Bookkeeping Franchise?

[Dogsbody]

Hello,

I hope that this will not electronially 'step on anyones toes' but may I ask about your views on bookkeeping franchises please?

As my previous posts testify I started a business with my daughter approaching 2 years ago and not only has she done well, but it has been partially instrumental in me deciding to take early retirement in the near future. As I will still need to do something to 'get me out of bed' I looked into the franchising model. This was something we looked into with my daughters business but for fairly unique reasons it wasn't suitable, so we started it all up from scratch.

I attended a recent franchise exhibition and had a number of areas which interested me, several have bitten the dust as a result of discussions (including two which went quite some way along the investigations into them), but one which I didn't initially think would necessarily interest me has caught my attention and increasingly seems to fit my situation.

It is the bookkeeping franchise.

Is this really an area suitable to franchising? I've noted many posts on here with OP's starting up on their own after, in some cases years of training, and here I am considering a system which advertises no experience needed. Is this realistic? Also there are obviously a lot of qualified people in the market, with some saying it is a saturated market, so why should an unqualified upstart (me) come in and aim for work that they maybe unable to get?

I realise that I have more investigations I need to undertake, but I would appriciate some of you qualified people on here commenting on the whole idea?

Many thanks (and apologies if this post is too lengthy).

 

[E Storey]

There are a number of bookkeeping/accounting franchises out there, some that come to mind are tax assist, my local bookkeeper and elaine at cheap accounting.

It can be quite a big initial outlay and if you really do have little or no experience I would recommend you partner up with someone who does.

It is perfectly possible to start up on your own, income will be slow for the first year but I can throughly recommend it as a satisfying and self esteem building experience.

 

[elaine@cheapaccounting]

To clarify - you have no bookkeeping experience at all?

Some franchises do take raw recruits and provide training - of course fees for these are much higher. What is your budget?

Just to say - I don't take raw recruits but good luck with your search.

 

[Dogsbody]

Thank you 'E Storey' and Elaine.

Elaine - yes, you got it right - no experience at all other than a spreadsheet for our own (very) small business.

I had no budget expectations, but the two franchises I saw had requirements for £10k and £15k. That includes an element of training and ongoing support.


That you both again.

 

[Bob]

no experience at all other than a spreadsheet for our own (very) small business.

I had no budget expectations, but the two franchises I saw had requirements for £10k and £15k. That includes an element of training and ongoing support.


That you both again.

I am sorry but, in that case, I would not have thought that this would be a good route to go as your clients will expect you to be able to advise them on technical matters. Might be sensible to have a look at taking a bookkeeping qualification first

 

[elaine@cheapaccounting]

I would check out the training and support in detail. Put yourself in the shoes of your first client (s) - what services will you provide, how much will you charge, how will you get the knowledge to deliver the service, what will you do if they ask you a question that you do not know the answer to etc etc

Remember that if you get it wrong it is the client that could suffer - see the penalty regime from HMRC.

Sorry if this sounds scary but IMO it is best to look at the full facts before you invest.

 

[Dogsbody]

I would check out the training and support in detail. Put yourself in the shoes of your first client (s) - what services will you provide, how much will you charge, how will you get the knowledge to deliver the service, what will you do if they ask you a question that you do not know the answer to etc etc

Remember that if you get it wrong it is the client that could suffer - see the penalty regime from HMRC.

Sorry if this sounds scary but IMO it is best to look at the full facts before you invest.

Very true on all counts, and just the sort of 'back to reality' check that is needed.

Thank you very much for your input, I really do appriciate it. It is just these sorts of questions that I need to be putting to the franchisors.

Thanks again.

 

[kjmcculloch]

What makes you fancy the franchise route rather than starting a business from scratch?

Kris

 

[Dogsbody]

What makes you fancy the franchise route rather than starting a business from scratch?

Kris

Hi Kris,

Basically it's the head start and the hand-holding, especially in a sector that I currently have no experience in.

I'm not adverse to starting a business, as I have with my daughters, but it's the experience issue that is the most problematical at the moment.

Thanks for your time.

 

[S-Marketing]

What makes you fancy the franchise route rather than starting a business from scratch?

Kris

Personally I can't think of any positive reasons for going for a bookkeeping franchise.

 

[S-Marketing]

Hi Kris,

Basically it's the head start and the hand-holding, especially in a sector that I currently have no experience in.

I'm not adverse to starting a business, as I have with my daughters, but it's the experience issue that is the most problematical at the moment.

Thanks for your time.

