How to Start a Bookkeeping Business – Your Business Plan

If you are about to start a bookkeeping business, a business plan is an essential part of your start up requirements. This might not sound like a news flash, but many people start their own business by accident and they stumble along getting clients slowly or doing the books for their family business.

Although this is a great starting point, but if you want to take your bookkeeping business to the next level and want to create a sustainable long term business, you will need a business plan.

Many people run for cover when your start talking about creating a business plan, but it really is a wonderful tool to make your business grow to the next level. A business plan gives you all the information you need at your finger tips. Your business plan then becomes a reference tool and can help guide you in the choices you make in you business life.

You can pin point what your market is, who you market is and how you will capture your market when you have a business plan. You will be able to understand your own weakness and strengths with a business plan. It will give you a road map of where you are going and how to have a successful bookkeeping business.

There are many things which you can include in a business plan and it doesn’t need to be a 10 page novel. Short statements about what you want to achieve and how you will achieve it is fine. Waffle will not make your business plan any clearer and the age old expression, keep it simple stupid rings true.

What is your business? This is an important question for you to really understand what your business will do. Is it targeted to specific industry? You might have a lot of experience in a certain sector, such as retail or hospitality. If so, capitalise on this and market your expertise to this sector.

Is there a market for the bookkeeping business? This is a very fundamental one, but often not asked. You will need to make sure there actually is a market for a bookkeeping business in there you wish to operate in.

Is the market expanding or contracting? It is a good idea to understand what is going on in the market so you can assess if there is a long term future in the bookkeeping industry. Fortunately, bookkeeping services and the ongoing need for bookkeeping is expanding in Australia, US, UK, Canada and New Zealand.

How are you going to price your bookkeeping service? What will you do which is unique, what is your competitive advantage? Who are your competitors? What are your strengths? What are your weaknesses? How will you overcome your weaknesses and capitalise on your strengths?

These are only examples, you can use these questions as a template and modify it for your purposes and add your own ideas and requirements to it. It is a good starting point. Not only will you be made to think clearly about your bookkeeping operations, it will also assist with making the business become a reality. Additionally, it will make you feel more professional and you never know when your business plan may be needed for something.

How to Start a Bookkeeping Business – Tips to Choose Your Business Name

It is important to have a positive feeling in the business name. It is not essential to have bookkeeping in the title, but many people use it and it makes it clear what people are getting. It is good to keep it relatively short, to make it easy to remember. Words which are synonymous with bookkeeping can be a good start, like balanced, bottom line, in the black or BASic.

It is also important to research what people are searching for when looking for a bookkeeper. Often people will look on line for a bookkeeper. It is import to understand that many people search online for services and if you can have a name which contains some of the key words that people use when looking for a bookkeeper, you will be easy to find. We will go into detail later about marketing and internet search engines, but at this stage it is important to consider the words people may be using to find you. The closer you are to the top of the page in the search engine the more chance you have to be found and promote your services.

Spend some time looking at other business names in the bookkeeping industry, what do you like? What would you look for if you wanted a bookkeeper? Do some research using online tools such as Google niche finder.This tool will show you what people are searching for in relation to bookkeeping and it will give you the volume of people searching and it will give you an indication of the advertising volume for those key words. Ideally it is good to fins a high search volume with low advertising as this equates to low competition.

Once you have thought of your business name, depending on the structure you have chosen, it will determine how you proceed.

If you have chosen a company structure, you have the option of registering a general company name and use trading as names for your bookkeeping business. This may be of value if you are planning on doing a few different arms of your business. For example you might register XYZ Pty Ltd and then register a trading name such as Julias Basic Bookkeeping. You are also then free to market other services which can be run through the Company but via a different trading name, such as Julias Bookkeeping Training. This way you can have multiple business threads via one company which minimizes cost and does not lock the company name into one business stream.

To operate in the above manner, you need to complete the registration of a company form (form 201) which can be downloaded from the ASIC web site. It is then sent off with payment and once processed; you are sent your registration details. You can then register any applicable business names you wish to operate as trading as names. You will then need to open any bank accounts and register with the ATO for an ABN and register for GST if applicable.

If you are registering the company under the chosen name, such as Better Bookkeeping Services Pty Ltd, you can just complete the form 201 from ASIC and send it with the applicable fee. Once processed and your company registration certificate is issued, you can arrange your bank accounts, ABN and register for GST if you are going to do so.

