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5 Things To Consider Before Starting An Accounting Business

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Should You Start An Accounting Business?

This is the first article/video in a series about how to start and grow an accounting business. In this first article/video. 
 
The purpose of this introductory article/video is to answer some questions that will help you figure out whether you really do want to set up an accounting business. If you’ve already decided that you definitely do want to set up an accounting firm and you can feel free to skip this article/video and go straight to the article/video about “how to start an accounting firm”.
 
Note: this article is part of the Series: The Ultimate Free Guide To Starting & Growing An Accounting Business. Remember to check out the other articles in the purple box below (on mobile) or on the right side on desktop.

The Ultimate Free Guide to Starting & Growing An Accounting Business & Earning $200K/year

Should I Start An Accounting Firm?

Before spending time and money, make sure you really want to do this. 

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  • 5 Things to consider before starting
  • The Theory of Pii [Passion, Income, Impact] 
How To Start An Accounting Firm

This is a summary and checklist of everything you need to do.

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  • Checklist for starting an accounting firm
Your Services

It’s to create and offer services that clients actually want. 

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  • How to research and develop the best services to offer your clients
  • Other revenue opportunities
Your Marketing

See the practical and ultra-effective marketing strategy I created specifically for growing an accounting business. Check out the article / video / podcast here.

If you want to develop your own marketing strategy, I have created a complete guide for accounting firms. Check out the article / video / podcast about:

Research

  • Customer Research
  • Competitor Research
  • Unique Selling Proposition

Branding

  • Branding
  • Domain name

Website, Apps & Tools

  • Website
  • Trust Factors
  • Apps & Tools

Promotion

  • Funnels
  • SEO
  • Social Media Strategy
  • Advertising
  • Email Marketing
Your Operations

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  • Legal
  • Funding
  • Budget & Projections

Theory Of Pii – For Accountants

I always start with the Theory of Pii. Pii stands for passion, income, and impact the question we want to ask is, does starting an accounting business meet all of these criteria for you? Is it something you’re passionate about? Will you be able to generate a sufficient income? Do you think you can have a positive impact? 
 
Passion: Why do you need to be passionate about it? Starting and growing a business is tough. If you’re not passionate about the work it will be almost impossible for you to overcome the inevitable challenges that come with growing a business. 
 
Income: When it comes to income, the obvious question is whether you really think that you’ll be able to generate enough income to meet your needs. You obviously need to consider how much demand there is for the accounting services you plan to offer, how much competition already exists, how you will differentiate yourself from your competitors and how much revenue you can generate from your clients. 
 
Impact: Why does impact matter? Well, we all want to feel like we’re doing something useful or maybe even important. We don’t like the idea of working on something that we think is frivolous or irrelevant or useless. Ask yourself this question: if you do a really good job for your clients, will it result in having a positive impact on your clients? Will you be solving an important problem for them? How important are you to them? What are the consequences for your client if you do a great job and what are the consequences if you do a terrible job? If the consequences of doing a great job are extremely positive and the consequences of doing a terrible job are extremely negative for your client then you are a very important person in the life of your client. And that’s what you want to be. The more important you are the more money you can charge. And justify it. And the more your clients will love you.
 
It’s critical to get all of this right. If you don’t get this right, I can almost guarantee that you will fail. If you want to work through this process in more detail to make sure that you do get it right, see my article/video about the Theory Of Pii. 
Note: You can set up a free referral program to grow your Accounting Business on 'I Imagine'. Check it out now. Or complete the form below to get more info. This article continues below.

Possible Accounting Services

If you want to start an accounting business, these are the services that you could provide: small business accounting, bookkeeping, tax planning, tax preparation, management accounting, estate planning, audits and reviews, CFO services.
 
The obvious questions to ask here are: Which one or more of the services will you offer? Do you have the expertise to be able to offer them? And, on a more personal level, do you want to spend your day to day life working on offering the services? Do you really want to do this? This is the time to answer these basic questions.
 

Certifications

Of course, anybody can provide accounting services but the peak accounting bodies in most countries have created certifications that reflect advanced levels of skills and expertise. The most common example is certified practicing accountant but there’s also a lot of variations within countries and between countries so this is something that you’re going to have to research and your own country or region. The questions you need to answer here are:
  • Do you need the certification to be allowed to practice?
  • Do you need the certification to be able to compete?
  • Do you have the skills and knowledge to be able to obtain the certification if you don’t have it? 

 

Upfront Costs

If you’re going to set up a one-person accounting business it’s perfectly okay to work from home and use a co-working space if you need to meet people face-to-face. In this case, your upfront expenses should be limited to your membership to the co-working space, a computer, the software you’ll be using for your accounting services and a marketing budget.
 
If you’re planning on setting up a business with multiple employees, your upfront costs will obviously be higher. I’m not going to get into those costs in this introductory video. I’ve created an article/video that walks you through a more detailed budget as part of this series.

Pros & Cons Of An Accounting Business

 
Pros:
  • Every business needs accountants for multiple reasons so the demand for services is high
  • If you do a good job for your clients, they will usually become repeat customers
  • As I mentioned earlier, start-up costs can be very low so the financial risk of starting an accounting firm is low
 
Cons
  • One of the biggest challenges of any services business is finding a steady flow of customers. I mentioned earlier that, if you do a good job for your clients, they should become repeat customers, but this is not always the case. If you offer a service like small business accounting or tax preparation, you’re offering a service that your customers will need annually so, if you do a good job, you should accumulate many repeat customers over time. If, on the other hand, you offer services like interim CFO, these are services that are not required annually and may only be required once in the entire life of a business. In this case, you constantly have to find new clients. You need to keep this critical concept in mind when you’re making a decision about which services you want to offer.
  • You will have an enormous amount of competition but the good news is that it’s easy to differentiate yourself if you avoid offering commodity services. For example, if you offer simple bookkeeping services you will have an enormous amount of competition and your customers will be very sensitive to price and when you combine these two factors it will be difficult for your business to grow and, even if you succeed in growing your business, your business will not be very valuable if you decide to sell it. On the other hand, if you offer a service where you help businesses to structure their supply chain in a way that maximizes cash flow you’ll be offering a service that is dependent on your advanced skills and knowledge as opposed to offering a service like bookkeeping that can be offered by anybody.

Note: We have done a lot of research and created The Best Strategy + Website + Marketing tools for accounting businesses. Rapid launch. Low cost. All designed to work together. Check it out now. Or complete the form below to get more info. This article continues below.

Note: this article is part of the Series: The Ultimate Free Guide To Starting & Growing An Accounting Business. Remember to check out the other articles in the purple box below (on mobile) or on the right side on desktop.

How To Start An Accounting Firm:

The Ultimate Free Guide To Earning $200,000 / Year

Rapid launch. Low startup costs. High growth strategies.

Should You Start An Accounting Firm?

Check out the article / video / podcast about:

How To Start An Accounting Firm

Check out the article / video / podcast about:

Your Marketing

See the practical and ultra-effective marketing strategy I created specifically for growing an accounting business. Check out the article / video / podcast here.

If you want to develop your own marketing strategy, I have created a complete guide for accounting firms. Check out the article / video / podcast about:

Strategy

Research

Branding

Website, Apps & Tools

Promotion

Analytics

Your Operations

Check out the article / video / podcast about: