The field of accounting offers plenty of opportunities for advancement, and many accounting professionals consider opening their own practice to be the pinnacle of their career efforts. If you’re seriously considering opening your own firm, there’s a variety of aspects you need to keep in mind and challenges you should be prepared to face.
Which Type of Practice is Right for You?
You’ll need to determine which type of practice is best suited towards your resources and aspirations. If you’re hoping to start an accounting firm from scratch, you’ll get to avoid the frustration, headache, and legal vulnerability that you might encounter through legacy issues. These can include issues with your former employer, problems with pricing schemes and issues with old software.
For some, it can be too difficult to start from scratch, so many choose to go into part-time practice. This involves picking up side clients outside of your current employer. Generally, this is a good period to feel it out and determine if running your own practice is actually what you want. You may also consider buying a practice that comes with its own set of clients; however, this option has its drawbacks. Because this option is so tempting, there is often fierce competition, which can make this an extremely expensive endeavor.
Consider the Requirements
The requirements for opening your own practice vary by state, but accreditation as a CPA is vital in most states. You may also need to purchase a business license, and check in with local rule-making bodies to determine whether there are any particular requirements may apply to the services you plan to offer. There are also zoning stipulations to consider; whether you’re opening your firm in your own home or leasing a space, ask your local governances about any legal issues regarding use of the space.
Taking Costs into Account
Make sure you have the right financial resources before embarking on this endeavor. While the overall startup costs of an accounting practice are dependent on your area, clients, entry strategy, and goals, it can cost upwards of $50,000 to start your own firm. Begin by looking at your revenue goals, and then determine where your office should be located. Whether you work from home, use shared office space or invest in an entire office, consider what your clients will prefer and what you can actually afford.
Understanding the Ideal Roster
If you’re looking to hire employees at the onset, understand that you’ll likely want to look towards those just entering the field who are looking for qualified experience. Many who start their own accounting practice find they can’t afford the salaries of multiple employees, especially those who come with their own certifications.
Generally, it’s best to hire young professionals; you can invest in their abilities, train them in the necessary functions, and, most importantly, be able to handle their salary needs on your startup budget. You can also choose to invest in their abilities, grooming interns into professional employees that do your company a great service. Consider encouraging employees to pursue their CPA certification by purchasing courses from a site like Beatthecpa.com. Pay for their exam fees, and offer promotions and salary hikes for those who do. Because the accreditation process can take several years, you’re investing in your business’s long-term future.
Long gone are the days of seeing accountants hunched over at their desks, scratching away furiously with ledgers, pens, and paper. Technology is the future, and you’ll find it’s essential that you embrace advanced software options in order to remain abreast of the trends in the industry.
As more technologies are introduced to the world of accounting, the landscape of the field is shifting. As you hire, it’s important to consider the technical aspects of the position, and you’ll want to invest in related technology courses for your existing employees who don’t have experience in accounting software or cloud computing.
Starting your own accounting firm is a road rife with obstacles and challenges, but with the right strategies in place, a bit of foresight, and plenty of tenacity, you’ll be well set for success in your own practice.
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