What You Need to Know About Starting Your Own Bookkeeping Practice

Sam had acquired a basic understanding of bookkeeping – either getting a diploma in bookkeeping from a local college, or practical experience in an office working for someone else. She was searching for a new path for herself and had a dream to start her own business.

However, when she first became our client, she was overwhelmed, frustrated and maybe even a little scared. She knew there were lots of things to do but she was unsure how she should move forward – what were the correct first steps she needed to take so she could build her very own successful bookkeeping business.

She needed a logo, business cards, a computer, software, scanner, printer, business phone number, email address, website – the list went on and on.

She sent us an email that we felt was so reflective of many start-up clients we worked with that we saved it. Here’s the gist of it:

 “I just don’t know where to find clients and if I find somebody, how will I know they are the right client for me? I know I should probably be selective, but I have bills to pay so I can’t afford to turn away business. Worse still, what if I can’t find enough clients? Where do I go looking with no money to spend on advertising?”

“How will I handle my client demands and meet all their deadlines if there is just me in the business at the start? What if everyone asks for everything at once? How do I make sure I deliver the work on time? How will I know how much I should be charging them for the work? How can I put together a plan to make sure I stay on track? And with the incredible speed of changing technology how do I keep up? What apps do I need to learn to best serve my clients?”

Please help.

Sam

Since we started Kninja Knetwork – our education, training and support community for Bookkeeping and Accounting professionals – and achieved the honour of being named Intuit’s Global Firm of the Future, we’ve received lots of good questions like Sam’s. Following our mission to “Educate and Empower”, we want to do whatever we can to help people get into this essential and rewarding career of bookkeeping.

Build flexibility into your planning process

Everyone tells new entrepreneurs to establish a long-term plan, and while it is important to have goals and a vision of where you want to go over the next few years, we strongly encourage all new businesses to take the time to map out your goals, strategies and tactics that will move your practice forward in an easier to manage format of 90-day increments.

Think of your professional career like a roadmap. You can imagine those bright shining lights in the distance, that destination you want to reach far off on the horizon. But, on the journey to reach it there will be lots of bumps, turns, forks in the road, construction and even detours that you will need to navigate and manage so you can still reach your destination over that horizon.

Almost any journey is easier when you break it down into smaller “bite-size”, easy-to-digest pieces.

Navigating your entrepreneurial journey and building a successful business is very similar.

When we first started out on our own journey we didn’t know that. We didn’t know you should create quarterly plans. We had never even heard of 90 day plans. We had to learn it through trial and error, hard work and by surrounding ourselves with some very smart people. Once we figured it out, we have never stopped the process. Even now, at the beginning of each new quarter we sit down and make a plan for the upcoming 90 days.

Building flexibility and focus by creating shorter-term goals and strategies allows you to focus on the goals ahead while still maintaining the flexibility you need as an entrepreneur. It is also important to remember that achieving the goals you establish is not the most important point. It is the act, the habit of taking the time every quarter to establish that plan and those goals that will help to keep you on track towards success.

Another trait that many startup entrepreneurs experience is the concern as to where they will get their clients and grow their client base. You may think that when you are getting started that you will serve small retail businesses, and then you discover that you are getting a lot of inquiries from dental offices asking for your help. The specialist is always able to earn more money than the generalist so it is important to realize early on that if you specialize a little more in one industry sector, you will be able to secure a bigger piece of the client pie and in turn charge a higher rate as a specialist in that particular sector.

Consider how Cloud can break down geographic barriers

It is also vital for the modern bookkeeper to be conscious that geography does not have to be a barrier to expanding your client base today, and that is why newcomers in bookkeeper training need to focus on how to grow their Cloud bookkeeping practice.

There are many advantages to cloud bookkeeping with expanded geographic reach being just one. Since you no longer need to be at the client’s place of business to do the work and communication tools like video conferencing (Zoom, GoToWebinar, etc.) make it possible to have face to face meetings from any location you can literally have clients as far away as you want from your physical location.

Cloud bookkeeping provides increased automation of data entry with bank feeds and tools such as Receipt Bank. It also allows improved lifestyle as you have greater flexibility as too when you will actually do the work.

