Giving thought to starting your own accounting firm? Maybe you have and are already resolved to do so. If that’s the case, there are plenty of next steps that need to be taken to get the goal from idea into working, profitable action.
Along with choosing what the business structure might look like, marketing for clients, finding an office and getting caught up on all the legality, there is a list of things that need to be in order for an accounting business to run smoothly.
Starting a CPA, just like any other business, can be a lot of work, but having the knowledge of what to attend to and a basic order to prepare things will save a lot of time, money, and energy in the long run. The stress will add up if important, unknown details start jumping out at you. The good news is that there will always be a need for accounting firms.
The professional services that accountants provide businesses and individuals with their finances is a necessary aspect of modern society. Even with the shift in economic behavior as a result of financial technologies today, there is still plenty of room for accountants to find their niche in the market. More than that, accounting firms consistently rank as one of the more profitable small businesses to start and manage.
It is important to remember that there is much more to starting a small business than just registering with the state and opening your doors for business. With all this in mind, here is a list of tips and suggestions for some things to do when starting your own accounting firm.
A clear plan will always get you further in life than just some knowledge and enthusiasm. Getting a clear picture of your mission, goals, and operations is a great place to start. Here are some important topics to consider.
Who is Your Target Market?
Many people can dream about running a large, super profitable company, but that very rarely happens right out of the gate. Most businesses, even the large ones, started in humble beginnings, but one well-served client can mean the beginning of a long line of willing customers. Choosing which economic niche you may want to focus on is helpful when beginning to narrow down other important factors like office sizes, employees, startup costs, and insurance.
Are you going to focus on serving local small businesses, or do you want to land a large, lucrative business? No matter where you settle it is wise to consider starting smaller and then gradually working your way up to larger projects as you have the experience to accomplish your goals.
Entrepreneurs have to wear a lot of different hats. Understanding what your skills are, what you still need to learn, what you can outsource, and who you may need to hire to fill in the gaps will help to answer this next question: Do you see yourself as a business owner, a co-owner, or boss?
If you have the capital to start a business and can hire others to run more of the day to day while you seek out clients and projects, then you may be more of the business owner type. If you are someone who has the knowledge but likes working with other people and recognizes the benefits of multiple minds, then maybe partnering with another accountant— perhaps someone with less experience but the right career MBA to their name — then being a co-owner might be your step.
Some people know and really enjoy being the leader who can motivate and support a team of people. Others prefer to work alone and can get a lot done that way. Working all this out before considering the next steps will be very helpful. If you haven’t figured these questions out yet, it would be best to start by considering some other points.
Much of the allure in starting a business has to do with the freedom and personal flexibility that come with being your own boss (or co-owner), but that means you may need to make sacrifices in other aspects of the business. If you only desire to work 20 hours a week, wanting to start small and gradually build your way into a full-time business, then your income levels will obviously not likely be as high as a full-time office.
Not having a full-time business may also mean that you don’t need, or can’t yet afford, a formal business space. While there is likely much more flexibility and freedom in a company that is run out of your own home then you will likely have more time for personal obligations, but not having an office may limit the type of professionalism you can present to a certain clientele. While some people can run a business out of their home, that can be stressful and a bit awkward if you’re looking or may need to hire employees in the future.
If you dream of building a beautiful office space to support warm office culture, then an office and a small size team might be a better way to go. Either way, all of these factors play into the goals and business model that you set for yourself.
Start Up Costs
Hopefully by this point you have a general idea of what type of lifestyle balance you want and thus will dictate the size and profitability of the accounting practice you see yourself opening. From here, budgets can really begin to take a toll on the sheen that accompanies a dream. What does it even cost to start a business? All of that will be dependent on answering the previous questions.
Regardless of what niche you start from, your services will likely be needed, so getting your first client may come sooner than you think.