It’s a cliché to say that we live in extraordinary times. But where many see trouble and strife, some accounting practitioners see opportunity.
ACCA reports a dramatic increase in those looking to setup new practices. As of November 2020, nearly 900 practising certificates had been issued across the year – a significant rise compared to 2019.
Is now the right time for you to go it alone – and create the practice of your dreams?
Alas, this has never been easy, even at the best of times. I look at some of the key challenges below. But first, you should know that Sage has partnered with ACCA to offer all new ACCA licensed practices complimentary software for their first 20 clients and for the first six months of the business.
In short, it means you will have one less thing to worry about.
You get free access to award-winning software like Sage Accounting, Auto Entry, and Sage’s excellent range of payroll software like 50cloud Payroll Bureau. Eligible new practices also get access to Sage University and accreditation, and are assigned their own Practice Success Manager, amongst other benefits.
But now let’s take a look at some of the key challenges around going it alone – and how you can not only come on top, but thrive in the new normal we live in.
This is the basic but essential first step from which everything else springs. So make sure you get it right!
Are you going to focus on a bricks-and-mortar base of operations, or are you going to put most energy into an online operation? When it comes to clients, are you going to be a generalist or utilise your specialist knowledge to hone a more select client list? Or a bit of both? What services are you going to offer from day one, and what areas will you expand into in the future when you have increased capacity (eg payroll, auditing etc.)?
It’s so tempting to open your doors immediately upon deciding to create a practice. After all, you’ve been doing this for years – so why wait? Well, experience shows that those that first create a rock-solid model tend to do better in those perilous early days than those that don’t. And be aware that deviating from the model tends to bring trouble – it can break your fledgling processes, and thereby create additional costs, such as labour.
Stay true and rely upon your experience to guide you!
You also have the opportunity to create a thoroughly modern practice, of course. You can insist clients only use direct debits for payments, for example, which dramatically reduces admin around chasing payments. And you might only take on clients that use accounting software – increasingly essential in light of the ongoing Making Tax Digital initiatives, and a game-changer for accounting professionals who can tie it into their practice software for ease of access to client accounting data.
One area of the business model to remain flexible around is pricing. You can take advantage of your small size and low costs to undercut competition in those early days. But pricing will inevitably evolve as both your practice grows in size – and your client businesses do too. Make sure this scaling is built into your business plan, and let it inform your targets for growth.
While established practices treat onboarding as one process amongst many, for a new practice it’s surely an area that requires intense focus.
While giving each new client care and attention is sure to pay dividends, and may be necessary to instil trust in your start-up business, it can also be very labour intensive. There’s poor value represented by highly-qualified and experienced accounting practitioners spending time filling in forms.
Onboarding software can really help, as can hiring temporary staff to help out, but for guidelines around creating practice engagement letters, money laundering declarations, professional ethics statements and more, you can make use of the ACCA’s resources. Why reinvent the wheel?
Similarly, there’s a lot to be said for taking a sneaky peek at how your direct competitors do things. For example, what technology do they appear to use for their website? What marketing techniques do they use (eg newsletter, webinars, mailouts etc.).
Start slow, and build up speed
It’d be nice to get 100 clients the day you open your door (or publish your website), but the reality is likely to be more of a hard slog and gradual growth – at least for year one.
Take every chance to network. Focus almost exclusively on growing the client list, and honing processes for efficiency.
The best advice is to fish where you know fish to be, rather than simply cast your net into the middle of the ocean and keep your fingers crossed. You’ll almost certainly have some idea where the kind of clients you want hang out. Make use of this knowledge, and be fearless in your pursuit.
Don’t be afraid to get help. Attend trade shows like Accountex (post-Covid!) and discuss what you’re doing with other professionals. You might even seek the help of a business coach who can come in, view your processes, and spot your weaknesses – as well as your strengths. This kind of investment can pay for itself 100x over.
An amazing 1,843.5 start-ups were created every day in the 2018/19 tax year. When it comes to side hustles – those with a second job or self-employed outside of a main job – there are 1.1m people in the UK.
These people need what you offer. And Covid-19 has unfortunately brought a wave of redundancies – but ones where people have taken their settlements and invested it in creating something new.
These are very uncertain times but – counter-intuitively – uncertainty creates opportunity. You can be there waiting. This can be your time to shine. If not now, then when?