People asking us about cloud bookkeeping and how do we get started are some of the reasons that prompted us to continue our vision of ensuring bookkeeper education was available at many levels and extended well past receiving a basic diploma. We saw a need to combine our small business experiences to provide continuing education that could be delivered online and allow new entrepreneurs in our industry to learn as they launched their businesses.

With that in mind we developed a series of Kninja Programs to provide training for bookkeepers to run successful businesses from the start-up stage through to development and maturity.

The initial offering in our continuing program is called “Startup Susie,”and it is designed to help new bookkeepers to get started by taking the right steps at the beginning of the journey. We have always believed the greatest investment you can make is to invest in yourself. And, that is our hope with these programs.

Important things to know before you open your business

We knew from our own experience how important it was when starting a bookkeeping practice to do it the right way. What we cover in this course are many of the essential things that we wish we had known when setting up our first business many years ago;

For example, it teaches bookkeepers how to set up processes to ensure all your client deliverables are met, as well as how to secure the best Apps and tech stack to make your workday easier.

Responding to one of the most frequently asked questions received through our Kninja education website, we also built an entire lesson about the all-important issue of how to handle pricing your services so you can maximize your profitability and actually get paid what you are worth.

What do you charge for your bookkeeping services? Do you bill by the job or by the hour? Do you offer financial incentives for people who sign long term contracts with you? How do you begin learning about value pricing? At the foundation of the whole issue of pricing is the reality that you need to maximize value to your client while doing the same for yourself. This is a delicate balance since most of us are uncomfortable discussing price but it is something you must find a comfort level in doing.

We also understood keenly from our own experience how vital it is to get everything done in those early days of business, and yet still maintain some semblance of balance in our lives. We didn’t know how we could create shortcuts and processes for ourselves, but we learned that as time passed. We also thought it would be helpful in our courses to include templates, checklists  and helpful resources to help you hit the ground running. You can find many of these resources here at our website – including a number that are completely free of charge.

How will you measure your success?

Whether you are running a business to serve your local community or starting a Cloud bookkeeping practice to look outside your geographic borders, you need to measure your metrics. But, it is not only about how to measure, but more importantly, what to measure, so you know where you are at any given point is where you need to be to survive and grow your business.

In designing and creating these programs we tried very hard to help bookkeepers avoid making the same mistakes that we did. We speak from a deep, convincing place of knowing what it is really like to do what you want to do, and the authenticity of our advice is what our participants most appreciate.

We know that what you want to do is both important and rewarding, but not easy. The shadow of statistics about small business starts looms over us all. Our government agencies tell us that  starting a small business is one thing; making it succeed and sustain you over the long term is another entirely.

Survival rates for small and medium-sized businesses decline over time. About 85 percent of businesses survive one full year, 70 percent survive for two years, and yet only 51 percent survive for five years.

One of the biggest reasons half of all small businesses fail within five years is that the entrepreneur has the passion and energy to enter the business world, but they don’t understand all the strategies that can help them keep up and surpass their competition.

Slow learning doesn’t work in a fast-paced world

There was a point in history where you had time to learn the hard and slow way, but with the pace of business turned upside down with technology, the learning curve has to move much faster or your mistakes can bring you down.

One of the best ways to combat that is to find knowledge wherever you can and never, ever stop learning. Take a course from someone who has the benefit of experience in establishing a successful business. Hire a coach, find a mentor or join a mastermind group. All will help you. Although you are sure to make mistakes of your own, learning from other’s mistakes will definitely put you ahead of the curve.

Even if you are already busy setting up your business, if you can make the time to dedicate a few hours a week to an on-line course, it can help you avoid many of the pitfalls that hit you when you least expect them.

In Startup Susie (it could also be a Startup Sam since the program is designed for all sexes ☺) you will learn such insight of your industry as how to identify the clients who will be best for your business and where to find them, where to get the best technology to help you overcome the growing pains of your business, and techniques to tell if you are on track with your goals.

One thing we do want to emphasize, and that is who this program is not for. This course does not teach you basic bookkeeping skills – debits and credits. You should already possess those skills before you begin this program. This program is designed for those that want to start their own bookkeeping practice and don’t know how to get started.

You can learn more about starting a bookkeeping practice here.

 Thank you for taking the time to read this information. Until next time, take care.