If you are a “numbers nerd” and tracking every dollar and cent and keeping orderly financial records is your first language, then you may have what it takes to start an accounting business.
Honesty, integrity and trustworthiness are must haves when it comes to taking charge of other people’s books, as well as your own. (Remember, you will have to do the books for your own firm as well as your clients!) Accuracy, organization and attention to detail will also build your credibility and grow your business as satisfied clients learn to trust your work and spread the word.
It also helps if you have a grasp on solid financial principles and practices to dispense sound advice to your clients. If you have the work ethic and capital backing to stick with it through the rough storms of any business startup, owning your own accounting firm just might be the right career move.
[photo credit: Ken Teegardin]
How Big Is The Accounting Firm Industry?
At least four million people use accounting services every year and growing, according to Statista. Over two million accountants and clerks generated about $137 million in revenue for 2013 with growth expected to reach $160 billion by 2018. When the economy thrives, so does the accounting industry.
Why Starting An Accounting Firm Now Is A Good Idea
The Bureau of Labor Statistics predicts that the accounting industry will grow by as much as 11 percent between 2014 and 2024, exceeding the average growth rate for all combined occupations. The better the economy, the more people will turn to accounting professionals to oversee their financial records.
Accounting Business Facts
Here are some facts and figures about the accounting business you should consider:
Accounting firm startup costs
According to Hugh Duffy, a Marketing Coach for Accountants specializing in CPA Firm Practice Development, startup costs for an accounting firm depends on your revenue goal, your plan for delivering your services to your target market and where your practice is located geographically. He estimates a $50K up front investment will generate $150K in business. The cost of obtaining and maintaining your office will also be a factor and whether you rent space or work from home.
How much do accountants make?
$42,873 – $106,199 with an average of $47,936, according to Payscale.com. If you hire extra help, the Bureau of Labor Statistics reports that clerks make an average of $36,430 per year or $17.51 per hour. They add that you can expect to pay additional accountants between $19 and $56 per hour or $41K to $116K per year.
How much do accounting firms charge?
It depends on the service(s) you provide to each client. CostHelper.com reports that charges generally run from $150 to $400 per hour for the services of a trained professional, less for routine work that can be completed by a clerk. Bookkeeping services run from $30 to $50 per hour. Tax preparation averages about $100 per return. Some accounting firms offer services on retainer for a flat monthly fee.
How do accountants find customers?
Mr. Duffy explains that referrals can be a valuable source of business, most come from existing clients so as a startup business, you cannot rely on that as your main source of clientele right out of the gate. You can encourage friends and family to spread the word and recommend your services to people they know in need of an accountant. Other marketing techniques including listing yourself in online business directories, taking out an ad in the Yellow Pages, passing out fliers and networking at community events, hosting a booth at community connect events and getting your name out there through print, radio and TV ads. A professional and informative website is a must as is promoting your page in the search engines through online ad tools and keyword SEO strategies. Hosting a blog through your website that gives sound financial advice and promoting it accordingly can also make your name come to mind when someone is in need of financial services. Networking through social media channels can also connect you with potential clients.
What skills are required?
The obvious ones are math, bookkeeping and record keeping, tax preparation, financial advisor, computer-savvy, scheduling and organization, logistics. It is important to remember that you will also be dealing with human beings as you prepare and supervise their financial records, so people smarts are also a big plus for meeting with clients and gaining and maintaining their trust in your services. You will need to be able to communicate with them clearly and effectively about their financial goals and clearly explain financial scenarios and honest solutions.
What do I need to operate an accounting firm?
Business license, professional licensure, SEC registration, insurance and tax setup, telephone, office furniture, and copiers, fax, file cabinets, tax and accounting software, computer, printer, business cards. As your business grows, you may need to hire part-time help or partners as well.
Accounting Business Ideas
Have a well-defined professional image
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[photo credit: Roger Braunstein]
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[photo credit: U.S. Department of Agriculture]
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Struggling with what to name your accounting firm, here are a few ideas:
|Account Above||Jones & Smith, LLC|
|In the Black||PledgeMark|
|AccuCountable||Above All Accounting|
|Number Crunchers||Truth in Accounting|
|The Math Guys||Balance Accounting|
|Integra Accounting||Callahan & Associates, LLP|
|Financial Trust||Trustmark Accounting|