If you’re looking to start an accounting firm, you’re probably tired of being working for the man, and you want to be the man – figuratively. You may wish they did things differently, and you just want to handle things your way. It’s understandable, as many people start their businesses for the same reason. Natural leaders wish to have their values and passions instilled into their work – which is often a unique selling point for small business owners.
But starting an accounting firm isn’t as easy as it sounds. Are there simple aspects? Yes, but you need to lay the groundwork for legal compliance and financial success before you quit your job and take a deep dive into the world of being a business owner. In this article, you’ll learn the basic foundational steps for starting a successful accounting firm.
What Services Will You Offer?
If you’re a certified public accountant (CPA), you’ll have more flexibility in terms of the services that you can offer your clients. First, it’s good to pick a niche industry to target. Then, you can provide specialized services for that niche. For example, if you work with clients in the trucking industry, you could sell bookkeeping, tax preparation, payroll services, and more. Don’t forget that trucking companies also have to pay quarterly fuel taxes per the International Fuel Tax Agreement (IFTA) – which could be a specialized service you provide.
Business Building Blocks
Before putting your services on the market, the first step is becoming a legal business entity. While this is not legal advice, it is difficult to be taken seriously if you don’t take yourself seriously.
So first, you’ll need to write a business plan if you’re going to seek financial help from investors. Next, set up a business structure – such as an LLC or S-corp. Then, you can obtain an Employer Identification Number (EIN) from the IRS. This is needed to set up a business bank account and pay employees and the general requirements vary between states.
A long-debated topic of discussion among entrepreneurs is the hourly-rate versus fixed-rate pricing structure. Honestly, the one you choose all boils down to profitability. While some services will make more money hourly, others are better set at fixed prices. This is especially true if you can operate quickly while providing immense value to your clients. For example, if you offer tax preparation, you’ll want to charge a fixed rate for each type – with simple returns being the cheapest, then raising the price as complexity increases.
You may think you can do it all independently, especially if you’re working from home. However, a lot of clerical work will build up if you operate this way. So instead, hire one or two office workers to handle the front desk and take care of tedious tasks. When you delegate these sorts of monotonous tasks, you can get on with what you do best: building your client base. Then, you can hire additional CPAs or subcontract with freelancers as your business scales.
As you build your client base, you’re going to need accounting practice management software to track work, meet deadlines, and assign tasks to others. Additionally, you can communicate quickly with your employees or subcontractors if everyone works remotely. Plus, workflow management allows you to rest easier, knowing everyone is on the same page. While you may be able to handle workflow management internally at first, as a busines grows, there is often too much room for human error.
Although, you risk developing a reputation for being disorganized and late without it. And nobody wants to work for a firm that adds unnecessary stress to their daily routine. So you’re more likely to retain reliable employees if you can make their job manageable and straightforward.
Your Client Base
Building your client base may be the most daunting part of starting a successful accounting firm. However, you can make it work if you dedicate yourself to learning adequate sales skills. When you’re first starting, it’s essential to put as much effort as possible into marketing yourself. There are several ways to market your business, including:
- Asking friends and family to spread the word: Word of mouth advertising is far from dead and it is a great way to establish yourself locally;
- Signing up for paid ads on Google or social media: Paid ads are a great short-term and immediate option for visibility and attracting new leads;
- Hire someone for content marketing: Marketing your accounting services via content is one of the most organic ways to expand your client base. While blog posting may seem simple enough, there are a lot of steps to make sure your content is optimized based on search engine ranking factors, so it is best to leave content marketing to the professionals.
Once you land clients, ensure that you’re giving them top-notch care, so they feel like they can’t get your services anywhere else. This is critical for standing out against the competition as well as client retention. The key is relating to them personally and showing (not just telling) them you have their best interests at heart.
Starting a successful accounting firm is simple in some ways, but you have to be dedicated to keeping it running long-term. If you can’t stay on top of tasks, you’ll fall behind, and your business will crumble within the first year. Starting a successful accounting firm is the tip of the ice berg. Long-term success comes from proactively evolving and expanding your business to be the best it can be.