With the earning potential being high and startup costs being low, bookkeeping is frequently ranked as one of the most lucrative businesses, whether you do it as a side hustle or a full-time job.
In that manner, there are numerous advantages to starting a bookkeeping business; for example, most bookkeepers operate from home and have minimal overhead costs. Furthermore, you can get a predictable monthly revenue from a stable set of clients, and it’s pretty straightforward to handle the business with appropriate planning.
However, there are several things you need to consider before starting a bookkeeping business, such as determining where to begin your business, registering the company, getting the required certificates, hiring the right people, such as business tax accountants and finally calculating the involved expenses.
To make things easier for you, here’s a brief guide for prospective bookkeepers who plan on starting an independent bookkeeping business, so you can become self-employed and start making money today.
Compose a Bookkeeping Business Plan
Regardless of the type of company they’re willing to launch, every prospective business owner should prepare a thorough business plan. Accordingly, to kickstart the process of launching a successful bookkeeping business, first, you need to compose a comprehensive bookkeeping business plan in which you’ll lay out a detailed outline of your company’s objectives and the ways you will achieve them.
Additionally, it should also outline the services you’ll offer on the market and how you’ll gain a competitive advantage in your industry. This way, you’ll have a document in writing on which you’ll build your estimates and plans for your future development and will assist you in completing the most crucial tasks of your business along the way to keep it running.
Speaking of the business plan, there are two sections of the overall initial strategy that demand special attention—your bookkeeping business name and getting your certifications so you can start the business.
Your Business Name
You should think about your business name carefully since it would be the first impression on potential clients. In addition, it will say a lot about your specialization, personality, and, most importantly, knowledge. So, before you choose a business name, double-check that it isn’t currently in use by someone else and once you’ve narrowed down your choices, check your state’s database to see if the name is readily available.
If you don’t have any work experience or formal training in bookkeeping, you might need to enroll in bookkeeping classes to ensure that you are updated with current regulations, have the requisite abilities and grasp the concepts successfully.
In fact, to run a legal bookkeeping business, you will need to become a certified professional bookkeeper by acquiring the “certified bookkeeper” certificate which the American Institute of Professional Bookkeepers issues. Along with that, training allows you to ensure that you appreciate what you’re doing, and it might give you an added boost of professionalism if you already have some experience.
Register Your Bookkeeping Business
Once you complete your business plan, the registration of your company is the next crucial step you need to take. Depending on your state and the sort of business structure you choose, the cost to legally register your bookkeeping business can range anywhere from twenty dollars to several hundred.
However, the best thing to do is hire a lawyer who can assist you in determining which business structure is best for your situation and will file the necessary paperwork. Furthermore, it would be best to choose a business entity that will allow you to have liability protection if something goes wrong.
Besides, it’s also a good idea to look into insurance for your bookkeeping company because if you haven’t got that covered, you could face costly professional and general liability in case of a mistake in clients’ books, which could be devastating to your business and, in certain situations, your finances.
Set Up Your Prices
The most challenging task for any small business owner is determining what to charge, considering that If you charge too little, you won’t be appropriately compensated for your labor and your years of industry specialization, or if you charge your clients too much, you’ll struggle to compete with other bookkeeping firms.
According to Salary, a website that records and compares salaries and rates in the U.S., a bookkeeper’s average hourly rate is roughly $22. However, it’s best to find bookkeepers with similar experience and skillsets to help you figure out how much you should be charging.
Handle the Marketing
Like with any other business, it doesn’t matter if you’re the best bookkeeper in the world if no one knows who you are or where you can be found—which is why marketing your services is just as vital as starting the bookkeeping business. Still, the way you’ll promote your business should be determined by several factors, including your budget, location, target audience, and specialization.
Nonetheless, most of your marketing should be a mix of advertising and networking, such as paid Google ads placement, attending conferences and joining relevant meetups in person, or meeting people online through social media.
Finally, make sure you expand in tandem with the businesses around and keep your skills up to date. Remember that investing in your company entails investing in yourself, so be prepared to put in the time and hard work required to get it off the ground.