Starting an accounting practice can be overwhelming, but it doesn’t have to be if you take things one step at a time. When you take your end goal and break it down into tasks, you’ll find that it becomes more manageable to attain. But you’re here because you may not know everything you need to start a successful accounting practice.
As you read, make a checklist to ensure you – as well as possible business partners – have everything covered. If you don’t have a business partner, consider finding someone reliable you can delegate administrative tasks to, so you focus on effectively getting your practice off the ground. After all, if you want your firm to grow, you’re going to need help.
A Business Plan
Writing a business plan is necessary to pitch your practice to investors for financial support. They want to see that you know what you’re doing and have a clear path to success. Otherwise, they won’t expect a return on their investment.
Additionally, have a business plan keeps everyone on the same page regarding management, ownership, profit allocation, and services offered. Finally, a business plan will help you avoid potential conflicts that could cause legal issues between shareholders and put your practice at risk.
Once you have your business plan, you need to turn your firm into a legal entity. There are several options, such as an LLC or S-corp – largely depending on the size. Next, you’ll head over to the IRS website and obtain an Employer Identification Number (EIN). This allows you to hire employees, open a business bank account, and file taxes on behalf of your business.
It acts as a social security number for your firm and helps you separate personal expenses from business expenses. Of course, you’ll want to keep everything separate from this point on. In the event of a lawsuit, the “corporate veil” will protect your personal assets as long as you don’t mingle them with your business dealings.
You’ll need a space to work without distractions. If you can’t afford to buy or lease office space, you can always look into shared office settings. However, working from home is also an option, and it has become more mainstream since the start of the coronavirus pandemic. Create a space dedicated to work, separate from the rest of your home, so you can step away without feeling like you’re at work all the time.
You may think you can do it all on your own, and you may be able to in the beginning. However, as your client base grows, you’re going to need help – especially with clerical work. Even though you may not want to spend money on employees or outsourcing, you’ll need them if you’re going to earn more down the line. Being able to delegate tasks to others will not only improve your work-life balance, but it’ll allow your firm to expand to its fullest potential.
Accounting Workflow Software
Accounting practice management software is critical for a growing practice, especially if you’re working remotely. With the right product, you can manage your entire firm in one spot. Your workflow software should include:
- Secure file storage;
- Accounting software;
- Client reporting;
- Project management;
- Task designation;
- Company-wide communication channels.
These points are critical to keeping your company running smoothly and meeting deadlines. Without them, you risk developing a reputation for disorganization and not being secure. Plus, people trust you with their money, and not having the proper software implemented could be detrimental to their financial security. Not to mention, you’re putting your company at risk for non-compliance to industry security standards.
Sales and Marketing Solutions
Many skeptics drone on about how most businesses fail within the first year, so you might as well give up before you start. However, these are the same people who most likely don’t have the proper sales or marketing skills to scale a business. Putting yourself out there may seem nerve-wracking, but the more you pitch your services in the beginning, the faster you’ll land your first client.
If you feel like your sales skills are not up to par, you could consider hiring a salesperson to pitch your services for you. Additionally, you can outsource marketing to a professional firm to increase your visibility in the business world and attract your ideal clients.
If you’re overwhelmed by everything needed to start an accounting practice, that’s a good thing. It means you’re aware of the hard work and dedication it takes to succeed. However, don’t let fear overcome you as you go through the process. You have to live outside of your comfort zone to reach your goals. Plus, you can always acquire the help of a business partner or employees who can take some of the workloads off your shoulders. Just make sure you have suitable systems to increase workflow and ensure everyone is on the same page.