Are you looking for step-by-step guidance on how to start an accounting business? If so, this article is for you.
It’s likely that if you’re here, you see the demand from people who need help with:
- Properly reporting financial information to government or others
- Getting out of debt
- Setting up retirement accounts
- Investing in assets
- Decreasing liabilities
- Building net worth
- and overall, Making good financial decisions
The demand for financial advice is all year around with peaks at tax time, New Year’s, and around times where it’s common to set new financial goals. Having a business that has an evergreen demand is a great thing because you don’t have to worry about seasonal shutdowns and things like other businesses might have to.
If you’re here, you might be interested in helping people with their finances, and you know that it could become a successful business venture, but it can be confusing to get started. If you want to start an accounting firm, but you’re confused about what’s required, how much it might cost, or what steps you have to take to get started, then stay tuned because this post is for you.
What is an Accounting Business?
An accounting business is a business that helps to record, analyze, and interpret financial information.
Types of Accounting Businesses
Some accounting businesses specialize in:
- Data interpretation
- Financial analysis
- Increasing net worth
- Corporate finance
- Small business finance
- Real estate
- Credit cards
- Retirement planning
- Paying off debt
- and financial independence
There are several different types of accounting services offered.
What do Accounting Businesses do?
Accounting businesses help you:
- Stay in compliance with local finance requirements
- Budget and make sound financial decisions
- File your taxes
- Keep your bookkeeping organized
- Create financial reports
- and, Analyze financial statements and reports
The Traditional Way to Start an Accounting Firm vs. The Modern Way
Traditionally, you’d start an accounting firm by going to school for accounting or partnering with someone whose met the qualifications. After getting the licensing and schooling out of the way, you’d rent out a location, buy your office supplies, incorporate, get your copyrights, patents, and other legal matters underway, then you’d design your services, choose how you’ll accept payment, decide what pricing structure you’ll be using, and build an audience of prospects by passing out flyers, handing out business cards, attending events, telling friends and family, advertising in newspapers, and growing the awareness of your brand other ways.
Starting an accounting firm the traditional way could cost you upwards of $10,000 in startup capital, and many people nowadays don’t have this.
Since the internet has been growing so aggressively, there are more opportunities for businesses to start with lower overhead and less upfront risk. In the modern climate, you can set up a website and begin building an audience while you’re organizing other things like licenses, office space, incorporation, and other things.
When you have an audience first, then, when you have products or services to sell, it becomes much easier. Starting a business and using content marketing to attract new prospects can cost $1000 or less to get started and you can offer services virtually, which can cut down the startup costs significantly.
How to Start an Accounting Firm – Step-by-Step
Now, you might be interested in knowing how the modern way of starting an accounting firm works. Here are the steps I’d recommend for starting an accounting business…
1. Acquire the Necessary Skills and Licenses
Finance is a very highly regulated industry. Most governments want to know that people are receiving accurate financial information, so there are stiff requirements for being an accountant or financial advisor. If you don’t have the educational background, it’s important to make sure you hire people with the educational background in accounting.
Do you need a CPA to start an accounting business?
To offer bookkeeping services or tax filing, it doesn’t require a CPA, however, if you want to offer other services, it may require a CPA license or other certifications. You’d want to check with your local agencies to validate the requirements you need.
How do you start an accounting firm with no experience?
If you want to start an accounting firm, but you have no experience in the field, it’s probably best to start by investing in education, hiring consultants, interning with other experienced accounting firms, and building a group of advisors who have experience in business (especially in the accounting field).
2. Choose a Niche
Once you’ve acquired the skills and experience necessary to offer exemplary services to others, then it’s important to choose a niche or target audience you’ll be serving. You may not have realized it, but just like how doctors have specialties, accountants can have specialties too.
Accounting Niche Examples
For example, there are niches within accounting like:
- Forensic accounting
- Estate/trust accounting
- International tax
- Mergers and Acquisitions
- Accounting information technology and systems
3. Build a Website
Once you’ve decided on which audience you’d like to serve, you want to build your website–this serves as your storefront or location. You can attract potential customers, overcome objections, make the sale, and deliver your services from your website if you want to. Alternatively, you can use your website solely for attracting new customers. It’s up to you. Either way, a website can be a valuable part of your marketing plan, and you can easily build a WordPress website by entering the name you want below.
4. Attract an Audience
Once you’re website is set up, you want to begin attracting an audience. There are several methods of attracting an audience to your products or services, but the modern way is content marketing.
Creating content online helps to build trust, it’s low cost, and over time, it can perform for you like a virtual sales team (even in your absence). You can create videos, audio, graphics, social media posts, and articles (like the one you’re reading). When the content you create crosses paths with someone who needs it, it helps to solve a problem they’re having, and it’s likely, they may consider buying more from you.
5. Sell a Product or Service
When you’ve attracted people and they’re interested in the solutions you’ve presented in your content, you can sell products or services. For example, let’s say you write an article on “how to save your $1000 emergency fund in less than one year”, and you share a method that’s worked for you and others. It’s likely that to achieve that goal, you needed products and services. Maybe you needed a plan, budgeting apps, checklists or planners, or other things.
Within your article, you can recommend products and services and make money selling them. Typically, businesses who operate online make money by selling affiliate products (or making commissions from selling other people’s products), selling their own products, selling ad space on their websites, or selling services.
How much can you make with an accounting business?
Since a business isn’t capped off by an hourly rate, it’s lots of income potential. An accounting business can make as much as they can sell. You can partner with companies and sell their products and services. For example, you can partner with a company like Quickbooks and sell their accounting software for commissions. You can also sell your accounting services. You can post ads on your website and create your own products. There is really so much possibility in the accounting niche!
Once you start to get sales, it’s important to incorporate. Incorporating will enable you to separate yourself from your business. You can get a business bank account, you’ll be legally recognized as a separate entity from your business, and you can even lower your taxes. If you need help with incorporating your business, I recommend you check out Incfile.
7. Make money and Scale
When you’ve gotten your educational requirements and licensing, built your website, attracted potential customers, sold products and services, and incorporated, you’ll start earning money and protecting it from overpaid taxes and lawsuits. When your system is working and getting you clients, then it’s time to scale by increasing your effort, growing your team, and creating more products and services to serve your audience even better.
Starting an accounting business can be a very fulfilling venture. Hopefully, this step-by-step guide helped you to see the steps it would take to start an accounting business in the modern climate. If you have any questions about this, you can leave them in the comments section below, or join the Enterprise Builder membership where you can ask questions and get even more advice to start and grow your business.