Opening your accounting firm is just like opening any other business. It takes patience, determination and a lot of hard work. However, unlike other types of companies, accounting firms must follow certain regulations to be compliant with state and federal laws. So, if you’ve contemplating becoming your own boss but don’t know where to start, you’ve come to the right place. In this guide, we’ll go over everything you need to know about opening an accounting firm.
4 Tips to open an accounting firm
1. Education Matters
Unless you already hold an MBA in finance, you may want to think about going back to school to earn yours. That’s not say you can’t open your business with only a BA, however, earning an MBA can give you the skills and knowledge you need to be successful. If you aren’t eligible for financial aid or federally backed loans, there are other options you can explore. Student loans can be tailored to fit your personal needs, allowing you to only borrow the exact amount you need. If you have good credit, you may also pay less interest as well.
2. Create a Road Map
Aside from having proper education, you also need to create a road map for success. One of the worst mistakes you can make is leaving anything up to chance. Your plan should include a rough estimate of start-up costs, your preferred clientele, how much you plan on charging and what you plan on calling your business. In terms of start-up costs, you need to decide whether you’re going to work out of your home or find another location. You also need to have all of the regular office basics, such as computers, fax machines, desks and other office equipment. If you work out of another location, you’ll also have to account for utilities as well.
You can easily finance everything you need for your accounting firm thanks to business loans. Business loans can be used to purchase all the necessary expenses, equipment, furniture and supplies you might require. Just remember to check your credit score and history to make sure it’s in a good position before taking one out. When it comes to your clientele, who do you want to work with? Some accountants prefer to work with the general public while others only work in the B2B sector. Next up is how you plan on making a profit. Will you use social media to promote your services, or will you invest in PPC on Google? As with any new business, it’s important to have a clear goal in mind.
3. Determine Your Firm’s Business Structure
A business structure is what determines how your company files taxes as well as handling important legal matters. This is one of the most important decisions you’re going to make, so it’s important to take your time with this. There are a few variations of a corporation, but only two are mainly used; S-corp and C-corp. S-corps are meant to prevent being double taxed compared to regular C-corps. You’ll have your personal assets protected, so they can’t be used against you. C-corps allow you to net profits and easily attract new investors.
Furthermore, corporations, regardless of the sub-category, are considered to be separate legal entities, which is why they’re taxed differently. Sole proprietorships are when you are responsible for pretty much everything relating to your business. This is something that’s recommended only for those who have already had their fair share of experience in the business world.
Newcomers may be overwhelmed by the sheer amount of responsibility that’s tied to it. But if you do decide to go this route, there are a few advantages. For starters, there’s significantly less paperwork you have to file. You also don’t have to worry about paying an exorbitant amount of fees and you can hire as many employees as you want. Partnerships are vastly similar to a sole proprietorship; except it’s owned by two people.
LLCs have become one of the most common business structures to date. So much so, people have even switched from being a sole proprietorship to a limited liability company due to the amount of advantages. In fact, it’s because of the establishment of LLCs that opening a business has become very simple. It’s the most beginner-friendly option as it offers the best protection. You’ll never be held personally liable for any kind of legal matters. It can be opened by multiple people and taxes are handled as if your business was a corporation. You can consider LLCs to be an all-in-one package.
4. Make Sure to Offer Job Flexibility
One of the best benefits of an accounting job as a whole is its flexibility. Job flexibility is one of, if not the most sought-after benefit. No one wants to sit in an enclosed space for hours on end. Because of how digital everything has become over the recent years accounting has become one of those jobs that can easily be done from home. You’ll be amazed at how many applications you’ll receive just by offering job flexibility alone. After all, accounting isn’t always an easy job, so you want your employees to be in a comfortable and productive work environment.