Nibletz Staff
The entrepreneurial spirit leads many CPAs to consider opening their own practice. However, opening an accounting firm requires more than accounting prowess and financial acumen. There are a bevy of factors that play into the success of a small business startup, and you must be ready to invest the time and money into establishing your firm as a credible, reputable source for accounting services.
The Financing Requirements
When drawing out the financial plans for your startup, you need to accumulate enough funding to get your firm up and running—and keep it running for a full year. You’ll need to assess the cost of office leasing, equipment, advertising efforts, and living expenses for both you and any employees you hire. Depending on your location and size, you can expect to need $50,000 or more to begin with. First consider your revenue goals. This will help you determine where you should place your office, help you evaluate what types of client you’re hoping to obtain, and determine any specialty services you intend on offering. If you don’t have the personal capital to invest, you’ll need to seek out financing options. Many consider SBA loans and traditional loan options from banks; however, in recent years, banks and traditional lenders have tightened the reins on loan approvals, so without previous experience in running a successful startup, you may need to pursue other means of funding.
Licensing Requirements
In order to open an accounting firm that provides public accounting services you must have a CPA license. To do so, you’ll need to meet the qualifications required to sit the CPA exam; every state in the country requires a bachelor’s degree, and many also require a minimum of 150 semester hours in accounting-specific education, which many achieve through master’s programs. You’ll also be required to apply to your state board of accountancy in order to register your firm.
Invest in Your Employees
The secret to a profitable accounting business is loyal, hardworking employees. Your team is integral to success. Find skilled employees that are well-qualified for the position. The best way to find these individuals is to draw upon a large pool of prospective hires, then implement a rigorous interview process. Once you make a hire, make them want to stay. The cost of turnover can drown a startup, and showing the right individuals they matter to the success of the company can pay dividends down the road. Invest in your employees by fostering strong relationship within the office and through networking opportunities; improve their skills and certifications by funding their CPA prep courses; offer competitive salaries, bonuses, and employee insurance policies to encourage loyalty. There’s no limit to the ways you can invest in your accounting firm’s employees, and doing so means investing in the future success of your business. You may choose to find a partner, use hard money lending, or consider utilizing angel investors from Angel.co. Always be sure that you completely understand repayment stipulations and interest rates on any type of loan you procure to ensure you’ll have the means to pay it off.
Marketing Essentials
You’ll need to generate a cache of clients for your business, so be prepared to invest time and money into strategic marketing schemes. You can utilize resources like the American Institute of CPAs. They offer marketing materials that include templates, printing services, and other essentials. Prioritize networking—your colleagues and even personal contacts are going to be your best resources for attracting new clients. Write articles and have them published online and in local news publications to expand your network. Book speaking engagements; whether that be in local seminars, in support of community projects, or with local service clubs. This gives you another measure of visibility, and will further expand your reputation as a credible source for accounting services. You can also hire a company that provides marketing for accounting firms if you have the finances to invest. This can help you saturate a competitive market from the onset.
Opening an accounting firm is a journey filled with hurdles, but with the right preparation, funding, and team, your startup is poised for success.
