Launching your own accounting firm as a CPA is a chance for you to spread your wings and reap all the benefits of being a business owner. With great rewards come great responsibilities. The sad reality of going into business for yourself is that many would-be entrepreneurs will fail.
How you establish your accounting firm and the practices you implement will lay the foundations for success or failure. According to the U.S. Bureau of Labor Statistics, 20% of small businesses fail in the first year.
To increase your chances of success, here’s your guide to starting an accounting firm in 2023.
Begin with a Business Plan
Entrepreneurs can get into the habit of moving too quickly in their excitement. Take a step back and prepare a business plan.
Your business plan outlines how you’ll launch your brand, your six-month plan, and where you want to be in the years ahead. In addition, business plans layout expenses, revenues, services offered, marketing strategies, and growth tactics.
If you intend to apply for financing to fund your accounting startup, you’ll need to supply a comprehensive business plan. But on the other hand, even if you have all the financing you need, a business plan is excellent for directing your operations.
Remember, your business plan is a living document, so you don’t need to get everything perfect at this stage. You can always go back and make changes.
If you need help and support in planning your path to success, the U.S. Small Business Administration (SBA) has several free resources to get started.
Get Your Licenses and Permits
CPAs looking to open an accountancy firm must have the necessary licenses and permits. In addition, every state has its own requirements for what you need to open your doors.
For example, some states may require you to obtain a special license and a separate permit to operate in your local municipality. Get all the necessary paperwork before offering any services to avoid problems later.
Now is also the time to register your business with the IRS and obtain your free Employer Identification Number (EIN). Your EIN authorizes you to hire employees as a legal employer. So it’s best to get it now, even if you don’t intend to hire employees immediately.
Invest in the Right Software
Running a business means completing manual, repetitive tasks. These obligations are unavoidable and can take away a significant amount of your day.
Investing in accounting practice management software lets you track everything from clients to employee workflows. You can also use it to automate repetitive tasks, create a logical filing system, and even consolidate your marketing channels.
There are so many options on the market, so make sure that you do your research. You’ll find solutions for every business size, each with its pros and cons.
Make the initial investment and maximize both productivity and efficiency from day one.
Decide on Your Work Setup
Running an accounting firm means you can work from home if you have the right tech stack. Accountancy businesses are also well-positioned to operate through a network of remote workers because they have the communication tools to keep everything on track.
Some entrepreneurs may want to rent an office so everyone can meet and collaborate as part of an in-person setup. Again, the choice is entirely yours.
You can also opt for a hybrid approach to get the best of both worlds. Each option requires different management styles to make them work.
Hire the Right People
The time will come when you need to hire your first employees. Making those first hires can make or break your business.
Attracting and retaining the brightest and the best is a challenge, but if you offer suitable compensation, work setup, and company culture, you can plan for one or two rising stars to help grow your firm.
Your business plan must anticipate hiring needs so you know when you’ve crossed the threshold where you can justify making your first hire.
Scrambling to hire someone when you’re already swamped with work means compromising and hiring a sub-par employee. It also means potentially cutting corners to get through all the work on your plate.
Market Your Business
Your priority is to attract clients to fill your pipeline. Effective marketing requires you to brand your business and focus on impactful channels to get the word out.
Most new accounting firms start their marketing efforts at home. Offering cut-price introductory accounting services to local businesses is a great way to raise your profile and give people a taster of your offer.
Target social media to make people aware of your new accountancy firm. For example, send social media ads to people who live near your base of operations.
Other options for local marketing include:
Setting up a local SEO strategy.
Investing in affordable radio ad spots.
Handing out business cards.
Posting flyers to local businesses.
Attending local business conventions.
It will take time to fill your pipeline with clients. Attracting business is the hardest part of the game, but once you have a constant stream of clients, you will find that your business can essentially market itself on autopilot.
Establish Your Workflow
Performing a service as a business owner for the first time means getting into the correct flow. Your workflow defines everything from onboarding new clients to invoicing them for a job well done.
Define a workflow during the early stages of your business to ensure you have everything you need to produce high-quality work consistently.
With accounting workflow software, you can streamline this process and reduce the time it takes to get into the groove.
Starting an accounting firm in 2023 is an opportunity to take advantage of the rise of new businesses nationwide. Everyone needs an accountant to keep a lid on their numbers and file taxes. You offer a valuable service that can be utilized to start and grow a successful firm.
Planning for success is the single most crucial step in the process of increasing your chances of surviving and thriving. So take a step back and analyze your business plan and nearest local competitors.
What are you doing to enhance your chances of business success?