If you’re looking for a comprehensive guide on how to start a Bookkeeping business, you’re in the right place. Here, we’ll be discussing what’s required, what are the cost, what a normal day is like, and other things to help you decide if this is a good business for you to start.
With the growth of the internet, some businesses that were typically confounded inside an office have more flexibility than ever. Just a few years ago, administrative specialty positions (like bookkeepers) had physical files they’d need access to, to serve their clients, and their office setup made it where it wasn’t as feasible to operate remotely.
Now, the bookkeeping business can have location freedom and time flexibility more than ever, and as a result, more entrepreneurs are interested in learning how to start a bookkeeping business. You might see the potential of the bookkeeping business but, you probably want to know:
- What’s required?
- What are the startup costs like?
- What’s a typical day like?
- How much money can you make?
- Will you be able to run this business and accomplish the personal life goals you have?
- And, more…
I’ll be answering all of those questions and more in this article, so if that sounds interesting to you, let’s get started…To see this content in video format, check it out here:
- 1 What is a Bookkeeping Business? | An Overview
- 2 Who is a Bookkeeping Business right for?
- 3 What’s a typical day in a Bookkeeping Business like?
- 4 Who is the target market for a Bookkeeping Business?
- 5 What is the growth potential in a Bookkeeping Business?
- 6 What are the skills you’ll need to make a Bookkeeping Business work?
- 7 What are the costs involved with a Bookkeeping Business?
- 8 What are the steps involved in starting a Bookkeeping Business?
- 9 Ready to Start Your Bookkeeping Business?
What is a Bookkeeping Business? | An Overview
According to SBA estimates, more than 627,000 businesses start each year in the United States alone. Each business needs to manage their money well: accounting for the income and expenses. If businessowners don’t manage their money, they could miscalculate, overspend, underprice, or experience other complications.
While the importance of managing finances in a business can’t be understated, many entrepreneurs just don’t like math, and for some, managing money is even more overwhelming–that’s why many businesses hire bookkeepers. The bookkeepers perform tasks to help businesses like:
- Categorizing income and expenses
- Helping to sync accounting software with bank ledgers
- and Creating Financial Statements
Who is a Bookkeeping Business right for?
A bookkeeping business is good for:
- Those who enjoy math and working with money
- Those who pay attention to details
- People who are self-disciplined
- Those who have the skills to use accounting software or productivity software (like Microsoft Excel or Google Sheets) to track the finances and make financial statements
A typical day in the Bookkeeping business will range based on how many clients you have and what services you offer them. Most bookkeeping businesses have client accounts they manage on a recurring basis.
Once recurring client contracts are set up, then the daily work would consist of tracking cashflow, syncing the transactions into the accounting software, categorizing the expenses, coordinating with clients, maintaining reciepts, sending out invoices, making sure bills get paid, writing out checks for vendors and payroll, and discuss the finances of the business.
I recommend you divide your time into four categories: acquiring the work, doing the work, managing the work, and strategizing about the work. Let me explain…
Acquiring the work: When you’re acquiring the work, you’re looking for new clients. You can acquire new clients using content marketing, going to live events, joining professioal development groups, setting up paid ads, or performing any task that helps you to build trust with the goal of a sale.
Doing the work: When you’re doing the work, this is where you’re coordinating with your clients, organizing the finances, writing out checks, etc.
Managing the work: At some point, you may need to hire. Up until you hire, you’ll still need to prepare by creating training to streamline your hiring process.
Strategizing about the work: In order for your business to grow, you’ll need to keep learning and growing. You’ll have to be self-critical, so you can identify your strengths, weaknesses, and identify opportunities and threats in the market.
Who is the target market for a Bookkeeping Business?
As a bookkeeper, there is a wide target audience. You’d work mostly with small businesses because larger companies tend to hire their own internal staff to support their operations.
Many bookkeepers find the best opportunities come from “niching down”. When you “niche down” as a bookkeeper, you could focus on a specific audience like real estate agents, real estate investors, medical practices, e-commerce businesses, or a narrower market than businesses as a whole.
You’d be surprised how much more business you can get by making yourself very relevant to a specific audience. Added to higher conversion rates, you’ll also become much more familiar with how things work, when things look good and when things look questionable.
They say bookkeeping is one of the oldest career fields in history. There are old clay tablets with ancient handwriting that’s been identified as old bookkeeping records. For as long as businesses need to manage cashflow, bookkeepers will be a necessity. With the increased interest in entrepreneurship from the millennials and generations after them, bookkeepers can expect to see even more demand.
What are the skills you’ll need to make a Bookkeeping Business work?
To get started in the bookkeeping business, you have to have the following skills:
- Familiarity with accounting software
- Technical competence in bookkeeping
- Reconcile bank statements
- Certifications with Bookkeeper organizations (optional but highly recommended)
- Sales and Negotiation skills
- Analysis of information
- Communication skills
What are the costs involved with a Bookkeeping Business?
To start a bookkeeping business, these are the recommended startup costs:
- AIPB Certification – The American Institute of Professional Bookkeepers (AIPB) offers certification without college education at $39/yr
- NACPB Certification – The National Associations of Certified Public Bookkeepers (NACPB) offers certification for $100/yr and college education in Accounting or a relevant field is required.
