and when it is due to the IRS.
The customer benefits because they are in control of all aspects of their tax preparation. Taxpayers won’t have to wait in line or schedule an appointment with an accountant.
The product makes a profit by receiving a percentage off of every processed transaction at the kiosk. The customer begins their transaction by swiping a bank card or credit card to the card reader. The product is sold directly to the customer when they choose to utilize the kiosk. At this time there are no other ways that we plan to make money.
On average, a person files 45 tax preparations in a lifetime. With current projections of $75 for standard tax filing, we could generate $3375 revenue. With $100 dollars for additional tax preparation tax filing, we could generate an additional $4500. The competitors only offer online digital software with no live support or assistance when filing. In- person filings are much more costly and demand specific hours of operations.
- The Market
U-Tax It! will target male and female consumers between the ages of 18 and 65. According to Housing Economics (www.nahb.org/generic) the average consumer 18 to 35, has an AGI (adjusted gross income) of $80,000 or less. Consumers 35 to 45 have an AGI of $120,000. Consumers 45 and over have an AGI of $140,000. In the big states of New York and Florida there are over 19,000,000 people in each state, California has over 38,000,000, Texas has over 26,000,000 and North Carolina has over 9,000,000 that could benefit from U-Tax-It. In the United States there are over 300,000,000 (http://quickfacts.census.gov/) people that would be able to access a U-Tax-IT kiosk that would charge a reasonable rate and save the consumer money. Surveys among students at NCCU showed that students aged 18 to 22 do not pay taxes annually. These students are being carried as dependents on their parents’ taxes. Another survey taken among women aged 26 to 36 showed that women itemized their taxes and therefore would like the convenience of the kiosk so as to not pay high cost of tax preparers. Male and female consumers in the United States between the ages of 18-49 with post-secondary education are more computer savvy. Therefore, these age groups will benefit from the express service of the kiosk on a monthly, quarterly and annual base.
The estimated market growth will be determined by the location of the machines and the amount of machines made available in a given area. The estimated size of the market for U-Tax-It will be determined by the number of potential customers multiplied by the average cost of services and will determine the annual consumption rate.
III. Competition
U-Tax It is a self-service tax kiosk to file your taxes for everyone. Advantages for using the tax kiosk are less time consuming, convenience, easy access (train and bus stations, airport, mall), and quick refunds. Online and mobile consumer tax preparation programs make it easy to do your own taxes and confidently claim all your deductions and credits. As you answer simple questions, the program completes your tax forms and checks for errors and potential opportunities. The list below includes a few of the many competitors that are available, whether you choose to do your own taxes or obtain assistance from a reputable servicer. Regardless the many competitors that are available, the customer’s needs are being met.
H&R Block
H&R Block is a tax preparation company in the United States, claiming more than 24.5 million tax returns prepared worldwide. The Kansas City based was founded in 1955 by brothers Henry W. Bloch and Richard Bloch. Block today operates 11,000 retail tax offices in the United States, plus another 1,700 abroad. Lock offers its own consumer tax software, as well as online tax preparation and electronic filing from their website. H&R Block’s 2012 revenue was $3.04 billion and their net Income is $455 million (www.Wikipedia.org/wiki/H&R_Block )
Turbo Tax
TurboTax is an American tax preparation software package developed by Michael A. Chipman in the mid-1980s. A major disadvantage of TurboTax is with filers that use the basic version of the software; federal filing is free. However, state filing is not free, and the cost of using the program to file state returns is not presented to the user until they’ve already completed entering their information for federal returns. An advantage is TurboTax makes a better use of your prior returns. In other words, based on your tax filing situation, a portion of your returns is already finished even before you input information. Another advantage, as you see changes in our refund or tax liability amount, there will be explanations which give you a better sense of your tax profile. Finally, TurboTax claims to provide a faster completion time. (www.forbes.com/profile/michael-chipman/)
Tax Act
Tax Act is an American tax preparation software package. It is available in online, software, and tablets versions. Tax Act is a member of the Free Alliance, a free federal tax preparation and electronic filing program for eligible individual taxpayers, develop through a partnership between the IRS and a group of private sector tax software companies. In October, 2011, H&R Block attempted to pay $287.5 million in cash to acquire Tax Act. However, in November, 2911, a federal judge sided with the Justice Department, and both companies mutually terminated the contract.
