How to Start Your Own Accounting Business
- February 13, 2023
Are you ready to start your own accounting business? If you answered yes and are now wondering how to start an accounting firm, you’ve come to the right place. There are several elements to consider when starting an accounting business, from researching your target audience and creating a website to purchasing equipment and preparing the location. Although this process may initially seem complicated, we will explore the major drivers needed to successfully start an accounting business and walk through the essential elements that will bring clients to your door.
Do Your Homework
The first major driver of starting your own accounting business is found in conducting research and in determining who your customers might be. Who is your target audience? Define the needs or problems of potential clients and decide the ways in which you’ll provide solutions for them. For example, are your accounting clients individuals or will your business serve corporations and non-profit organizations? Will you offer bookkeeping services, create payroll reports and prepare business tax filings? Consider the extent of services you’ll choose to provide and build your target audience from there.
To complete this homework, thoroughly research your competitors to discover which services each provides, how much customers are charged for services, and the differences between the accounting services of competitors and those of your own accounting business. The success of your accounting business may depend on the extent to which your business is different from other accountants catering to the same audience. Check out your competitors as thoroughly as possible in your research to determine what is unique about the services offered by others and how your accounting business can offer unique advantages for your clients. Doing your homework in research and discovery will benchmark the critical aspects of your accounting business plan.
Build Your Business Plan
The second driver in starting your own accounting business is found within your business plan. First, create the overarching goals and objectives that will form the foundation of your business. From there, include detailed financial plans, your marketing strategy for potential, new, and returning clients, and an organizational sketch of your accounting business from years one to five. To streamline your process, use this business plan template, for comprehensive and detailed results.
Your completed accounting business plan provides not only the basis of your goals and processes; it also acts as the major definer of the financial picture of your accounting business. Banks and other lending institutions will expect to review your accounting business plan, as will capital venture or angel investors. Because this document presents your immediate and future plans for start-up and growth, ensure the accounting business plan is fully-developed and ready to present upon completion.
In conjunction with offering your business plan to lenders or investors, you’ll want to prepare a visual presentation or “pitch deck” as a support to your business plan. There are several ways to create supporting presentation visuals, such as PowerPoint slides, an infographic, or a brief video highlighting your accounting business. The visual presentation should be brief, engaging, and supportive of the accounting business plan, similar to these pitch deck examples, which will help retain the interest of those present.
Create Your Marketing Strategy
A pivotal driver in starting your own accounting business will be the formation of your marketing strategy. Initial efforts should include a business website and the creation of social media outlets, such as Facebook and Instagram, for communication with clients. Your specific strategies will heavily depend on your target audience:
If individuals are your target audience, you’ll want to reach them with personalized invitations using your business website. Create an email campaign to introduce yourself and highlight the services offered. Because most people have tax questions, start a blog on your site to address common questions and answers. Offer initial consultations free of charge or add a service, such as a free retirement plan estimate for established clients. Most significantly, get out into your community to meet potential clients. Attend community events and gatherings and become involved in your local government. The people connections you make will often turn into client-business relationships, all of which bring long-term growth to your accounting business.
If businesses are your target audience, you’ll want to create a marketing strategy that is directed to specific owners and other executives. Efforts to reach potential clients in this target audience may include arranging personal interviews or setting up a review of tax filings to suggest tax savings or improvements. Additionally, use social media, such as Facebook and Instagram, to engage your audience and, in particular, join community clubs and attend charitable events where executives often gather. Again, the people connections you make will often turn into client-business relationships and that spells long-term growth for your accounting business. For additional ideas in marketing your accounting business, consider the ideas found in these small business marketing tips.
Calculate Start-Up Costs and Secure Funding
Another major driver in starting your own accounting business will be found in correctly estimating the costs involved. Although it is tempting to estimate costs and hope for the best, it is critical to have enough funding for starting and operating your accounting business for the first six months. Projected start-up costs often include up to six additional months of expenses, as most businesses require a full year to realize profitability. Costs may include salaries, computer equipment and software, lease payments, utilities, furnishings, and any permits or licenses the city requires.
If you need to secure funding, present your business plan to banks or financial institutions for a loan, such as those found in this list of small business loans, or approach charitable organizations for a one-time gift or grant. Use your presentation skills to request funding and allow your business plan to support the presentation.
Choose Your Location
Many accounting businesses are initially operated from a home office; however, if you have the funds, it is advantageous to open an office to receive your clients. This is because financial matters are private and clients are reassured by a professional and confidential office setting. If the cost is a consideration, choose to rent a small conference room on an as-needed basis, or use an office-share agreement with private daily hours included. Whatever configuration you choose, ensure your consultations will be private.
Hire Your Staff
You may not need staff members as a start-up accounting business; however, within six months it is likely that you will need an assistant or associate bookkeeper. Within one to two years, you may need to hire more than one bookkeeper and an administrative manager. Personnel additions can support and enhance your accounting business or, conversely, they can create time-consuming management issues that detract from growing your business. The key to establishing a strong team of staff members is determined in the hiring process.
When hiring, select personnel for positions that will best suit them. For example, hire assistants who are people-friendly and sincerely courteous. Select bookkeepers who have a razor-sharp eye for details and love their calculators. When hiring managers, look for those who have a history of successful staff integrations and those who can solve conflicts via thoughtful negotiation. In short, place staff members where they can best perform to enhance your company’s growth and success.
Review and Assess Your Accounting Business
The final major driver in starting your own accounting business is obtaining thoughtful advice. Taking the time to review and assess your progress before starting your business will allow you to consider the full framework of your business. You may choose to add to or remove certain elements from your current business plan; reviewing and assessing allows you to fine-tune your plan to meet your expectations. Ask a close business associate for a professional opinion on your progress and preparation to date. Secure advice from others in your circle of the community before starting your own business. The advice of seasoned professionals will add a valuable layer of noteworthy wisdom to your plans.
Are you ready to start your own accounting business? If you’ve researched your audience, created a comprehensive business plan, prepared a marketing strategy, calculated the costs, prepared your location, and hired staff members, you’ve completed the major drivers of success for your accounting business. The only remaining effort is to walk through the entrance door of your own accounting business.