an accountant business plan

How To Write a Winning Accountant Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for accountant businesses who want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every accountant business owner should include in their business plan.

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What is an Accountant Business Plan?

An accountant business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write an Accountant Business Plan?

An accountant business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Accountant Business Plan

The following are the key components of a successful accountant business plan:

Executive Summary

The executive summary of an accountant business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your accountant company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your accountant business , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your accountant firm, mention this.

Industry Analysis

The industry or market analysis is an important component of an accountant business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the accountant industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the customers of an accountant business may include small business owners, individuals with complex financial situations, or other businesses that need accounting assistance.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or accountant services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or, you may promote your accountant business via word-of-mouth or referrals from satisfied customers.

Operations Plan

This part of your accountant business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for an accountant business include reaching $X in sales. Other examples include adding new products or services, expanding to new markets, or opening new locations.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific accountant industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Accountant Business

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Accountant Business

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup accountant business.

Sample Cash Flow Statement for a Startup Accountant Business

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your accountant company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

The goal of any business plan is to provide a roadmap for the future. A winning accountant business plan does this by providing a detailed overview of your company, its operations, and its financials. If you are seeking funding, your business plan should also include an appendix with your full financial projections and supporting documentation.  

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How to start an accounting firm: Your checklist for successfully starting a firm

So, you're thinking of starting an accounting firm.

That's great. No doubt you have plenty of questions about how to set up a new firm and get off to a great start.

Thomson Reuters spoke with some of our industry experts to get answers to the big questions you may have.

Here's what they told us.    

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Starting your own accounting business sounds like a lot of work. Why would I want to start an accounting firm?   

Starting an accounting firm is like starting any small business – it requires a lot of work. However, industry and consulting firms list accounting firms as one of the single most profitable small businesses a person can start right now.

Here are a few questions to consider when starting a firm:

• Do you want to be a cog in the machine or own a firm? Frankly, there isn’t a wrong answer to this question, but rather a preference. However, going out on your own comes with one significant benefit: you’re getting the profit from the firm, not just your wages. You go from employee to owner.
• What’s my business purpose? While perhaps a bit esoteric, defining your business’s purpose is crucial. Why am I doing this? What’s my goal behind this? It’s not just a philosophical exercise. Knowing why you’re starting a firm can help you define your target market, whether it’s helping small businesses, real estate, or another service area.
• Do you want to be nimble and cutting edge? Small firms tend to be much more agile and have a greater ability to do new things. From adopting new technology to discovering and implementing new software or other efficiency creating tools, running your own firm lets you make the decisions about what makes your business unique—and profitable.
• Should you start a legal entity? For some, a sole proprietorship won’t require incorporation – especially if the work is centered around less complex tasks such as basic tax preparation. However, there are certain liability protections by becoming an LLC, including limiting risk for your business. Assets become owned by your business and are distinguished from personal assets. When a business is not incorporated, it becomes harder to draw that line and the entire enterprise becomes at risk.

What are the requirements to open an accounting firm? What do I need?

Starting an accounting firm is no different from starting any other small business. And while there are accounting-specific requirements, it’s important to remember that you’re starting a business first.

Start by figuring out your purpose, goal, and market. This will influence many other decisions, including the function of the services you provide, whether you want a physical or virtual location, your target demographic, and the location of your business.

Once you’ve selected a location and determined your goals, it’s time to consider the nuts and bolts of owning a business.

You’ll need to:

• Obtain Employer Identification Number (EIN) and Tax ID number
• Investigate employment laws
• Determine startup costs
• Develop a pricing structure for services
• Decide on the legal structure of your business (S-Corp, L-Corp, LLC, Partnership, LLP )
• Look at business insurance
• Create a business bank account
• Develop internal policies and rules
• Hire employees

Additionally, you’ll have to think about the day-to-day needs of running a business, including managing risk, basic administrative tasks, and general questions of how and where you will meet clients. 

Will I need to get a new EIN from the federal government ?

In most cases, owning and running an accounting firm necessitates an Employer Identification Number (EIN). However, the IRS website provides an in-depth explanation of who is required to have an EIN and when. A good rule of thumb is: if you plan on hiring employees – or plan to in the future – you’ll probably need an EIN.

That said, even if you don’t think you need one – or the website says it isn’t a requirement– most businesses are probably better off acquiring an EIN.

Luckily, the online process is fast, easy, and free. 

If I’m not a Certified Public Accountant, do I need a CPA to open an accounting firm ?

It depends.

While all CPAs are accountants, not all accountants are CPAs. There are differences between the two, including education, experience, and certain opportunities. However, the answer goes back to the question, “What services do you want to offer?”

An accounting firm can do almost everything a CPA firm can do with one exception – audits and assurance services. So, if that is a part of your goals or your target market, then it’s probably wise to think about the steps needed to become a CPA.

However, if you are looking to focus on the multitude of other services accounting firms provide, it’s likely not a necessary credential to start. And while there are certain state-by-state exceptions about what can and cannot be undertaken by a CPA, they are not a requirement for starting an accounting firm.

However, if you want to call yourself a “CPA firm” – you will need a CPA.

Can accountants work from home ?

One of the benefits of starting an accounting firm is flexibility. So, the simple answer to the question is, yes—many accountants can and do work from a home office.

