Why Start an Accounting Practice
How to Build an Accounting Practice
Accounting is a stable, growing industry. The US Bureau of Labor Statistics expects accountancy to grow at a rate of 16 percent until 2020. If you have made the decision to start your own accounting practice instead of being employed by an established firm, then growing your client base is essential for success. You need to establish customer satisfaction, loyalty and referrals. You must also ensure that you have the basics to guarantee success in the modern business world, such as a website, business plan and accounting software. It is important to remember that it is challenging to start a practice from nothing, so you will need extra motivation, funding and energy to carve a space for yourself in your community. Find out how to build an accounting practice.
Starting an Accounting Practice
Create a business plan.While you are in school or employed by an accounting firm, develop a financial, management and marketing plan for your business. Make sure you include at least 5 years of financial and other support, so that you will have time to grow your business.
- At this point, you should decide if you want to take on partners. If so, you will need to enter into a partnership and register it with your state. You should also do research about competition, pricing and services. If you have experience in a niche market, research where and how you can take advantage of this competitive edge.
Choose a name.Accounting firms should have simple names that identify their name and the services they provide, so that a potential client can easily find them.
Register your name with your Secretary of State or County Clerk, by filling out and submitting a "Doing Business As" (DBA) application.Submit other business licenses as required by your state or country.
Put up a website.Few businesses can survive in today's business world without a website. Make sure you have a professional look, contact information, a description of services and a scheduling program so that new clients can find you using a search engine and contact you.
Order stationary and business cards.Place your website, email, telephone number, address and title on a simple business card so that you can market yourself to people in the community.
Choose a type of accounting software.It is a good idea to choose a software, like Quickbooks, that is commonly used, so that you can help clients to use this software for more complicated bookkeeping. Train thoroughly on this software.
Take on your first clients.Begin by approaching friends or family members about doing their individual or business taxes for a reduced rate. Then, ask them to refer you to other clients. In order to afford to build your accounting practice infrastructure, you will need a base of clients.
- Many accountants start their own business as a part-time endeavor. If you work at a large niche accounting firm, you may be able to take certain accounting projects on after work. You will need to prepare yourself for the possibility that you will only have part-time employment for at least a year. It is reported that home-based accountants work approximately 10 hours less per week than accountants employed at firms.
Consider starting work from home while you have a small client base.The American Institute of CPAs reports that home-based accounting practices have a higher success rate than other home based businesses. Building a client base can take a few years, so wait until your client base is on the rise to choose a brick and mortar location.
Building your Client Base
Make customer satisfaction a priority.The following are good practices to adopt early on in your accounting practice.
- Have a personal meeting to discuss a new clients accounting needs. Ask open-ended questions about "How," "What" and "Why" your client wants to grow their business or save for the future. Ask them what services they are looking for, and suggest ways to save them money.
- Keep in touch by phone throughout the accounting process. Relationships can become impersonal if you communicate through secretaries or by email. Call the client to inform them of changes or issues and try to have a friendly conversation before diving into business.
- Offer to train your clients to improve their bookkeeping. You can offer this as a free service or discounted consultancy fee. If they are genuinely interested, and you think this will save them money or avoid audits, then suggest ways that you can help.
- Ask for referrals. Offer a small discount for any new client that comes by way of referral. Do this only after you feel comfortable that you have secured a regular client. It will cost less to keep your old clients than to go looking after new ones.
Hire competent employees as your client base starts to grow.Pay attention to an increase in business, and hire proficient accountants or assistants before the work load gets to be too much to handle. This means hiring people before the end of the calendar year, so that you have trained professionals for the busiest part of the tax season.
Choose a physical location carefully.Moving your growing practice from a home-base to a physical location is an excellent idea once you start to hire employees and meet with new clients. Scout a location that is in a business hub, has some space from competitors and has ample parking.
Network.It will be easier to find clients if you become part of the local business network. Go to mixers, professional development courses and even fun events in your town. Mingle with people you don't know and give out your business card to whomever you think would be a good contact.
Expand your marketing before and during tax season.If you are new to the accounting community, put more money into print advertising, radio advertising and online advertising just before the rush of tax filing. Create a clear, professional message that touts any new or special services you offer.
- You will need to have a larger marketing budget the first few years of your practice. Consider buying a client list of local businesses or home addresses and sending out a direct mail piece. Do not underprice yourself, but advertise any specials or niche services that you can offer.
- Home-based accountants must strive to attain an air of professionalism with everything they do. If you are meeting with large clients, rent a conference room, instead of meeting at home. Keep regular hours and make sure you are available during normal business hours.
- Waiting until you have a healthy client base before renting a location and hiring employees is a great way to keep costs down as you start a new business. If your overhead is low and you can handle the work load, you will save thousands of dollars. However, be sure not to wait too long to get help, because you don't want your customer satisfaction to fall.
Video: 6 Steps to Build Your Profitable Accounting Firm
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