How to Start Up Your Own Accountancy Practice
A background in accounting can open up so many career choices from a role in an accounts department, right up to consulting, debt management, forensic accounting and more. Many careers advisors would put the smart money on a finance degree as an ideal way to learn general business skills and always have a reasonably good chance of staying employed. On the downside of an exciting position in a top-rated finance career, there can be long hours and high pressure in return for those highly paid positions.
When it comes down to leaving a corporate career, again an accounting qualification can put you in a great position for starting your own business. With a head for figures, the ability to judge financial risks and ensure a solid fiscal standing for a fledgeling firm you’ll be streets ahead of many other entrepreneurs.
A career break is often the first consideration for new mums when faced with the reality of a beautiful little person who needs their full attention. It can be a great time to take the first steps in setting up on your own, giving you the opportunity to put your own stamp on things. The opportunity of a career break from a high-pressure corporate career can pave the way for a more creative approach to funding family finances.
At Brixx, we provide software and online tools to help both aspiring entrepreneurs and accountants to visualise how their business can grow. As an accountant, using Brixx can help you show your customers who are less comfortable with figures how financial improvements can be made, how forecasting can help them make good decisions and how to look after the health of their business. In this blog, we speak to two accountants who have taken the leap from a corporate career to starting their own practice. The highs, the lows and what worked for them.
Kelly has run her own accountancy practice for the last five years. She is a married mother of two who balances a successful business with the flexibility of enjoying her children’s early years and working from home.
Starting a corporate career as a qualified management accountant gave Kelly a great start working with large, household-name companies. Her clients had corporate headquarters in the USA which meant long working hours and a requirement to be available in the client’s time zone during their office day. Month-end would always be an extremely busy time, staying late to meet deadlines and deliver figures to the management teams. Typically, Kelly would be staying in the office until 10pm three to for nights of the week to achieve the month-end deadlines.
On the good things about a corporate career, Kelly says:” The camaraderie of a team was lovely, being able to share work problems with colleagues and have a group of like-minded contemporaries to solve issues and come up with creative ideas for resolving difficult situations. It was great to have human resources departments and IT on hand to solve your problems quickly and efficiently too! It was a structured, supportive environment to work in. Working for a large company means that your career development is taken care of too. There’s an expected trajectory of career advancement and you’re given the opportunity and encouragement to work towards personal goals.”
After the birth of her first child, Kelly started thinking ahead about her career path and how it would fit with raising a family. A very supportive husband was a great reassurance, but if she wanted to be able to have meaningful time with her family, something would have to give. Part-time corporate accounting jobs at the time (and possibly even now) were extremely hard to come by, meaning that it was an all or nothing choice in order to stay in the corporate world. There was a possibility of job-sharing, but it would have meant finding someone who was at the same career level, looking for a part-time role at the same time and willing to share the hours to give an employer the required full-time hours coverage.
Kelly’s next best choice was to pursue her dream of going solo and start her own accountancy practice working from home. With a vision in mind for how she would like to operate, the types of clients who would be ideal to work for and how to approach them, Kelly started putting her plans in place. As the family breadwinner, starting her own practice was never going to be a stop-gap or a hobby business. “Matching or even working towards earning the same income as I had in corporate life was going to be tough, particularly as many new businesses don’t turn a profit for at least a couple of years. It was very scary giving up a fixed salary!”
After the arrival of her second child, Kelly was presented with an opportunity to leave the corporate world when her role and work location changed. “I put a lot of effort into starting up my practice, thinking through what I wanted to deliver as a service and how to package and price my business model,” says Kelly.
Given the differences between accounting for a large business compared to a small business, new skills were required. Management accounts for a corporate client typically involves tracking costs for business processes to help an organisation make production, operation and market investment decisions. While there is relevance in providing management accounts for smaller businesses, there were more specialised skills required for Kelly to go solo and approach SMEs. Kelly took the time in the lead up to the arrival of her second child to study further. An IAB course on tax rules and a diploma in personal and business tax helped bridge the gap between corporate and small business or individual accounting practices. The course also covered inheritance tax, a knowledge of which would stand Kelly in good stead for starting her own accounting practice.
