A new accounting business can go in a number of directions. Tax preparation is the big, once-a- year business opportunity for an accounting firm. Many small accounting firms – one to five person shops – will work twelve hour days, and even longer through March to mid-April during tax season. For some, it’s probably like Christmas for a retailer: the season carries them through subsequent slow months.
Tax preparation as a profession has gotten a lot more time-efficient with the advent of tax preparation software. Most accountants have moved beyond the consumer-level Turbotax or Taxcut products to more sophisticated accounting programs. It’s then a matter of plugging in the figures provided by the client, helping make decisions on itemization, and dividing taxable from non- taxable expenses.
Small accounting businesses can handle an extraordinary number of tax returns these days. That is one reason for starting an accounting business: everyone has to pay taxes once a year. A good accountant can build a customer base that is all he can handle for tax season and most will return each year. It’s a retail level business with a guaranteed clientele.
Accounting is a business that builds its clientele on personal relationships. Timely, friendly service will keep tax customers coming back. Building an accounting business that provides accounting services for existing businesses requires some marketing and footwork.
Probably the best investment for a small accountant is an ad in the Yellow Pages, as that is where much of your unsolicited business will come from. The rest will probably come from personal referrals. A new accounting business can invest in some direct mail to introduce the firm. You can purchase mailing lists of businesses by zip code and put out a letter or brochure introducing your firm and your services. Send your mail to the CEO, NOT the accounting department. Follow up your mailing with a telephone call to see if you can get in the door for an introductory meeting.
For a new business, professionally done presentation materials are a good investment. Prepare a sheet with a biography and photo of yourself, highlighting your credentials and experience. Prepare another sheet, or brochure, that illustrates the potential cost savings of outsourcing accounting services. Write a personal cover letter to the person you’re meeting or hope to meet. Put it all in a two or three color folder with the name of your firm on it and mail it – or hand carry it, if you’re going to a meeting. Never run out of business cards.
For a small, new accounting firm its phone work and footwork. If you do enough of it, you’ll get some response. So one of the things you want to do before you open your doors is decide how much business you want. Can you handle the books for two firms? Three? Remember that a tax practice blows a big hole in the schedule every year.
There comes a point for every small business when the owner will have to hire an employee in order to continue growth. Perhaps the toughest decision for any small business is when that cycle of growth reaches a point of diminishing returns – when the additional income doesn’t pay for additional staff or for the headaches that always accompany success.