Directions : Imagine you’re part of a consulting group working with the writers of the UTAXIT proposal. They are submitting this proposal to a big investment firm in hopes of gaining funding. They’ve come to you so you can analyze their work and give them your recommendations for things to keep and things to change.
You will analyze the UTAX-It business proposal
Download or Read the Business Proposal
U-Tax-It: Executive Summary
I. 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 builtin 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.
II. 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
IV. 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.
UTAXIT Worksheet
The UTAXIT proposal was submitted in response to a Request for Proposal (RFP) from an
venture capital investment firm. The firm is looking for new products, companies, technologies,
etc. to invest in. The guidelines for the RFP are as follows:
? Proposal must be for investment in a new product, company, technology, service
? Proposal must be 3-5 pages and must include market data, competitive analysis,
and explanation of the opportunity
? This is a competitive RFP, and only the top 10 proposals will be considered
1) Did the proposal follow the guidelines given in the RFP? Why or why not?
2) Is the proposal’s purpose to inform or persuade?
3) Choose one sentence from the actual proposal the provides the main message/thesis
statement
4) Who should the audience be for the proposal? Is that who the proposal is written for?
Explain. What is the audience’s primary priority and /or reason for wanting the proposal?
5) Is the market information reliable and relevant? Why/why not?
6) Evaluate the competitive analysis. Is it effective? Why/why not?
7) Are the intro and conclusion effective? Why/Why not?
8) Is the proposal formatted for readability (Chapter 6 / PARC)
9) Imagine the UTAXIT company has asked for your help in reviewing the proposal. What
would be three specific recommendations you would make to improve it

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