Starting your own accounting firm? Jacqueline Hodges April 21, 2018 Accounting, Linden Blog, School of Finance We’ve got some important steps for you to keep in mind, and facts that we hope can help you too! Current state of the accounting industry Before you begin starting an accounting firm – or rather, any type of venture – it is important to do your research and understand the industry that you’re aiming to get into and the factors that impact it. According to Bankwest’s Industry Review report on the accounting sector, more than 133,000 Australians are employed in accounting services. Between 2014 and 2015, the accounting services sector was responsible for generating $17 billion in revenue. These numbers reflect just how significant the accounting services plays in the professional services industry. Many accounting businesses are located in major Australian cities. Bankwest has found the majority of these businesses to be based in New South Wales. While it’s easy to imagine that the majority of the firms in the accounting industry are large, smaller firms are the dominant. The ‘Big Four’ of the accounting industry only account for roughly 30% of the available market share (AFP Business Brokers). The profession can be separated into the ‘Big Four’, 2nd tier, mid-tier, medium sized and small accounting firms. There are many different markets that these firms cater to – meaning that there is plenty space in the market for the smaller firms to enter and compete in (AFP Business Brokers). The important questions Before you start an accounting company, ask yourself: Do I have enough experience to help the needs of other businesses and individuals? Do I have one year’s worth of capital to begin and operate for one year? How will I differentiate what my accounting company has to offer from others in the market? Entering the market Develop your Business Plan Like every business venture, your accounting firm will need a business plan. Your business plan should cover the following areas: Your goals for the business Target market research What services you offer Your chosen business structure Breakdown of costs and capital requirements Marketing your business Pricing strategy Office location and requirements Projected costs to start up, budget and revenue model Insurance Try it out part-time If you’re still feeling some hesitancy before taking the plunge to break out on your own, consider picking up some clients part-time and see whether you enjoy working on a full-time basis and starting out on your own. How about it, partner? Two heads can be better than one. By finding the right partner or joining the right franchise, you can potentially have more service offerings, share costs and may appeal to a larger customer base. Old issues, fresh start One of the perks about starting out is that you aren’t beholden to any business legacy issues that may push down profits such as an old fee structure, old equipment and software or client service issues from the past. Make sure that you can market your services and price yourself accordingly. Brush up on the management of your marketing, pricing, selling and practice! Know your software Familiarise yourself with online accounting and bookkeeping software that is often used for small businesses, such as MYOB, Xero or QuickBooks. Cloud computing now offers accounting firms Software-as-a-Service (SaaS) solutions, allowing firms to be able to use flexible and extensive software applications that operate with strong data security at fixed rates. Join industry and professional groups If you are a member of any industry or professional groups, utilise them for information and support! If you aren’t a member of any of these groups, then sign up. Chartered Accountants in Australia and New Zealand (CAANZ) and CPA Australia are two of the world’s largest accounting bodies with a global membership and offers many core services to its members including education, training, technical support and advocacy. Know the guidelines and legalities Starting your business can be stressful but it can be even more stressful when you don’t know the guidelines and legalities around your business operations. There are many resources out there for new businesses to understand the requirements of practicing in Australia. CPA Australia has compiled a list of resources and information for public practices, including links to resources and support that the Australian Government offers as well. Check out our Certificate IV of Accounting. Accounting,Accounting Business Plan,business Jacqueline Hodges Jacqueline Hodges is Head of the Department of Finance and has many years of experience as an academic writer and trainer. Jacqueline is a Chartered Accountant, a registered Tax Agent and Financial Planner. Post navigation ← Unknown Famous Accountants Millennial’s in the Workplace → Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website This site uses Akismet to reduce spam. Learn how your comment data is processed.