Accountants may start small practices because they want autonomy to do what they love: help clients with their year-end accounts, bookkeeping, tax compliance, among other areas of accounting practice.
But for a business to be successful, accountants need to have a commercial mindset, along with the marketing and sales know-how to get a business off the ground.
“Accountants have to skill themselves up on everything that’s required to run a practice, including software, the administrative side, bringing in new business and staffing decisions. This all needs to be integrated into your processes and procedures from the outset,” says Sandra Andrews, Owner of Next Generation Accounting and Tax.
“One of the best things about being in practice is that you really relate to your clients’ perspective and their experience of running a business. You’ve gone through all the ups and downs just like they have.”
When Andrews started her business five years ago, she weighed up the costs and benefits of hiring employees.
“Bringing on more people will help to facilitate growth, but there’s also a cost involved with doing that,” she says.
Andrews shares an insight she gained while she was completing CPD training: “A good accountant will be generating $150,000 in fees.”
This means that any accountant bringing in more than $150,000 in fees will need to consider hiring, Andrews says.
“One person can only do so much.”
Getting started in practice
Starting out in business can be a stressful experience, and it can help to share the load with a business partner who complements your skillset.
But going into business with a partner isn’t a decision that should be made lightly.
“It’s great to be able to share the load with someone else, but you have to weigh up the costs and benefits of being in a partnership. It means sharing income and costs, and coming to joint decisions.”
Andrews advises asking key questions to determine if partnering with another accountant is the right step forward:
- What do they specialise in?
- Do they have an existing client base?
- What are their strengths and weaknesses?
- What are their short and long-term goals?
- Why do they want to go into practice?
- Who is responsible for bringing in new business?
- How much experience do they have?
You don’t necessarily need the same answers to each question – in fact different areas of specialisation, client bases in different demographics, and complementary strengths and weaknesses can be ideal. Look for alignment in goals and compatibility in your reasons for going into practice, and ensure you are clear about business development responsibility.
And on business development, Andrews recommends asking clients for referrals.
“If your base isn’t very big to begin with, approach your existing client base and let them know that you’re growing your business. If they are happy with your service they can refer other clients to you.
“People will talk if they’ve found a good accountant.”
Take the quiz
Are you ready to take the plunge and start your own business? Take our short eight-question quiz to help you benchmark your readiness.
