Industry Watch

Cash back: The Fox siblings support local artists, both in their gallery and through their tax services

Niche by design

For Fox Tax, catering to the artistic has been a rewarding strategy

By Erica Rivera
03-25-2014

Doing your taxes may be a drag, but brother-sister business partners Mark and Alyssa Fox of Fox Tax are trying to make the process less painful.
 
Originally from Stillwater, Mark and Alyssa graduated from North Central University and the University of Minnesota, respectively. They were both employed for five years at a more traditional firm before deciding to strike out on their own in 2004. They were already friends with many artists and musicians, so creatives seemed like a natural client base. 
 
“It makes me feel better to help artists with their finances than large corporations,” Mark says. “I enjoy the relationships more.” 
 
The Foxes opened up shop in Mark’s home. Referrals from friends helped establish the business during its initial two years, but the Foxes noticed a “need for education in the arts industry to translate and teach people about how to do taxes,” Alyssa says.
 
In response, the Foxes developed a book called “Creative Tax Planning: A Guide for Artists and Musicians”. The three-ring binder was designed like a day planner, with a calendar, mileage tally, expense-tracking worksheets, a glossary of business tax terms, and a section for collecting receipts.
 
At the time, Fox Tax had about 100 clients. Mark and Alyssa decided to print 2,000 copies of the book. “I remember looking at Mark after charging up our credit cards and saying, ‘I hope this works!’ because we didn’t know who we were going to sell them to,” Alyssa says. “We took a leap of faith and that really got us started.”
 
They marketed the planner at local events. David Hartman, a former singer-songwriter for a local band, was introduced to Mark Fox as a “man about town.” Now Mark does Hartman’s personal taxes.
 
“They take something you have to do and they make it fun,” Hartman says. “They cater specifically to artists that wouldn’t know where to begin when it comes to line-iteming and they make sure that artists get every penny that they’re entitled to.”
 
Word of mouth about Fox Tax’s unconventional approach to number crunching spread, and soon Mark’s dining room was overtaken by paperwork. The Foxes looked for a year to find an appropriate office space when acquaintances mentioned that the main floor of a Northeast Minneapolis building would be opening up for lease. It was 2,500 square feet of raw warehouse space. The Foxes snatched it up before it even went on the rental market.
 
They immediately turned half of the space into an art gallery, a physical representation of the business’s philosophy that “If we promote others, they promote us.”
 
“I enjoy curating the art shows,” Mark says. “I’m good at rearranging things, whether it’s numbers on a tax return or a room.” Fox Tax hired designer Ocupop, a Milwaukee-based creative agency, to do their website and branding. “That relationship was invaluable,” Mark says. He cites hiring the designer as one of the best business decisions Fox Tax made.
“It’s a hard balance between growth and quality control.” —Mark Fox
When Fox Tax began operating at its new address in January 2007, it had 600 clients. That number has since swelled to more than 4,000. Eliesa Johnson, a luxury wedding photographer, is a longtime client. “The service is incredible. They’ve helped me streamline things,” she says. As her company Photogen has grown, Fox Tax has adapted its services to her needs. She now has a standing monthly appointment to reconcile her books. 
 
“We’re artists, not accountants or business people, so it helps to have someone show us and advise us,” Johnson says.
 
While Fox Tax currently has up to 12 staff working during tax season, finding more help has not been easy. “It has been a challenge to hire people,” Mark says. “It’s difficult to find tax preparers that have the experience and also have the personality.” 
 
“Taxes can be an uncomfortable and stressful thing for people,” Alyssa says, so accountants must make clients feel at ease. Logic and number skills are essential, of course, but it’s just as important for hires to be sociable.
 
“We’re looking for a certain personality,” Mark says. 
 
Fox Tax reached client capacity in 2013, so they started a waiting list for new clients. Right now, that list is 500 people deep. “We’ve grown so fast and we just had to put the brakes on until we found more staff,” Mark says. “It’s a hard balance between growth and quality control.”
 
Current clients are their top priority. Alyssa foresees adding more clients as their operation becomes more efficient.
 
“If I wreck the relationships we have, then the new clients aren’t worth anything to me,” Mark says.
 
Fox Tax doesn’t anticipate becoming a franchise, nor do they envision opening offices outside of Minnesota.
 
“When I was younger and had more energy, I thought offices in New York and L.A. would be awesome,” Mark says. “But with the advent of the Internet, we can — and do — have clients all over the country. I don’t know if that’s even necessary anymore.”
 
The Foxes seem content to go with the flow where the future is concerned. “Slow and steady growth” is how Alyssa describes their plan. 
As for working with family, both siblings endorse the practice. “I’m just really lucky that I have family that I get along with and trust,” Mark says.
 
Alyssa agrees: “I totally trust him to keep the place from burning down.” 

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