New Accounting Practice

[HMReynolds]

I have already seen that is some excellent advice on this website for new accounting practices, but I hope to get some comments / advice on my particular situation.

I currently work for a small accountancy practice and plan to go into business for myself next year.

(i) I don't have much savings, so I need the security of a job until my practice takes off, to cover the mortgage, etc.
Therefore I am hoping to start out working in my space time and on weekends, until I reach the critical mass, where these costs will be covered by my self-employed work.

(ii) My contract contains the usual clause about not starting up in business within 6 months of leaving the practice I work for.
I recognise that this is largely about protecting my employer's client base and I do not intend to poach any clients - But this could still be a cause of bad feeling. Therefore, I hope to generate my first few clients through networking as I don't want to advertise too widely to begin with.

(iii) I have only worked for one practice, so I am unsure about how representative the fees they charge are.
For example they might charge:
Large newsagent - £1500 for accounts and tax returns
Fish & chip shop - £900 for accounts and tax returns
Self employed person earning about £15k-£40k - £700 for accounts and tax returns.
I have worked out, based on the time to prepare these, that this equates to about £50/hour of my time.


H.Reynolds

 

[Philip Hoyle]

My first impression is that those fees quoted are on the high side for a one man band.

You may have to come down quite a bit to be competitive against others like yourself especially without a solid reputation behind you.

Eg, basic sole trader accounts/tax are often offered at £150-£300 from sole practitioners.

 

[elaine@cheapaccounting]

A couple of things for you to read:


Starting an Accountancy Practice - Are there enough hours in the day?
http://www.cheapaccounting.co.uk/bl...practice-–-are-there-enough-hours-in-the-day/


Just How Do You Start An Accountancy Practice?
http://www.cheapaccounting.co.uk/blog/index.php/just-how-do-you-start-an-accountancy-practice/


Good luck - A few of your Associates have tried starting out and doing in part time and found it almost impossible.


There may be others articles of use here:
http://www.cheapaccounting.co.uk/blog/index.php/category/accountants-area/

 

[MyAccountantOnline]

I have already seen that is some excellent advice on this website for new accounting practices, but I hope to get some comments / advice on my particular situation.

I currently work for a small accountancy practice and plan to go into business for myself next year.

(i) I don't have much savings, so I need the security of a job until my practice takes off, to cover the mortgage, etc.
Therefore I am hoping to start out working in my space time and on weekends, until I reach the critical mass, where these costs will be covered by my self-employed work.

(ii) My contract contains the usual clause about not starting up in business within 6 months of leaving the practice I work for.
I recognise that this is largely about protecting my employer's client base and I do not intend to poach any clients - But this could still be a cause of bad feeling. Therefore, I hope to generate my first few clients through networking as I don't want to advertise too widely to begin with.

(iii) I have only worked for one practice, so I am unsure about how representative the fees they charge are.
For example they might charge:
Large newsagent - £1500 for accounts and tax returns
Fish & chip shop - £900 for accounts and tax returns
Self employed person earning about £15k-£40k - £700 for accounts and tax returns.
I have worked out, based on the time to prepare these, that this equates to about £50/hour of my time.


H.Reynolds

I was where you were many years ago and first of all I wish you the very best of luck - it was the best move I ever made but a huge reality check running your own practice.

Its a nice idea trying to work part time and run a practice but I have to agree with Elaines comments it doesnt work in my opinion either. My view give the practice 100% if you really intend it to be a sucessful business.

AccountingWeb may be helpful to you - do some searches on setting up a practice etc.

You have so many things to consider but one really important one is to really think about what clients types you are going to target and how you intend to get clients. Traditional networking is a long haul and not in my opinion enough if you want to build a practice quickly.

I agree with Philip too regarding fees - thats very expensive in todays market.

Again very best of luck to you

 

[Strontium Dog]

I disagree with some of the other comments on fees. Decide what level you want to charge and stick to it. BUT - be prepared to justify why you are charging more than the firm down the road.

I dont necessarily agree with the fact that one man bands working from home should be cheaper as you have no overheads.

I think you should be more expensive as clients get your personal attention !

It all comes down to positioning.

 

[Jaydee]

I agree with Strontium Dog - but this forum is always skewed far too much towards lowering accountancy fees and the "am I paying too much for x service from my accountant".

Very rarely do you see someone happy to pay more but still see that they have ended up with value for money.

My stance has always been - quote the fee that you want for the service, and accept that some will not come on board, but it is better to get two clients at £500 and not win one, than it is to quote £300 and get all three.

Self employed person earning about £15k-£40k - £700 for accounts and tax returns.
I have worked out, based on the time to prepare these, that this equates to about £50/hour of my time.

To the OP, my concern here would not be the fee (although it may be a little top heavy) but your perception of time to do the job.

With the correct software, a £15k to £40k sole trader should be nearer 2 hours than 14 hours, and the improvement that that gives to your hourly rate goes towards covering your inevitable non-productive time.

 

[mr. mischief]

If you are going to charge higher fees then you need to clearly and without jargon explain exactly why your clients should pay more. My personal mantra is "You are the MD, I am the FD" - which works especially well in presentations and meetings where you can extend your hand to the audience on MD and back to you on FD.

But this means really putting your client in charge, not just saying it. An FD looks forward as much as back, saves the business money in the year ahead and comes up with ideas to get in more sales. I've not done all of this for every client, but I've done most of it for most clients - and my average client satisfaction score is 97%.

At networking events, most accountants around here get up and in their 2 minutes they say "We do tax returns, we do annual accounts, we do cash flows, we do VAT returns."

And I think, great. Of course you do, you're an accountant.

Then it's my turn - 3 main messages:

1. Strictly fixed price accountancy.
2. You are the MD, I am the FD.
3. Thinking about the future not the past.

With one visual aid - the colourful charts which are a standard feature of all accounts I issue. The message is clear - your relationship with me is going to be very different to other accountants.

So using this you are going to win lots of good clients, all you have to do is deliver on the promises. Really put your clients in charge. Answer all the questions, provide breakdowns on any number they query - because that is the role of an FD.

This can be done very cost-effectively because you'll have chosen "best of breed" systems to do the accounts with, no daft schedules with lots of manual adjustments for you, right? Which frees up your time to answer the client queries properly, right?

Year 1 can be quite tough this way as with some clients there are a lot of queries, espeically if their previous accountant just dumped the final accounts on them and that was that. But you've now won their trust, they'll have had conversations with you they'd never had with previous accountants and they'll tell their friends.

If I get 9 out of 10 from a client on the survey I am asking what I've done wrong, which is a bit silly - I am just used to getting 10 out of 10 for all the categories of price, quality, communications and delivery.

Good luck. You won't need it if you think about what your clients want from an accountant that they currently can't get in your neck of the woods - then communicate that to potential clients - then deliver it!