“I quickly found that I had a lot to learn!” Initially, Kelly felt she couldn’t turn away any business for fear she would be missing out on a project that while not ideal, could potentially grow bigger. “Starting out, many business owners feel they should be everything to everyone so that there’s no bit of work you would turn down. With confidence and time, I learned that focussing on the work that I enjoy most, delivering it well to my best-suited clients was the most rewarding and beneficial way to work. From a marketing perspective, once you have a niche it’s easier for the right types of clients to find you. I knew of a competitor who said she specialised in doing the books for women who worked from home. Initially, I was astounded that she would be turning away so much potential business. How would she ever make ends meet with such a small target market? Later I could see she was thriving because she knew exactly who she wanted to work with, there were plenty of opportunities and her target market felt themselves to be a good match to her thanks to her clear branding and market position.” Accountancy is a very broad field and there are many different types of accountants, giving plenty of opportunity for creating a defined niche.
Choosing your clients well pays dividends – an accountant is a long-term business relationship and could last through a number of business ups and downs. An accountant can often be seen by a client to be the guru on all things financial, being asked questions on anything from basic accountancy, pricing, forecasting through to complex inheritance tax questions. Kelly says that being very clear on what services you will provide is important. “If you know that management accounting, forecasting and pricing is what you do best then stick to it. Landing a client who only wants to have their accounts done annually is not going to deliver a mutually beneficial and enjoyable working relationship. You will be over-delivering and undercharging, while the client won’t appreciate your ‘added value’ model at all. Not exactly the win-win scenario you would have had in mind!”
It took Kelly around 12 months to refine her business model and have the confidence to turn clients away. “I found software and systems that suited my way of running a business and got my clients to use those same systems too. We all work from the same software and I can make tweaks where necessary to report styles or specific business process analysis.”
The next challenge was expanding the business. “I left behind the pessimistic view I had of myself and was soon turning a profit,” says Kelly. It was a leap of faith to take on staff and have the confidence in the business to cover their wages and keep the cash flow going well. “Your profit graph is never a straight line upwards, it peaks and then sinks so you need enough cash to see you through. Taking on employees initially results in your profits going down until you have brought in enough new business to fill their time efficiently.”
For some business owners, it may be better to outsource extra work through freelancers. Both scenarios have their pros and cons says Kelly. “On the one hand using a freelancer may feel like you won’t have their commitment, but it’s actually the opposite. If you have no obligation to continue supplying them with work, each project they do for you is their latest showcase. Their reputation is on the line each time they take on new work and a freelancer will often have more commitment to a relationship with you as a result. They appreciate your flexibility and that is where the loyalty starts building from. I would never consider outsourcing to a cut-price outfit. When you’re selling your skills as a service, it’s all about the personal service you deliver which you have to stay true to.”
Kelly’s advice to those thinking of leaving a corporate accounting career to start on their own is this. “You must be able to talk to people on all levels. In a corporate career, you will have been presenting to senior managers and sales staff, not all of whom will understand technical accounting terms or what the implications of a strategy are. The same follows for working with small businesses. Some people won’t know or care about understanding the numbers, others want to find out more and know their key statistics inside out. Find a few different ways to explain the information you need to impart to them.”
Rosie started her career in audit for a local firm in Slough, Grant Thornton. A typical client was an owner-managed business with around 20 employees. Her clients were smaller owner-managed businesses and she worked with a team of auditors. “Auditing is very methodical and analytical which makes it a very good grounding for starting your own business. With my background being with clients who were owner-managed I felt comfortable offering my services to working mums. I had a rough idea of the problems faced by that size business,” says Rosie.
