Have you reached that stage when you want to start an accountancy practice, to do your own thing and be your own boss?
Deciding to start your own business is a momentous decision, one of those life-changing moments that brings its own rewards and challenges. But it’s one that should never be taken lightly. And as a professional, you will have to start and run your business in an exemplary manner.
The backdrop is certainly favourable. It is the age of the small and medium-sized enterprise (SME). The UK sees roughly 80 new businesses start every hour (yes, every hour). And while all these will not immediately require accountancy services, a fair proportion will at some stage in their early lives.
What’s more, these companies will not turn to the huge accountancy firms that dominate the upper-end of the sector.
No, the SME community requires the services of cost effective and often specialist accountants who understand their particular needs and can be there to help grow their business.
Supply and demand
So the demand is there. But, you might say, aren’t there already enough accountants and bookkeepers out there to satisfy that demand?
What you need to bare in mind of course is that accountancy, although a profession, is also a service industry. It offers far more than just bookkeeping exercises. A new person, or new firm, can offer a particular level of service that matches the needs of a client.
Thus, if you value service as highly as it should be, then your offering will be unique. From that point of view, it could be far less competitive than you might think.
Offering support to businesses
Many SMEs require more than just traditional bookkeeping services. They require advice on how to manage their business at a crucial stage, one that sees them past the point of great idea and formation, to growth.
This is why the relationship between company owner and accountant is so vitally important. It is often to do more with building a solid working relationship than handing over the books once a year.
Think about how much a company owner might rely on your help, such as building the case for a loan, preparing the argument for taking on more staff after a good trading period, or the recommendation of another professional for other services. Your help and advice will be called upon at regular times.
So, let’s assume that you are at that point of wanting to set up your own practice.
You are confident you can work for yourself, or with a few others, that you are the type of person who isn’t worried about not necessarily having the benefits of belonging to an established firm (regular salary, holiday allowance, bonuses, existing infrastructure, management support) and that you are ready to be your own boss.
The mechanics of setting up your own business is similar to setting up any other business and you must also be sure of your profession’s requirements if you want to practice as an accountant.
Later down the line comes to need to have the right accounting software set up, market your business, find clients and provide your services to them.
However, the first step is to ensure you know how to establish your business and second step, that you are qualified to do so.
Consider your business model before you start an accountancy practice
Once you’ve got the basics sorted out, you need to think about your business model. And with this, we got some great advice from two accountants.
First up is Paul Donno, the managing director of 1 Accounts. He says: “I set up my online practice on 23 December 2013 and I had a very clear and defined business model that only accepted clients who would use online accounting software.
“Over the years, any deviation from our business model has in most cases caused us issues especially around getting paid and from experience we now only accept direct debit payments. From an admin point of view, this eliminates the need for credit control and fee disputes as they are agreed upfront.”
He adds: “In the first couple of years, we did get our pricing wrong and believe that it is in the appropriate place now to service our clients and grow. Eighteen months ago, there were three of us and now we are at eight people and still growing, but we have stuck to our business model.”
Onboarding and business coaching
The ability to get new business was a major consideration for Paul. He says: “Onboarding new clients has become an issue as it is very time consuming. We have started using [accounting automation solution] Practice Ignition for this and it is working really well.”
And do not be afraid to use all the resources at your disposal. Paul says: “If you are a member of a regulatory body, my advice is to speak to them look at the resources on their websites and apply them to your business.
“Engagement letter guidelines, money laundering guidelines, etc, are all detailed. Take time to review these and understand what you need to do to be compliant. Also look at the guidelines on professional ethics and keep a high standard across your business.”
For Paul, nothing was left to chance. He says: “When I started the business, I also employed the services of a business coach and he helped us to understand our values as a business and owners of our business, together with identifying areas we needed to concentrate on especially as we have high growth plans. We may be accountants but don’t be afraid to take outside help and second opinions.”
Blending flexibility with great client service
Let’s turn to Sudipa Moore, or Sid as she is known. She is the owner of growing South Manchester based practice, Moore Accountancy, which she established in early 2010. She trained as a Chartered Accountant in a medium-sized central London practice during the 1990s before moving into various industry sectors.
Sid started her practice in 2010 because: “We wanted a balance between being a working parent and doing something we enjoy. Running our own practice gives us flexibility in our working hours while providing a great service to small businesses.”
And, as with Paul, she advises you give some thought to getting new clients. Sid says: “Realise the time it takes to develop your client base. Our first year, we only had five clients and a tax loss to carry forward. We now have a team of four part-timers servicing a decent number of clients.
“Unless you are buying fees or a franchise model, it takes time to create your systems. Find clients, go networking and refresh yourself on the technical aspects you may not have touched for a while.”
When she started out, Sid was not slow is getting help. She says: “We are ICAEW [Institute of Chartered Accountants in England and Wales] members, so there are fantastic guides on how to set up in practice and things to think about in respect to marketing, systems, processes and paperwork.”
Good advice from two people who have started their own practices and flourished. Now all that’s left for you to do is start an accountancy practice – when you are ready, of course. And good luck.