How exactly do they hold your hand? How do they help you get over your inexperience?

 

[kjmcculloch]

My advice would be to look at doing a training course with the ICB. That will get you qualified, and access to the support provided by a professional body. Ideal School offer level 1 and 2 by home learning for £400 or 1,2 and 3 for £600. Either would allow you to get a practice license without giving away a percentage of your income every month.

Kris

 

[kjmcculloch]

Personally I can't think of any positive reasons for going for a bookkeeping franchise.

There are a few, but I think there are far more drawbacks.

Kris

 

[Dogsbody]

How exactly do they hold your hand? How do they help you get over your inexperience?

Thanks for your input Stretchy.

In answer to both your questions I don't really know yet as I've not had the opportunity to research this in sufficient depth. However with the franchise system there is a support element to them all and this is specifically mentioned in the little literature I have about this one. Similarly they quote that no experience is required, but that does give rise to the previously raised question of credibility with potential clients with a query.

Obviously points to give very serious consideration to, and get answers to!

 

[Dogsbody]

There are a few, but I think there are far more drawbacks.

Kris

Thanks Kris, but now you have me begging for more...!

What drawbacks do you see from your qualified perspective? Obviously, not being qualified, I can't hope to know the problems or issues that this (franchise) model has. I would really appriciate your thoughts, so that I can put some well thought-out queries to the franchisor.

Many thanks.

 

[kjmcculloch]

The obvious benefit is in marketing, but many of the franchises are still small and unknown. The biggest drawbacks, for me, are cost (initial and monthly), lack of control of your business and the chance that someone else can damage my business.

Can you imagine if another bookkeeper of the franchise was charged with fraud, or even more basic offered a bad service. The reviews would be about the franchise name, not the individual.

For me it's just like going back to having a boss, and that's the very reason I'm self employed.

It is horses for courses though.

Kris

 

[S-Marketing]

The obvious benefit is in marketing, but many of the franchises are still small and unknown. The biggest drawbacks, for me, are cost (initial and monthly), lack of control of your business and the chance that someone else can damage my business.

Can you imagine if another bookkeeper of the franchise was charged with fraud, or even more basic offered a bad service. The reviews would be about the franchise name, not the individual.

For me it's just like going back to having a boss, and that's the very reason I'm self employed.

It is horses for courses though.

Kris

People always seem to quote marketing as an advantage of franchises. In fact having a franchise gives you a huge marketing disadvantage.

 

[kjmcculloch]

It depends very much on the franchise. In bookkeeping I think the big franchises (The Local Bookkeeper and TaxAssist) do have marketing advantages.

Kris

 

[S-Marketing]

It depends very much on the franchise. In bookkeeping I think the big franchises (The Local Bookkeeper and TaxAssist) do have marketing advantages.

Kris

No, I'm still not seeing it. Any bookkeeping franchise will give a competitive disadvantage, not an advantage.

How much do these franchises cost anyway? I could get a bookkeeper enough clients to be able to work full time for between £800 and £2000. Id also guarantee the results for the latter. So how do these franchises justify the difference between my price and theirs?

 

[Strontium Dog]

Where the franchisee is not an experienced bookeeper, I would think that the franchise will expect them to employ experienced bokeepers.

The role of the franchisee will be to build up the clientele using the methodologies supplied by the franchisor.

I dont think they're expected to become expert bookeepers, just be able to build a client base.

I would still be wary about going the Franchise route though, for reasons others have stated.

Cant you pick a business sector you have some experience in already ?

 

[elaine@cheapaccounting]

People always seem to quote marketing as an advantage of franchises. In fact having a franchise gives you a huge marketing disadvantage.

can you clarify why please

 

[Jenni384]

£10k will buy you a hell of a lot of your own, targetted marketing. I'm not sure the trade off between spend and "hand-holding" is worth it - as I'm really not sure what kind of hand-holding a franchise would provide, certainly for a complete beginner. £10k would also get you qualifed, and leave some spare for marketing.

If you're not experienced, then no amount of money is going to fix that.

I'd also be very wary of franchises for professional areas that state no experience needed - how are they going to overcome that, other than as SD says, make you employ someone who is? Or are they going to send you on a week's training course and unleash you on the public? Neither is really ideal for someone who wants to build a bookkeeping business.

The only franchise type set-up I'd ever consider would be Elaine's.

 

[Homshaw]

If you know nothing about it you will struggle by yourself. You wouldn't even realise the issues and even a straightforward matter might not be all in seems.