After the birth of her first son, Rosie returned to work part-time. By the time her second son was on the way, Rosie was thinking ahead to the juggling task that would face her in the future – trying to get two boys to school while she went to work at 8am. “I didn’t want to have my children raised by a childminder or be missing out on school sports days.” Rosie’s dad had been a founding partner at an accounting firm. When he left the firm and approached semi-retirement, he continued to do a few clients books. A perfect opportunity allowed Rosie joining in partnership with him. When her dad died in 2003, Rosie carried on the business. “When the kids were little I could do as little or as much as I wanted while staying focused on them. I worked part time hours to suit the children and it was very much a kitchen-table business. “I started with charging ‘mate’s rates’ but when you start that way it’s hard to leave the lower fees behind and graduate to earning more.”
Until the boys were at secondary school Rosie didn’t pursue new clients but kept up with any friends who offered her their business. Having been a treasurer of her local NCT, Rosie met many new parents who went on to start their own businesses. This proved a great source of new clients and recommendations between parents stood Rosie in good stead. “Once I had a few clients and a reasonable amount of experience of running my own business, I didn’t even consider going back to corporate when I was ready to work longer hours.” Rosie had kept up-to-date technically, with continued professional development (CPD) and studying. Having previously worked in auditing, an additional tax course extended her skills and provided a good refresher for her accounting knowledge.
“The hardest thing to learn about running my own business was that you have to do it all. You have to be the IT person, the debt collector, the marketer and you also need to realise you can’t offer to do it all by tomorrow! If I had to start again now I would say know what you’re good at and stick to that. Make sure you know your product and know your market before you start your business.
Once Rosie knew she wanted to grow she started doing some networking and marketing, winning new business through word-of-mouth and referrals. Rosie now works with two freelancers and has admin support part-time during the week. “I don’t want my own office, I love working from home,” says Rosie. “With accounting becoming more cloud-based, it gives us more opportunity to work remotely.” Both of Rosie’s freelancers are qualified accountants. The team do all their own bookkeeping in-house but Rosie does have strong relationships and strategic alliances with other bookkeepers. “The benefit of having freelancers is that I supply them with work, but they have their own networks too. The flexibility of freelancing works well for both of us, I can add and take away work as required. I don’t want to be doing appraisals or have the formality of employing staff.”
To find new work, Rosie tried various networking groups including Athena, Maidenhead Business Girls and Biscotti. “Recently a friend and I have started at a bi-monthly lunch club. Each of us invite five people to lunch. You just never know when opportunities will come into play! I have a friend who is an interior designer who says she hates networking and never goes. I invited her to my lunch meeting after she said ‘oh, I will never meet anybody who needs interior design at a networking meeting!’ The first person she spoke to at my lunch event offered her an opportunity of doing interior design for a new project! Some networking you will hate and some you will love – find what suits you. There is a huge choice for everyone. Networking is about relationships. Don’t forget that it’s a slow burn. People buy people so it’s a worthwhile investment.”
What things does Rosie dislike about running her own business? “Not closing the office door at night, not setting realistic expectations of when you’ll be available to your clients and not switching off when you go on holiday. I do however love the business admin side of running my own business.”
The most valuable experience Rosie feels she got from being employed was probably time management. “At Grant Thornton, I quickly learned that clients will always have deadlines. When you can plot out all the work you have to do and set it out according to your clients’ deadlines it’s a great way to plan your time.”
“My clients tell me that the thing they love most about working with me is that I’m very good at explaining in layman’s terms what they need to know. I had a very creative client who hated numbers. I ended up describing to her what I meant using a mind map! Another client printed off a spreadsheet, coloured in with highlighters and colour-coded, which perfectly suited the way he viewed his own industry work plans. I try to make it simple for my clients and don’t blind them with science. I love the fact that each client is different. Everyone keeps their records in a different way, even when you email them the same cash flow forecast template to work from. Each client is in business for different reasons. I enjoyed the breadth of clients I work with, from mechanics to wedding planners.”
On the subject of accountancy software, Rosie says: “There are many software packages available. With so many and constant development, I have had to learn about all of them to keep up with my clients. If I was starting again, I would focus my attention on one or two of them and ask my clients to use one or the other. Some of my bookkeeper contacts favour one software system and they insist their clients use that system, which is good in that you have a ready-to-go office system.”