If you are operating as a sole trader, you can apply for your business name in the State in which you are trading. You do not need to obtain your registration certificate before obtaining your ABN as it is issued in your name as a sole trader. This means you can obtain your ABN and register for GST if applicable whilst you are thinking about your business name. Once you have registered your business name you can open any accounts required in your business name.

On another note, your business name will become important at a later date if you ever want to sell your business. It its important to understand what your long term goals are to see if this will have an impact on your business name choice and or structure. You can think about this later and you can always change your name and structure later, but it is important to think about how transferable your business name is.

Benefits of Starting Bookkeeping Business From Home

Every business whether big or small has to maintain their financial records. Therefore, almost everyone with sufficient bookkeeping experience,skills and interest can start their own bookkeeping business from home. Check out the following benefits and see whether the business is for you:

i) Low start up capital – the cost of opening your own bookkeeping business can be very low. You need only a personal computer, a printer and a user friendly bookkeeping software. These items may cost you from $1,000 – $3,000 depending on your budget.

ii) Work at your own hours – you can work at your own hours especially if you are a stay at home mom. If you start your business from home, you can choose as long as you want because you are building your own business. In addition, working from home means you don’t need to spend time traveling to and from your office and hence saving time and money.

iii) Make more than working for others – if you were to provide bookkeeping services to small business owners, you will be easily earning more than $25 per hour compared to perhaps $15 per hour if you were to working for other bookkeeping or accounting firm. So starting bookkeeping business from home gives you the opportunity to earn more than what you are getting from working 9 to 5.

iv) Demand of bookkeeping services – the demand for your bookkeeping services is huge as every business whether it is big or small has to maintain proper financial records either for tax filing purpose or for management purposes. Hence, if you were to start bookkeeping business from home, it will be easier to get clients compared to other types of business whether getting enough clients can be hardest part of the business.

If you are an experienced bookkeeper and thinking of starting bookkeeping business from home, you should give it a try as the it is considered on of the most profitable business on account of the low start up capital.

Running a Bookkeeping Business

There is an old saying that “a poor plan well executed is better than a good plan poorly executed.” This saying applies very well to running a bookkeeping business. The reason most people fail when they start this type of business is usually not due to a lack of vision or intelligence. People simply fail to execute their plans.

There are a lot of bookkeeping business plans available on the Internet. Most of these plans involve learning basic bookkeeping skills and then finding clients. It’s a pretty straightforward plan, albeit difficult.

There are several ways to learn basic bookkeeping skills. One of them is to attend a University and earn a degree in accounting. Accounting majors graduate with a solid understanding of basic accounting principles. Most accountants don’t like to think of themselves as bookkeepers, but the truth is they understand the principles behind bookkeeping very well.

Many people with a degree in accounting have no idea how to set up an accounting system for a small business. This is something that comes with practice and experience. In school, accountants are taught the principles of accounting, but they aren’t generally taught how to step into a business and set up that business’ accounting system.

If you don’t want to drop four years earning a degree in accounting just to start up your own bookkeeping business, there are other ways to obtain the knowledge you seek. A quick search on Google will reveal some of the quicker courses you can take online or with a community college. These courses tend to be much more practical and they give you advice on how to use accounting software (something else that isn’t really taught in the big Universities). Most of these courses will cost you some money, but many are very affordable.

After you have the basic training down, it’s time to get your first client. Finding the first client can sometimes be the most difficult. At this point you probably don’t have any experience behind you and most people don’t want to outsource their bookkeeping to someone who has never done bookkeeping before. To overcome this obstacle there are several options:
(1) Try teaming up with somebody who does have some experience. After you’ve done a few jobs, then you can go out on your own.
(2) Try to find a friend or family member who is willing to take a chance on you.
(3) Try offering your services at a discounted rate, or even free, until you pick up that first customer.

On your first job, put everything you have into it. Really do a good job and you will find that your first client will refer other clients to you. The best way to find new clients is from existing clients. A simple, “Do you know anybody else who might benefit from my services?” will get you a surprising amount of customers.

The blueprint for starting a bookkeeping business is not rocket science. You simply need to understand basic bookkeeping skills and find clients. However, most people fail to execute this simple plan.