When Joni Johnson-Powe was just 32 and working for a big accounting firm, she decided to start her own business after her father passed away from cancer. He owned an accounting firm, and his clients needed tax preparation help, so she took the torch.
By Avery T. Phillips
“I started the CPA firm in his name and never looked back,” she says on Taxnologi Solutions. “I have taken a couple of detours but landed right back to running my own company as it is ideal for my ‘work-4-kids-1-husband’ life balance. And I love it.”
If you’re anything like Johnson-Powe you have the passion for the work and truly want to become an accounting entrepreneur — a professional who is using their skills in accounting and managerial prowess to help solve problems for their clients. Just because you’re a CPA doesn’t necessarily mean you can run your own firm. The process involves more than merely starting a business.
“Successful entrepreneurs are determined to accomplish their vision,” according to Rutgers University. “Entrepreneurs know that they fail only when they stop pursuing their ideas, and they do not let mistakes and an uncertain future deter them from realizing their ideas. Great entrepreneurs also have a passion for learning. And most importantly, they are determined to achieve their visions regardless of circumstances.”
Do you have the chops to become an accounting entrepreneur? Here are a few basic tips:
Be Sure to Have Savings Built Up
Not everyone who starts their own business is going into it with big clients already secured, which is why it’s important to have a savings cushion in place. You don’t want to drain your savings account just to start a business.
As a general rule, you’d need upwards of a year’s worth of salary in the bank to support yourself while the business gets off the ground. You may have to keep your current job, rely on a spouse’s salary, or get a second job for awhile. You may have to ask yourself if you can live without that steady paycheck you’re used to earning as a CPA.
It’s fairly common for new businesses to fail within the first year because there isn’t enough capital from the start. Small business startups especially struggle with common accounting and tax issues. But the pay off is that you’ll be your own boss and hopefully on your way to a rewarding future, even if there are many sacrifices in the beginning.
Have a Business Plan in Place
A lot of planning has to happen to determine if it’s even possible to open your own firm. Most people don’t have a huge bank account to get a business going, which means they have to take out a loan. The lender will want to see a detailed, well-thought-out business plan or they won’t loan you the money.
Securing a loan can be an arduous process. If you need help with your business plan, the U.S. Small Business Administration offers free services to people who need help developing their plans. Another valuable paid tool is LivePlan.com.
At the least you need to know your goals, how you plan to achieve them, what are the problems you could encounter and how you plan to solve them. The plan will include a timeline, proposed costs and if there’s a demand for your accounting business.
Since it’s been established that you might not have a huge client base right away, you’ll have to wear many hats, one of which is marketer. All of your friends and family will spread the word, but you will also need a good internet presence because that’s the first place people go when they are searching and shopping for services. A web and social media presence is just as important as a physical location. You’re missing an opportunity if you aren’t marketing yourself online.
Depending on your niche, you could take the advice of AccountingWEB who says “one way to put yourself out there is to be the lowest bidder on public bid work. When you get the job perform above and beyond the client’s expectations. You give yourself opportunity to be recognized by local organizations and open the door for positive word-of-mouth advertising. You may not make the big bucks off those original projects, but the outcome will be worth it.”
Once you have your niche carved out, you’ll have to determine how you will distinguish your firm from others.
You’re a business owner first, so you’ll be more involved in managing the company than doing actual accounting for clients. You’ll have to hire smart people. Some experts say to hire people smarter than you — those motivated workers who thrive in a results-only environment.
As you start on the journey, be sure you are going into it for the right reasons, develop your clientele, hire the right team, market yourself and have a solid mission statement so everyone in the company is on the same page as you.
Avery T. Phillips is a freelance human being with too much to say. She loves nature and examining human interactions with the world. Comment or tweet her @A_Taylorian with any questions or suggestions.