“My advice for anyone starting a new accountancy practice is to have a business plan. Know where you want to be in three years’ time. Know why you’re doing the business you do. Set boundaries early on don’t work nights and weekends. Flexible hours are fine when the kids are little and when you’re starting a business, but not such a good fit when you’re established. Pricing is important, don’t think you have to do it cheaply or nobody will come to you. Know what your costs will be, for example insurance, training fees and membership fees.
Rosie’s longest serving clients have been with her for over 18 years. “It’s a relationship of trust”.
Starting your own accountancy practice
As you can see from Kelly and Rosie’s stories, it’s not all smooth sailing. Brixx works with start-up business owners from all sectors and we like to provide you with a good footing for starting out. We’ve developed our software to provide entrepreneurs with a visual way to see the different elements of their business, showing where improvements can be made and how their business could grow, all before they’ve booked their first client. These powerful insights into the future of a business we can provide help business owners see what steps need to take to make their dreams come true. The combination of intelligent forecasting and business planning tools gives our users the power to simulate a number of scenarios to demonstrate the impact of decisions on their businesses financial health.
Here are our tips for starting your own accounting practice.
What industry qualification standards will you need?
When you first start out as an accountant, you will have to complete exams to be qualified to practice.
– The Association of Accounting Technicians (AAT) is a minimum standard to practice accountancy. They provide flexible courses teaching practical finance and accounting.
– The Association of Chartered Certified Accountants (ACCA) qualifies you for a full range of accountancy services. They have courses from foundation level through to strategic professional exams. The ACCA is internationally recognized.
– The Institute of Chartered Accountants in England and Wales (ICAEW) is who you have to complete your chartered accountancy training through. It’s a highly-regarded qualification and globally recognised, covering study plus work experience.
– The Chartered Institute of Management Accountants (CIMA) is preferred by those going into business. They’re a membership organisation offering a number of qualifications and courses.
Will you need to belong to a professional association?
Accounting is a well-regulated field, as it should be. Anyone providing an accounting service should be registered with and monitored by a professional association. They will be providing you with up to date information on legislation, industry standard guidelines and new regulations which may affect you, for example, data protection laws. Belonging to a professional association and keeping up with new courses and continued professional development (CPD) will also keep your skills current and prove to your clients that you take your professionals standards seriously. Professional associations will also give you an opportunity for meeting other accountants, networking and industry events. Access to a legal helpline is another feature offered, worth its weight in gold for when you’re unsure of the implications of an action you’re considering.
What insurance will you need?
Mistakes can happen and if you’re offering advice on a how a business can start, grow, run and become profitable, you may be liable if things don’t work out according to plan. While there may only be a small chance that you’ll make a grave error, the financial repercussions for a client could be significant.
– Professional indemnity insurance is essential for any business owner. Discuss with a well-regarded insurance broker how much indemnity insurance cover would be appropriate for your circumstances and client base. Don’t forget to reassess this each year as your accounting business grows.
– If you have business premises, you should have public liability insurance which covers your business in the event that a member of the public is killed or injured because of your business.
– As soon as you start to grow your business and employ staff, you will need to have Employers’ Liability Insurance to cover your employees.
Services you can offer as an accountant
Think about what your niche service will be. Here are some of the services an accountancy firm may offer: bookkeeping, invoices, payroll, company formations, business growth, management accounts, pricing strategy, profit and loss statements, VAT registration and de-registration, tax, dividends, sole trader accounts and company tax returns.
How will you be different?
This is time for what we refer to as ‘blue sky thinking’ – take yourself back to when you first started your career and think about what bothered you about the business you were working for. What worked well and what didn’t? Did you feel the approach could have been better targeted or more interesting? It could be that you have thought about an unusual way of packaging the services you could offer. By targeting a specific type of business or business owner, you can differentiate what you offer from local competition and stand out from the rest. It only takes one impression made at the right time to the right person that can result in your perfect client match. You can specialise in a certain service or range of services, specific business types or sizes, a regional area or nationally and internationally. Do your research thoroughly so you have a good understanding of businesses in your area, local industries and what your competition offers.