A lot of these franchises will say anything to get their hands on your money

You might stand an outside chance if you linked up with an accountant so you get guidance and he gets neat well prepared jobs to work on. Try a small accountant just out of your area. He might be interested

However it's usually better to play to your strengths and experience and if you know little about accounts and bookkeeping I would avoid it

 

[DFL]

Bookkeeping franchises, like anything, have some advantages and some disadvantages which you should weigh up to see whether hooking up with one suits your business aspirations.

Advantages

Support, proven model, marketing clout, handholding

Disadvantages

Initial outlay, % of revenue (not profit) hugely expensive, restrictions, your name can suffer due to actions of others

In your position you have no experience so you will need to gain an initial understanding of the basics of bookkeeping, VAT, and maybe CIS and PAYE. If I were in your shoes I would get the knowledge in those areas then target the small business market, go for businesses with low transactions, not complex, and under a turnover of say £100k. Go for plumbers, electricians, hairdressers etc - one or two man bands that you know that you could service. Deliver the service exceptionally and get the referrals of other similar businesses.

These type of businesses are relatively straightforward to service but make sure that you have a back up plan for support - speak to a local accountancy firm to see if they would be willing to offer chargeable support for you / review your work etc.

Then build up your business, build up your knowledge and experience, invest in further knowledge attainment and grow your business.

 

[Homshaw]

Just about to put my business on the market and do something else.

I don't think its worth the hassle and I'm qualified.

A franchise will take time to get of the ground. You will lose money the first year and it will take time to earn even a modest living.

If you only do bookkeeping it is a lot harder to build a business than offering a full accountancy and taxation service because people get the accountants to do it. Bookkeeping only jobs are harder to come by

With no experience in the area you could find it difficult. Sign up to a franchise and if it doesn't work out it can cost you a worrying amount of money.

 

[David Griffiths]

what is the best software used for franchise management. what are the metrics that are used for evaluating franchise?(in detail)

Five identical posts. Homework question, is it?

 

[Tony221268]

My simple answer to this whole q&a about why take a franchise.

I would point to the fact that franchises have a very high success rate, much higher than a normal start-up. Google the stats...

The brave/ foolhardy will probably take a more adventurous route...fair enough, we all make choices.

And on the question of who makes the best franchise software

Five identical posts. Homework question, is it?

We do @franchise 360. We also do franchise software for Bookcheck who are a very good bookkeeping franchise based in Stroud.

 

[TaxAssist]

The Local Bookkeeper look like a good franchise and I've met a few people from there. There are a couple of others too.

TaxAssist Accountants are not a bookkeeping franchise just to clarify.

 

[kjmcculloch]

TaxAssist Accountants are not a bookkeeping franchise just to clarify.

Sorry for the confusion

 

[mauahmed]

I cannot believe book-keeping franchise is a good way of going forward. I would better invest more on marketing my self.

 

[TaxAssist]

I cannot believe book-keeping franchise is a good way of going forward. I would better invest more on marketing my self.

I guess you would never know which is the best route because you can't do both at the same time but a franchise gives you the chance to get the business off the ground faster and has systems and bulk discounts that should benefit in the long term. It takes a business a while to go from 0 clients to many clients and failure rate is very high in year one.

 

[elaine@cheapaccounting]

I cannot believe book-keeping franchise is a good way of going forward. I would better invest more on marketing my self.

depends on how good you are at marketing.

There are some accountants who do not have a clue about marketing

 

[Bob]

There are some accountants who do not have a clue about marketing

Elaine is not one of the ones that doesn't have a clue about marketing

 

[elaine@cheapaccounting]

Elaine is not one of the ones that doesn't have a clue about marketing

thank you very much Bob

 

[InPrintImaging]

If you don't know anything about bookkeeping, you shouldn't be starting a business in it. You need to do a few years practical experience and work your way up through the ranks in an accounts practice or similar. It isn't a game and I'm sure there are plenty of accountants out there who will tell you they have seen both good, bad and downright ugly in terms of bookkeeping. Once you know how to do the job, then you should be considering whether to run a business in it.

Its a bit like me trying to set myself up as a plastic surgeon, something I know nothing about, and then saying I'll learn it as I go along. What would be the likely impact of me doing something like that, other than to potentially ruin someones life and land me in court?

 

[Smallbusinessman]

A person needs training to become a bookkeeper. Why not take some courses at a local FE college in order to gain an understanding of bookkeeping and accounting records? One can work directly for small businesses or subcontract to local firms of accountants.