Liberty Tax Service
Liberty Tax Service is a United States-based company specializing in the preparation of tax returns for individual and small businesses. The company began in Canada in 1997 by John Hewitt, co-founder of Jackson Hewitt, and became Liberty Tax Service and opened 5 offices in the United States. Liberty appeared on the Forbes “Top 20 Franchises for the Buck” in 2012. The company is well known for waivers and helping low income earners file their taxes.
http://www.forbes.com/sites/jjcola/2012/02/08/top-20-franchises-for-the-buck
Jackson Hewitt
Jackson Hewitt Tax Service, Inc. is the second largest tax preparation service in the United States, and responsible for preparing over 2.2 million computerized federal, state, and local individual income tax returns each year. The company currently operates more than 6,800 franchised and company-owned locations throughout the United States and Puerto Rico. Jackson Hewitt offer MasterCard cash cards so customers would have easier access to refund accounts, and offer ATMs where clients could cash their refund checks on-site.
http://www.Jacksonhewitt.com/secondary.aspx?id=10294
Accountants
Accountants are particularly busy during tax seasons, as many individuals and businesses rely on them for tax preparations. Many Certified Public Accountants also prepare taxes. CPAs have an advanced accounting skill level, and are licensed by the state.
Accredited Tax Advisors and Preparers
An accredited tax advisor or accredited tax preparer has the qualifications to handle complex tax planning situations for businesses and high earning individuals. Their level of education is comparable to a master’s degree, and is administered by the National Endowment for Financial Education.
www.taxes.answers.com/filing-your-taxes/the-different-types-of-professional-tax-preparers
- Risk/Opportunity
In order to determine our competitive advantage in this market, we conducted a SWOT analysis where we analyzed our product’s strengths, weaknesses, opportunities, and threats. The reason for doing this is to evaluate U-Tax-It’s financial and operational practices and determine optimal strategies to help develop a plan for the future. We identified internal and external factors that may affect the success of U-Tax-It. I used research from Houston Chronicle on similar types of services. (www.smallbusiness.chron.com/swot-analysis-bookeeping-tax-companies-34194.html)
Strengths
Look at the popularity of a kiosk ATMs. They are everywhere, gas stations, grocery stores, and restaurants. Using a kiosk as the vehicle for this product will rely on the visibility as strength. Convenience is another strength of this product. When potential clients can access a system in multiple places, they are more likely to take advantage of it. Kiosks take up relatively little space and the amount of overhead will be almost eliminated. Even though this product still requires using someone else’s space, it will be require far less than leasing than a store-front, like our competition. This kiosk will use a revolutionary scanning system that alleviates the need to manually enter W-2’s and identification information and therefore save our clients time. Our kiosk will have a live webcam option that a client can access a ‘human’ support system and additional service. This box would work for tech-gurus to tech-newbies.
Weaknesses and Threats
As with any new product or service, there are areas of weakness. The startup cost for a kiosk will require working with an IT and electronic professional to build a machine to our specifics. Then the materials and production of multiple kiosks may be very costly. U-Tax-It is completely dependent on other businesses’ physical locations and facilities. We will dependent on their security, days and hours of operation, and utilities. Although taxes are “inevitable”, it is primarily a seasonal type of need. On top of that, it is short running season from late January to April. Even with accounting or bookkeeping, the seasons are year-end types of services.
Just like bank atms, competing banks can offer similar kiosks quickly and at similar conveniences. It may be a huge obstacle gaining brand recognition like our competitors. Our team has identified similar threats in online internet programs already on the market such as TurboTax. Other store-front competition has a ‘live’ person to work with. If you are not familiar with the tax process, you will have to rely heavily on a ‘live person’. Unfortunately state taxes can differ greatly from state to state and year to year, making it a hassle and an added expense to adjust programming to each state’s specifics. This would require the employment of accounting and IT specialist to make sure they are up to date on tax laws and regulations.
Opportunities
We have come to a conclusion that we have to expand and find additional opportunities to be relevant all year long. There is potential for expansion for online sales like the direction many our competitors have already taken and been successful with. We need to develop additional services at our kiosks, like combining banking and bookkeeping. It is important to build partnerships with other businesses that will host our kiosks. Our selling point is that we can bring in foot traffic and help market each other’s services and products.
The UTaxIt proposal was submitted in response to a Request For Proposal (RFP) from an investment group looking to invest in a new product, service or company. The RFP included the following details:
• Proposal should be 3 pages
• Proposal should explain a new product, service or company
• Proposal should include information on the potential market
• Proposal should include a competitive analysis
Evaluate the UTaxIt proposal using the following questions:
1) Did the proposal follow the details given in the RFP? Why or why not
2) What is the proposal’s general purpose and specific purpose?
3) Choose one sentence from the actual proposal that provides the main idea/thesis statement.
4) Who should the audience be for the proposal? Is that who the proposal is written to? Explain.
5) Is the market information effective? Why or why not?
6) Evaluate the competitive analysis portion of the proposal. Is it effective/ineffective? Why/why not?
7) Are the introduction and conclusion effective? If so, why? If not, rewrite to improve.
8) Imagine you are helping the company who is writing the proposal prepare their submission. What recommendations would you make for them for their next draft?
