Are you thinking of starting your own bookkeeping business and don’t know how to go about it? Perhaps you have doubts about it being a lucrative profession. Just recently, the Bureau of Labor Statistics reported that accounting and auditing are one of the occupations with the highest growth.
This is due to the large of number businesses that sprung up the past decade—maybe, the largest ever. This means more people would rather have someone else do it properly on their behalf, hence the need for more auditors and bookkeepers.
Another reason why there was an increase in demand for accountants is that, according to the US Small Business Administration website, small businesses make up 97.7% of the US economy, and most of them can’t afford to keep a full-time accountant on their payroll; they outsource, instead, which is an intelligent financial decision.
So, the question is not “Will this be worth it?” but, “How do I go about it?”
This is a step-by-step guide to starting your own accounting firm:
What Parts of Accounting Interest You?
If you want to become an accounting professional, chances are, you’re driven by your passion and of course, the pleasure you derive from manipulating numbers. However, that shouldn’t be your only driving force, because if that is all, odds are you might not go very far. You’re more than just an accountant; you're an entrepreneur. The latter is more exact. Hence you must find your value proposition, just like all businessmen do.
Accounting is one of the most diverse professions with more branches than you can think of, and so, it is crucial you understand you can’t offer all of them as a service. This has nothing to do with your competence, it is because when it comes to business and branding and the number of services you offer, less is always more— focusing on a niche establishes you as an expert and helps you stand out.
If you’re already consulting for businesses, for instance, you might focus on training firms on how to use accounting software and other consulting activities. Services you could offer are, but not limited, to the following: auditing, loan packaging, payroll, software training, QuickBooks Professional Advisor.
Develop a Solid Business Plan
“Failure to plan is planning to fail,” you hear iterated all the time, but that’s because it’s true. A business plan is more than just a document; it's where you lay the foundation of your company, yet many take it for granted by doing a shoddy one or do nothing at all; they lack the knowledge of its true purpose.
A business plan helps identifying your vision and the purpose for your ideas, identifying your products or services, and your targeting market. Also, in case, you’re thinking of inviting investors now or in the future, a solid one goes a long way in convincing them. It means you know what you’re doing. Meanwhile, there's no other way to impress an investor more than appearing to know what you’re doing.
Below are few of the many questions a business plan helps you find answers to:
- State your firm’s mission, values and vision
- Agree on your structure; will it be Limited Liability Company (LLC) or a Limited Liability Partnership (LLP)?
- Identify your target demography and how to reach them
- Understand your competition, its strength and weakness, and how to serve better
- Conduct a market and sales analysis
Business Plan for Accounting Firm
A Business Plan that is used to outline all the aspects of a business.
Register your Business — Get Your License and Permits
You shouldn’t be in operation unless your business is registered. Registering your business gives you an opportunity to know those laws that bind you both as an accountant and an entrepreneur, with bodies (both private and governmental) regulating the activities of your profession.
Laws that regulate business activities vary depending on the profession and the nature of your practise, and the state or country you’re operating from. Not knowing this might be a clog in your enterprise’s wheel in the future.
So, how do you go about properly setting up and registering your bookkeeping business? Follow the steps below:
- Come up with a unique business name; be sure it has never been used by anyone or a company before as this might land you in legal waters you don’t want to be in as a fledgling business. The good side to this is that it differentiates you from others who do the same thing.
- Talk to a qualified lawyer or someone who is versed in the legal matters of business registration. The aim is to ensure all your actions are in your favor in the long run.
- Payment of tax is a duty, and failure to do it properly is also a crime, so get to know your tax matters from the onset. Businesses pay different kinds of taxes depending on their nature and structure. For instance, there is corporate tax, employment tax, personal income tax, and so on. Learn which of this you will be paying.
- Apply for trademarks. This discerns you from other businesses that also do the same thing, and protects your name, logos, and symbol from being used by another person.
- Get an Employer Identification Number (EIN). If you’re going to have any employees, it is important to get this.
Hiring the Right Employees
There is no silver bullet or magic formula to this, but here is something you must keep in the back of your mind: A good CPA doesn’t translate to a good entrepreneur or team member, they’re both distinct.
Human resource (including yourself) is the most difficult in business management. An incredible core of your operations is your employees or those who work for you. Your employees shouldn’t just be those who are good at manipulating numbers, they must share the same goal, vision and actual work ethics. This is important, regardless of what position the person holds in your company.
So, how do you go about hiring the right one? What processes do they take?
Again, there is no single, right procedure. Aside placing an advert or asking candidates to submit their CVs to check if they meet your criteria, you may ask people to refer to you to whoever they think is reliable and responsible. Acquaint them with the information on the kind of person you intend to work with.
Even this is not enough, but it is the most reliable way to get good employees.
Learn How to Market Your Accounting Business
After setting up the business, having employees in place, what follows should be how to get your ideas out there, reaching those who need you.
The accounting industry is one of the fastest growing professions or occupations, which therefore means the demand is high. What this also means is that you must sweat in order to achieve your goals; competition is almost as high as the demand and you have to be strategic or methodical about getting clients and letting people know about your new venture. We are talking about marketing your new business.
The following are various marketing tools to properly market your accounting firm:
- Ask your current clients to introduce you to other business-owners they know, who might need your services. Chances are incredibly high that if your work is top-notch and you satisfy your current clients, they’d be willing to introduce you to other firms they know who might need your services.
- Brand souvenirs and give them to your clients. This is like free adverts. Have pens, notepads, key holders, and bottle openers branded with your business name and logo; give them to your clients and influencers. In this case, an influencer could be anyone: a family member or friends.
- Set up a functioning and user-friendly business website with a blog. This is probably the biggest and the most important medium to reach your intended clients, as it’s already established that businesses with an up-to-date website fare better than those without. According to Digital Marketing Magazine, 79% of consumers in the US rely on online information before buying. In this day and age, it is almost impossible to imagine a business without a website and a blog. Your firm shouldn’t be left out of this trend.
- Constantly network or ask for help. Every entrepreneur knows the importance of networking, as you can never tell who knows who. Attend industry events, be visible and appear wherever your colleagues are, tell them about your new business and ask them for help or leads. You might not get a client by hanging out with colleagues, but information they say is key and that can only be guaranteed when you keep in touch with those in your industry.
- Learn how to use social media. There is no reason why you shouldn’t be leveraging the role and the power social media plays in connecting people, customers, or attracting more clients.
- Make sure you deliver; always.
This cannot be overemphasized as doing everything mentioned above won’t guarantee a business success; in fact, you might do all those well and still fail. Your success will be determined by how well you execute every job.
Develop a solid business plan, connect with people, hire the right team members and aggressively market your new accounting firm; merge all those with a good job, and sky’s the limit.
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