According to Statista, accounting, tax preparation, and payroll service firms in the United States generated $156 billion in 2018. Starting your own accounting firm is like starting any other small business — while there are accounting-specific requirements, focusing on the goals, market, and purpose of your business is integral to your success.
If you’re interested in being your own boss and earning a lucrative income as an accountant, here’s how to start an accounting firm from the comfort of your sofa.
Determine your startup costs.
If you’re thinking about running your business from home, determining your startup costs can help you properly budget and prepare to open your accounting firm. Startup costs can range anywhere from $2,500 to $25,000 depending on your location and goals. It’s important to keep in mind that, in addition to a physical (or virtual) space, business owners must install the equipment and software required to help their firm run efficiently.
After finding the right accounting solution, accounting firms must focus on day-to-day operations. To promote productivity while keeping data organized, it’s important to properly organize and file all documents. With tax return folders and envelopes compatible with the most popular tax preparation software programs, the MinesPress tax folder collection can help small business owners file tax returns while maintaining a professional image.
Develop a pricing structure.
From consulting and advertising services to payroll and bookkeeping, start by deciding what accounting services you’ll offer. If you’re not sure where to start, research accounting services offered by bigger firms and conduct market research to determine what trends might be lucrative for smaller, independent businesses to follow. Keep in mind that offering a diverse array of services can increase your client base and give you an edge over the competition.
To develop a pricing structure, choose between an hourly fee structure and a fixed fee model. In recent years, an increasing number of accounting firms are moving away from hourly fee structures to provide a better value for clients. An hourly fee structure still might be your best option if you’re early in your career or interested in gauging profitability in a newer business.
Incorporate your business.
Choosing the best business structure for your accounting firm is integral to the success of your business and can help minimize your tax burden and legal risks. Although the circumstances of your incorporation will vary depending on your approach, consider incorporating your business as soon as possible to obtain legal protection. Popular options for account firms include partnerships, S-Corps, and C-Corps.
If you’re planning to start a solo firm, an S-Corp, which allows you to pay yourself as an employee, is an appropriate option. If you’re going to work with other partners, a partnership provides a greater degree of financial flexibility.
Regardless of what structure you choose, it’s important to remember that your business structure may evolve as your firm grows. Over time, new partners may enter your business, and you may choose to add additional shareholders or reorganize as a partnership.
Grow your client base.
A strong work ethic and competitive pricing can attract clients, but investing in marketing will help you build a loyal customer base and raise awareness. Utilizing free and affordable online marketing techniques, such as search engine optimization (SEO), can attract organic traffic to your website and help you reach a wider demographic. Additionally, consider looking for ways to partner with other companies and firms, as well as local networking opportunities, to establish your presence within the community.
Encouraging client engagement and offering exceptional customer service can also help you reach more clients. For example, with call forwarding you’ll be able to take your business anywhere. Whether you’re home, on the road, or at the office, call forwarding redirects incoming calls from one phone number to another phone number. Unlike traditional call-forwarding software, TalkRoute’s conditional call forwarding offers advanced routing features, giving business owners the opportunity to answer phone calls whenever and wherever they want.
All in all, if you’re willing to devote the time and effort, it’s possible to earn a lucrative income running an accounting firm from the comfort of your own sofa.