- Business Cards – $30
- A Website – $400/yr
- Office supplies – Printer (with scanning and faxing capabilities), a computer, a business phone line, paper, pens, stapler, etc. – $1000
- Incorporation – $400
- Education – Quickbooks courses, Xero courses, and coursework to stay in the forefront of your industry. – $500-$1000/yr
In total, I’d estimate a lean bookkeeping business startup to cost you $3000 or less. Once you get clients and sales, you can scale to purchase additional items you feel you need for the business.
What are the steps involved in starting a Bookkeeping Business?
These are the steps I’d recommend for you to start your bookkeeping business:
1. Validate your Idea
It’s one thing to suspect the bookkeeping business would be a good fit for you, and it’s another thing to take action and enjoy the work. I think it’s important to do your research and decide if you think it would be a good fit, then take action, and validate your idea is enjoyable for you.
The late Dale Carnegie said, “People rarely succeed unless they have fun in what they are doing“.
2. Prioritize Your Business
Once you’ve decided you enjoy the work associated with running a bookkeeping business, then it’s time to make it a priority. Businesses shift your schedule and your budget. You have to set new boundaries in your relationships, allot time to work on your business, and set aside the startup cash to get the business working.
3. Build Your Brand
Every business starts without a reputation. No one knows about your bookkeeping business until you start to tell them, provide quality services, and build a reputation for the business.
In addition to the reputation you’ll acquire from marketing, sales, and providing quality services, it’s also helpful to have a nice looking logo, hand out business cards that give off a good impression, and to present yourself in a professional manner.
4. Start Getting Leads and Traffic
Customers are the lifeblood of your business, and they don’t simply show up magically. Instead, you have to build a lead generation system and it takes a bit of experimentation before you have a consistent flow of customers month after month.
You may want to consider attending local events where entrepreneurs gather, asking friends and family for referrals, and setting up your website to attract your target audience. My website brings me customers every day, but it didn’t start out that way for me. I had to get training and support to learn how to do that.
If you’d like to learn how to attract daily customers to your bookkeeping business, then I’d recommend you start with my e-course and coaching program here. I offer 7 days of free coaching (included with Wealthy Affiliate starter membership), then $49/mo for unlimited private message coaching from there. Give it a try here.
5. Convert the Traffic into Customers
Once you start implementing lead generation habits into your day, then there will be a point where your phone starts ringing, your email is getting consistent inquiries, your website is attracting new prospects, and you’ll have to learn how to manage all of the attention your getting. You may want to set up things like:
- Landing pages to capture emails
- Contact forms to capture contact info and questions
- Customer intake forms
- and more.,,
You may want to switch this step around, but I wanted to make sure you decide to incorporate once you’re confident this is the business you want to do. Usually, once you’ve gotten a few sales and completed a few projects, then you’ll know whether or not you like the work.
I recommend incorporating once you’re confident because otherwise, you could jump into it too early, and require dissolution if you decide not to pursue the business any further. I think it’s a better use of your time to simply incorporate once you’re ready.
Incorporation helps to save you money on taxes and it protects your personal property from liability associated with running the business. When you’re ready, I recommend you getting help with incorporation from Swyft Filings. They are legal professionals who will make sure your incorporation paperwork is done right. They’ll also help you decide on a good business structure and state. You can learn more about Swyft Filings by checking out their website here.
7. Organize Your Books
As a bookkeeper, this portion of setting up your business is probably very familiar to you. You probably know you’ll need to organize your own finances, but I don’t want to skip any steps while I’m instructing you.
Like the businesses you offer services for, you’ll also have to manage your own finances. You can use whichever accounting software is more preferable for you.
I’ve used both, Freshbooks and Quickbooks, and they both work great. It’s a matter of preference and necessary features that determines which will work best for you. I recommend you check out Quickbooks and Freshbooks and see which is most comfortable to satisfy your business needs. They both have free trials.
8. Get Your Office Supplies
As a business with many administrative responsibilities, you’ll probably do quite a bit of paper shuffling (even if it’s simply to upload documents or organize them onto the cloud). It’s best to have the home office supplies you’ll need, so that you can work efficiently.
9. Systemize Your Process
Over time, you’ll start to see patterns in how you implement processes in your business. Once you notice a pattern that works, it’s important to record what you’re doing so it’s easy to make training manuals and train hired help when the need arises.
10. Reinvest and Scale
Once you start to have revenue, it’s important to maintain your discipline and make sure to use your revenue to cover your operating expenses, save working capital, and reinvest for growth. Things like:
- Supplies and equipment
- and other things…
Will require the cashflow of your business to sustain and grow. Don’t fall into the trap many entrepreneurs do! They get cashflow and begin upgrading their personal life. Make sure to reinvest so your business can grow and thrive.
Ready to Start Your Bookkeeping Business?
The goal of this article was to show you how to start a bookkeeping business. I’m hoping this was helpful for you to understand what you’d need to do to get the business up and running.
I explain all of these concepts in much more detail in my free Business Growth Blueprint E-course and my full video course on creating your full minimum viable business plan at Wealthy Affliate. You can get access to my e-course and all of my free bonuses by signing up here. You’ll also get 7 free days of coaching with me, 10 lessons of internet marketing training, and two free websites you can try out for free. Let’s get started building your Bookkeeping business!