Branding your business
A marketer can help you with a marketing strategy so that you start with an effective system for bringing in new business. They will also help you develop a suite of marketing materials and decide which channels are most effective for reaching your target market. Once your marketing plan is in place, a graphic designer can design good quality business cards for you. Spend a decent amount of money on your business cards – if this is what you’re leaving with new contacts, buy the best cards you can afford so that you leave a good impression. Test and measure all your marketing campaigns so you can build an idea of what works well for you. Make sure you always have an active marketing pipeline, it can sometimes take months for a new prospect to become a fully paid client.
Getting your first website
Get a website created before you go to market, the first thing prospective clients will want to see is what you’re about online. To look professional, you need to have a good, clear website showcasing your services and what type of business you’re looking for. Don’t do it yourself, it shows and can put potential clients off.
Go and visit as many local networking groups as you can. It’s a brilliant way to find out what is going on in your area, make key introductions and build up a support network. If you’re working alone, it can be an excellent way of socialising while learning about how others have overcome common start-up and business growth issues. Of course, the main point of joining a networking group is to be introduced to prospective clients. Think about what you want to say about your business for introductions, be clear and concise and make sure you follow up afterwards. Initially, you could be spending a lot of time meeting new people, it’s a worthwhile investment!
Terms and conditions
Prepare your contracts carefully and with the help of a good solicitor. Check with your professional body for legal compliance you have to cover in your client contracts. As an accountant, you will have the financial knowledge to work out a good pricing model!
Consider using a business coach to help you get started, you will learn from their experience. Some business coach franchises offer a group network in which you will learn lots of new business skills. It also gives you a ready-made network of self-employed co-workers who will understand what you’re going through and be supportive of your journey as an entrepreneur. By nature, business coaches are enthusiastic and motivational – they should be cheering you on to do your best and push your business ahead.
Think through who would be the most likely people to introduce new business to you. It can be strategically beneficial to get to know other local accountants who don’t do exactly what you do. Build the relationship so that you know, like and trust them and from there you’ll be able to refer business to each other. Independent financial advisors, insurance brokers, will writers, bookkeepers, solicitors and business coaches can all make for very good strategic partners. Why not partner with some of these to run a ‘new business’ workshop to introduce your services?
How will you find new business?
Here are some ideas for getting new business:
– LinkedIn to make connections with previous colleagues and clients as well as introducing yourself to prospective customers. Spend time getting your profile looking appealing to your target market. Get a high-quality headshot so that you look professional and approachable. This is not the time for the selfie you took at the company dinner last year, even if you were looking slick in black-tie attire!
– Twitter and Facebook are worth experimenting with to see if they will attract new customers for you. Don’t waste time on it if it’s not your forte or you’re not getting the right results.
– Paid advertising: consider your local newspaper, industry magazines, business journals and even radio advertising. When you first start out, it’s important to get your name out there so that you become familiar to your target market.
– Public relations: Is there a way you can get a news story about your business published? Think about the ways you are different or a personal project that makes you newsworthy. Listen to your local radio stations and see what types of features they have in their interviews and business programmes. If you have a good success with a business you are working with, see if you can get a case study published in a journal or website related to their industry.
– Leaflets: get a good quality leaflet designed and printed and take it around your local office business park. Make sure you note down the business names and follow up with a phone call. Be friendly and approachable, nobody likes being sold to, this approach should be about introducing yourself.
If you’re starting your own accounting practice, why not partner with Brixx? We can provide you with software which shows your clients strategic plans, map product forecasts and set budgets in a visual way to demonstrate the effects of different scenarios to clients who don’t understand numbers the way you do. Contact us by email or webchat in the bottom right-hand corner of the screen and we can show you how we can help support your successful accounting practice.
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