So, you’ve decided to open your own accounting firm. Whether you’ve worked as an accountant in the past, or are just starting out, there are probably a few things you haven’t considered about starting your own business. You might be a guru when it comes to payroll or tax preparation, but launching your own firm will take more than experience and chops. Read through this guide before embarking on your entrepreneurial journey to make sure you know what you’re getting into before diving in head first.
What will you need?
Build a thorough checklist of everything you’ll need before opening your own accounting firm. Here are just a few considerations:
- Funding – How will you finance the operation of a small business? A general rule of thumb stipulates the need for an entire year’s worth of funds before opening your new firm. When creating your budget, leave out no minor detail. Factor in the costs of keeping the lights on, as well as your own personal living expenses. As your own boss, you’ll be responsible for supplying your own income.
- Licensing – You’ll need a business license before you can offer public accounting services. Every accounting firm in the United States must register with the board of accountancy in the state where its professionals practice. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. While the exam is the same no matter where it’s taken, every state has its own set of education and experience requirements that individuals must meet.
- Space – From where will you operate your new accounting firm? Are you going to run your new business from home, or will you make consulting visits? Do you plan to open an office space, and if so, what’s the going rental rate for commercial property in your area? Will your office be within a professional building, near people you hope to target, or near a college campus in an effort to attract students? Be very mindful about space when determining where to run your accounting business.
- Staff – If you intend to open an office, you’re more than likely going to need to hire staff. Remember that you’re going to be so busy opening your business that you’ll have little time to actually perform any accounting services. If you’re hiring staff, will your team be composed exclusively of CPAs, or will you include broader skill sets? Once you decide who you need to hire, determine what you plan on offering your employees in terms of salary and benefits.
- Support – You’ll need more than the support of staff in order to open a new business. Make sure your family is also on board with your business decision before you make a commitment. Although the journey can be exciting, it’s incredibly stressful and time-extensive.
How will you function?
Before you can open for business, you need to have a precise map as to how your accounting firm will operate. Be sure to create a written business plan that includes the following:
- Niche market – It’s essential for burgeoning accounting firms to establish their niche market and who they’re trying to cater to. Determine the goal of your business and who you seek to cater towards.
- List of services – After you identify your unique niche market, ask yourself which services that demographic is in need of. It might be Level 1 services, such as simple tax preparation, or Level 2/3 services like budgeting and cash flow advice.
- Marketing strategy – If you have your services in place, you will need effective marketing to get your firm’s name out there. Will you hire the assistance of an advertisement agency, or will you employ guerilla marketing tactics?
- Client pipeline – Determine the source of your client pipeline. Relying solely on marketing isn’t a sound idea. Hire as many people as possible with an established network of clients and use them for referrals and testimonials to boost your new business.
- Equipment and software. Finally, make sure you have the right systems in place for smooth operating. In addition to modern office equipment, set yourself up for success using Intuit Tax Online and other software technologies that will streamline your efficiency and accuracy.
Although the checklists presented here are not the definitive resources needed for how to open your own accounting firm, these questions provide a solid springboard to dive off of and explore before making your final decision.