- Legal structure and compliance activities
- The premises of the practice
- Researching your target market
- Setting your fees
- Attracting new clients
- Cross selling
- Employing staff
- Accounting software and technology
- Funding
- Buying an accountancy practice for sale
- Buying an accounting franchise
Many people aspire to run their own accounting practice, be their own boss, take a good income and build an asset for their future. To realise this goal, there is a lot to consider and get right at the outset and on an ongoing basis.
TaxAssist Accountants has helped hundreds of its franchisees build and sell practices for 28 years. We know it's vital to research all aspects of creating a new business and the best advice comes from those with practice experience, and we'd like to share some of this experience with you in this article.
So, if you’re thinking of joining the ranks of the self-employed, here are our top considerations to get off to the best possible start.
What legal structure should I choose for my accountancy practice?
Having decided to start your own accounting practice, you need to consider what your legal structure will be – will you set up as a There is a long list of compliance activities to consider and undertake before launching and companies to inform of your decision to start trading, including your accounting institute (do you have a practicing certificate? You need one if you wish to remain a member of your institute and hold yourself out in public practice).
Where should I run my accountancy practice from?
You need to give some thought to the types of clients you want to work with and what services you will provide them.
Running your own practice is about profitability, not top line, so it may be better to keep things simple and focus on smaller clients with more routine compliance and low-level advisory needs. Yes, fee levels are lower, but it’s easier to service and support these types of clients and they can often be more profitable in the long run. Operating a business with hundreds of small clients, rather than just a few larger ones, means if they stop using your services the impact on your finances will be less.
How much does an accountant charge?
Whether you decide to offer fixed fees or follow a model based on time spent on the work, you always need to have profit in mind.
You need to undertake a competitor analysis, so you know what the going rate for work is in your area. Will you charge up front, or retrospectively, will you encourage your clients to pay by direct debit?
How do I attract news clients to my accounting practice?
Probably the biggest single concern for accountancy practitioners is the fear of sitting behind the desk, wondering where the next client will come from.
Every practice, existing and new, should have a marketing plan to help focus on winning new clients. This should cover your ambition, your Unique Selling Point (USP), an analysis of your market and competition, any threats, strengths and weaknesses, your premises (your literal shop window), your website and its content, digital marketing, traditional targeting, referral opportunities, networking and any other opportunities that may be available in the market.
You need to allocate a realistic amount of time and money to marketing you and your practice, to maintain that stream of new clients. You cannot rely on referrals alone to build your business.
Can my practice offer more than accountancy services?
Cross-selling to existing clients is also hugely important to maximise the potential of your accounting firm. Because you will have a thorough knowledge and understanding of your clients’ businesses and personal situation, you are in an ideal position to be able to offer them a range of suitable additional services and products. A good example of this is the TaxAssist Financial Services complementary business which was launched to support clients of TaxAssist Accountants. This allows each TaxAssist Accountant the opportunity to offer more services to their clients by introducing them to a qualified financial adviser and earn an introducers fee.
Clients will find this beneficial, which will in turn help to increase referrals, loyalty and retention. You don’t want to lose clients because they decide to go elsewhere for a particular service – you want to be the one-stop-shop for your clients’ needs.
When do I need to employ more staff at my practice?
When you’re looking at structuring your practice, think about the areas to which you are most suited, and the gaps you may need to fill over time which will include tax, accounting, bookkeeping, admin and marketing.
Initially it may just be you working alone, but It’s likely that you will need help fairly quicky, and taking on staff or outsourcing will enable you to scale up your practice. You need to ensure you do not become a bottle neck as your practice grows. Free up your time to work ‘on’ the business not ‘in’ it, because ultimately your time should be spent growing your business by attracting new clients, while you build a trusted team who can manage client relationships and workload for you.
You need to consider how you will train and keep your staff up to date and what you need to do to make sure you retain your good people as they are likely to be approached with offers. Give some thought to working conditions, benefits, bonus arrangements and other incentives.
Do I need to use online accounting software to run my practice?
We work in a world that is increasingly influenced by new technology: online accounting software, tax digitalisation automation and AI. The sector has changed fundamentally over the last 10 years and we have to expect this pace of change to increase.
You need to consider where your practice fits into this ever-changing world. How will you incorporate technology and software into your practice? What services will this allow you to deliver? Many will see these changes as a threat. The successful practices of the future will be those that embrace change and see the opportunities that technology creates.
Where can I find funding to start a practice?
A common barrier to starting up and growing your practice is funding. A new practice will need to fund any setup costs, but it will also need to consider longer term working capital needs.
Debtors and work in progress need to be funded, along with any early-stage losses (and new practices will almost certainly make losses in the first 12 to 24 months). You also need to remember that you will need to fund your drawings/salary until cashflow supports this.
These factors can mean that new practices need a fairly significant amount of funding in early stages, so make sure you start building relationships with banks/other external funders.
Also bear in mind that you will need to have a detailed business plan in place to support any funding application which lays out your costs and financial forecasts.
Should I buy an established accountancy practice for sale or a block of clients?
A good way to expand a practice or hit the ground running, is by purchasing an established accountancy practice for sale or by investing in a block of fees from a retiring accountant or one leaving the market.
When you purchase an accountancy practice as a going concern, you are likely to inherit a well- established business, with premises, clients, staff and software already in place giving you a good platform on which to expand as well as an income stream from day one.
If you decide to purchase either a practice or just the clients, make sure you have a good understanding of what you’re buying. Analyse the business accounts and the selling price/structure. It is strongly advisable to take legal advice so you are comfortable with the payment schedules and caveats that will likely exist in any sale agreement.
Is a franchise a good idea to start an accountancy business?
The alternative to going into practice entirely by yourself is to join an accounting franchise, buy an established accountancy practice or convert your existing practice over to a franchise.
A franchise is a self-employment business opportunity which provides you with a proven, successful business concept, an established brand name, peer support from other franchisees, plus the benefit of a team of support staff covering all aspects of growing your practice from training to technical and marketing support and guidance.
Investing in a franchise can offer a fast-track way to working for yourself, and it’s not hard to see why franchises tend to have a much better success rate than other business start-ups.
It is no guarantee of success and it’s a very personal and individual choice, but if you’re an ambitious accountant or experienced finance professional, it’s certainly well worth considering taking on a franchise, to help you achieve the success you aspire to in a structured and supportive way.
