Good accounting software, a few clients, high-speed internet and a passion for being your own boss…what else does it take to start your own bookkeeping business?
As with every small business startup, it’s important to do some research, and take care of the basics before you actually open for business. If you start your business on the right foot, you won’t stumble when you’ve grown and had so many clients you need to hire help.
Increasing Your Chances for Business Success
- Get training or real-world experience. Working at an accounting firm or bookkeeping business can give you some foundational knowledge about client expectations, and how to gain a competitive edge. While bookkeepers aren’t required to have special certifications, it will be easier to sign clients if you can show you’ve trained/studied at college (you can take courses at a community college). You can get certified by the American Institute of Professional Bookkeepers (AIPB).
- Be realistic. According to the Bureau of Labor Statistics, in 2016, the median average wage for bookkeepers was $38,390 per year, about $18.46 per hour. This stat mostly counts bookkeeping employees, but keep in mind, you’re going to have to find a number of clients in order to make good money.
- Have some clients lined up before you start. This is the perfect type of business to start while holding on to your day job. That will help you gain experience, find clients and grow to a size that can support you going full-time. Know how you’re going to pay the bills.
- Are you prepared for those inevitable “rainy days?” Even if you launch with clients, you may hit some rough patches a few months in, so make sure you have adequate savings to carry you through until you get more clients.
- Join a bookkeeping association or group. The AIPB offers bookkeepers a lot of information and support. Plus, you’ll be able to network with your peers, which can help you find new business and solve any business problems.
- Pick a specialty. Specializing in a specific field can give you a competitive edge, and earn you a reputation as an industry bookkeeping expert. Specializing also saves you time researching new industries every time you get a new client.
Your Bookkeeping Business Checklist
- Choose your business form. Decide whether you will register your business as a sole proprietor, corporation, limited liability company (LLC), or other form of business entity. There are tax differences among the various forms of business, so you need to do what makes the most sense for your situation. For more information or to get help choosing your business structure, check CorpNet.
- Choose a business name. If you choose to use your name as your business name, make sure to include some indication of what you do; for example, “Joe Smith Bookkeeping ” It’s not generally a good idea to name your business after yourself, if you have the future intention to sell it. If you have a more creative business name in mind, make sure no one else is using it. Search the web, do a trademark search, and if the name is up for grabs, register it in your state, apply for a trademark and acquire the domain name. Visit your state’s Secretary of State website for more information on these steps.
- Write your business plan. Parts of the business plan include:
- Executive Summary
- Company Description
- Product or Service
- Market Analysis
- Strategy and Implementation
- Web Plan Summary
- Management Team
- Financial Analysis
Marketing Strategy and Execution
- Traditional marketing. Business owners like to hire a bookkeeping service they know they can trust, so referrals and word-of-mouth are going to be your best friend. Referral-based businesses such as bookkeeping businesses must be extremely customer-service oriented and friendly. People with bookkeeping questions want fast responses, so emphasize that in your marketing efforts. Networking is important in this field—be sure to attend local events and raise your visibility. A good way to get known in your community is by offering your services as a speaker. Whether you’re talking about new tax legislation or better methods of bookkeeping, being seen as an expert can help you land new business.
- Online marketing. Buying banner ads is not really going to get you the clients you’re seeking, but using email marketing, social media, and local search directories can be the bread and butter of finding new clients for your business. Think about starting a weekly (or bi-monthly newsletter featuring accounting or tax tips. Get local bloggers to write about your newsletter or offer to write guest columns on media websites or business blogs. Finally, remember to check Yelp reviews and answer any questions or complaints immediately.
- Build a website. You don’t need to create a fancy site, but you need a professional-looking one. And make sure it’s optimized for mobile viewing.
Operations and Management
- Setting up your office. Many bookkeeping business owners work out of their homes. Check your city’s zoning ordinances to see if you are allowed to have clients visit your home or park on your street. If you’re leasing office space, make sure the building is wired for all your internet and communications needs. Don’t overspend on fancy furniture, but if you have clients coming to see you, make sure your office is professional. Don’t skimp on technology—but the best hardware and software programs you can afford.
- Insurance. In addition to securing health insurance for yourself (or any employees you may need to hire), you need to research the types of business insurance you should have. Bookkeepers should have specific kinds of business insurance, especially:
- Professional Liability (Errors & Omissions). A bookkeeping mistake can cause significant costly complications for your client, which may lead to a lawsuit. If this happens, legal costs can increase exponentially. Bookkeeping or accounting malpractice risk is a very important reason why every bookkeeper needs professional liability coverage.
- General If a third-party should claim that you caused them physical injury or damaged their property, you could be facing an expensive litigation process. General liability insurance can help you manage these claims by paying for your legal defense, including reimbursement fees and losses.
- Check with an insurance agent and your state insurance office to see if any other type of insurance is required or recommended.
- Provide excellent service. Succeeding in a bookkeeping business requires excellent customer service. You need to create strong bonds of trust with your clients, and the best way to do that is to exceed their expectations. That means quickly responding to them, and having a network of other experts you can refer them to, if necessary.
Are You Ready to Launch Your New Bookkeeping Business?
If you are ready to dive in, CorpNet can help. We have everything you need to reserve business names, register your new LLC, and apply for business licenses. Contact CorpNet today and let our team of experienced professionals help make your new bookkeeping business a success!