Bookkeeping businesses are booming these days with how much data entry and financial record-keeping is required. Bookkeeping can even be quite profitable, as everyone needs bookkeeping and always will; the service doesn’t really ever stop being valuable.
If you want to learn how to start a bookkeeping business, you’ll want to consider the following outline to get things right the first time.
Become A Certified Bookkeeper
First and foremost, you’ll need to establish that you have credibility within the bookkeeping business if you want to get any clients over the long-term. Chances are you’re only thinking about starting your own bookkeeping business if you’re already a bookkeeper. But if you’re not, you should seek bookkeeping certification before beginning the business.
You can do this in a couple of different ways. The American Institute of Professional Bookkeepers offers one route to certification, which involves over 3000 hours of work experience and studying. The National Association of Certified Public Bookkeepers is another path, which involves passing an exam after you’ve earned an associate or bachelor’s degree in accounting.
Make A Business Plan For Your Bookkeeping Business
After earning your certification as a professional bookkeeper, it’s time to make a business plan. This involves writing down your profit projections, how much the business will cost, what types of services you will offer, and a projected balance sheet. Basically, think of everything that might impact how your business will perform and write it down so you can stick to the plan as you get into the gritty details. Investors may also require a business plan if you need significant startup capital.
Set Up Financing
Speaking of capital, you should come up with a financing plan before starting up your business. Bookkeeping won’t run you nearly as much startup money as something like a contracting business, but you’ll still need some money to purchase the software and other supplies you need to do bookkeeping services. You may also need to rent office space or hire employees. Figure out your financing beforehand and determine whether you have the cash saved up to pay for things yourself or if you need to ask for a loan from the bank.
Incorporate Your Bookkeeping Business
If your financing looks good, you can move ahead with incorporating your bookkeeping business. It’s always a good idea to fully incorporate your business as either an LLC or a different type of business. This limits your personal liability and prevents you from losing your personal assets in the event that something goes wrong. Other types of business structures, like a partnership, a corporation, or a sole proprietorship, are alternative options.
Name Your Bookkeeping Business
You’ll also need to come up with a name for your bookkeeping business. This can be fun, but it’s important to think of a name that’s both memorable and to the point. You want potential customers to know exactly what type of service you offer and have your name be easy for them to recall when they are looking for someone to perform bookkeeping services. “Bob’s Bookkeeping” is a decent example, though you can easily be more creative while still getting the point across.
Set Up Your Bookkeeping Business
Now it’s time to fully set up your business. This may involve hiring an answering service in case you need to get back to multiple clients every day (and during busy parts of the year like tax season). You’ll also want to do things like set up a business bank account to keep your personal and company funds totally separate.
A business mailing address is another required aspect you should take care of at this point. For this factor, renting a PO Box from your local post office is cost-effective but may seem to be slightly less professional than if you had your own office space. You can rent a UPS mailbox to overcome this limitation, while still being cost-effective.
Get your office into shape, as well. You might have a home office, in which case setting everything up shouldn’t take too long. But if you decide to set up an office at a different building or location, this may take a few weeks.
You don’t want to skip insurance, even as a bookkeeper. There are certain types of liability insurance in which you should invest in case a mistake is ever made on a client’s books. This protects you in the event of a lawsuit. You may also need to look into workers’ compensation insurance if you hire employees.
After all this, you should look into getting the right materials or software you need to fully carry out your bookkeeping services. Bookkeeping or accounting software is the number one thing you’ll need, and you may already have it if you have a professional history as a bookkeeper.
You may also need payroll software or a payroll service. Tax software, practice management software, and electronic file sharing are other things you should consider. Then don’t forget in-office supplies like pens, a comfortable chair, a good computer and a solid Internet connection, and so on.
Get Finances In Order
Take this opportunity to make sure your financial streams are in position, whether it’s loans or your own savings. It may also be a good idea to apply for business credit cards. These can be easy ways to track your various business expenses and earn certain benefits. Some credit cards even allow you to benefit from certain types of financing.
Time To Market Your Bookkeeping Business
With all that said and done, now you can move on to marketing, which may be a little more fun than the other aspects of setting up your bookkeeping business.
Make A Website
The first and most obviously you should do is make a website for your bookkeeping business. You’ll be able to onboard new clients more easily through an online interface. Plus, people will more reliably check your business out if you have a webpage then they will physically stop by your office.
Making the website also allows you to perform entirely online or virtual bookkeeping services, which is the most common type of bookkeeping these days.
In conjunction with your website, you should look into online advertising. You can pay for ad campaigns or send out newsletters to various people in professional organizations that may be in need of a bookkeeping service.
Additionally, you might benefit from physical business cards or sending out targeted emails to your friends and family. Business cards are a really great idea if you interact with other business professionals in your day-to-day life.
Final Thoughts: Starting A Bookkeeping Business
After all that, all that’s left is to start running your bookkeeping business as best you can. Good luck!
Want to learn more about starting a business? If you do, you may also like to read our guide on the six best books on starting a business. Grow your business knowledge and make your bookkeeping business a true success!