All the regulations that apply to a physical location also apply to virtual or home offices. So not having a physical office does not put an accounting firm at a disadvantage.

In fact, working from home is even easier with modern technology and software solutions that help bring vital aspects of your daily workflow into one dedicated (and usually online) space. For instance, Thomson Reuters makes its CS Professional Suite of tax and accounting software available as hosted online solutions and designed its Onvio products to run entirely in the cloud.

It’s important to note: an accounting firm must have a dedicated EFIN (Electronic Filing Identification Number) for every separate location where they perform work. So, if you have a physical location and do work in a home office, you’ll need to investigate whether you’ll need a separate EFIN for home office.

The answer largely depends on how much – and the extent of the work – you do from home. Check with the IRS for further guidance. 

If I’d prefer a home-based accounting business, what should I know about starting an accounting firm from home ?

Luckily, accounting firms don’t need a physical space to operate successfully. And like the traditional brick and mortar approach, having a home-based or virtual business brings both opportunities and challenges that are unique to that approach. When considering a home-based business, it’s important to think about the unique challenges and opportunities involved.

These include:

• Shared work locations. There are many co-working locations across the country, many of which include both space for professionals to perform their tasks, as well as providing a professional, on-demand space to meet with clients. While there is usually a monthly fee to use these spaces, the benefits they provide are often worth the cost (and are significantly cheaper than leasing or purchasing office space).
• Low costs. New businesses often struggle with overhead. As you build your client list, keeping costs low is a priority. Not only does it allow you to see a profit early, but it also allows you to adjust your service menu to attract clients with lower-than-normal prices.
• Liability issues. If you choose to meet clients in your home, liability and zoning can be an issue. If a client gets hurt inside your home office, or falls outside of it, it’s important to know the laws surrounding liability.
• Zoning laws. Most cities and counties have zoning regulations. Make sure you investigate and comply with any laws to ensure your home-based business isn’t operating illegally.
• Turn limitations into unique opportunities. While not having a physical space can be challenging at times, it can also be an advantage. Consider visiting clients onsite. Not only does it solve space concerns, it communicates a message to the client—you offer a higher level of service.    

What are the key services offered by accounting firm s? 

In many ways, this question can be answered by once again looking at your goals and target market. What are the key services needed by that population? How can you serve them better? Still, while many services will be dictated by the specifics of your clients and their business, there are a few standards most accounting firms offer, including:

• Assurance services
• Bookkeeping

While these are typically the core offerings – and the ones that will provide consistent business in most accounting firms – it’s also important to investigate emerging and buzz-worthy services that are attracting bigger and more progressive accounting businesses.

From consulting and advising to outsourced CFO services (serving as the embedded strategic financial decision-maker for a client), taking a cue from the bigger firms – and anticipating what trends might trickle down to smaller and independent businesses – can increase the clients you serve and put you steps ahead of your competition. 

What should I know about running an accounting firm ?

Starting a business is filled with new and challenging decisions. However, once the business is up and running, it’s common to be unprepared for typical day-to-day operations. Anticipating (and planning for) these concerns helps make sure you’re working as efficiently as possible.

Common questions and concerns include:

• Talent acquisition and development. Frankly, finding and keeping staff is a significant challenge, which is why hiring always leads industry surveys about common needs and concerns. Even if you aren’t ready to hire a team, it’s wise to start developing a strategy early.
• Going beyond the seasonal business . Every year it gets harder and harder to operate a seasonal accounting business, especially if you’re looking to offer a variety of services. Unless you’re doing just cookie-cutter tax prep – and you avoid complex returns – you won’t be able to operate on a seasonal basis. That said, prioritizing the season and maximizing your efficiency (and your profits) during the heavy times is critical to finding success.
• Keep on top of regulatory changes. Keeping up with major regulatory changes can be a challenge – especially if you add staff. Finding a solution that helps minimize the burden and risk that otherwise exists will help stave off the constant onslaught of new information.
• Rethink the traditional role of the accounting firm. Traditional accounting firms used to meet with clients just once a year to do their tax return. More progressive firms are moving to a year-round schedule, which not only allows them to expand services for current and future clients but implies a partnership relationship that goes beyond the “one touchpoint” per year model. 

How much should an accountant charge per hour? Or should accountants charge a fixed fee ?

This, in many ways, is an unanswerable question because the only reliable advice that can be given is, “It depends.” Every context is different and is swayed by factors such as competition, location, service offerings, and level of expertise.

However, even though there isn’t a standard fee, most accounting firms are moving away from an hourly fee structure and choosing to institute to a fixed fee model that allows for better value for clients, a more manageable business plan, and eventually an increase in earnings.

Again, every context is unique, and there are certain situations when an hourly fee structure is best. These include:

• When you’re gathering information to develop a fee structure
• Gauging profitability in a newer firm and trying to determine the hours you need to work and remain profitable
• Early in your career when you need more time to complete basic tasks

Outside of those circumstances, a fixed fee is recommended and preferred. As your skill and expertise grow, so will your abilities to complete tasks quickly. With an hourly fee, this means having to take on more clients to maintain (and hopefully increase) your profits.

A fixed fee structure is about value. The expertise and skill you bring to service are of more importance than just an hour of work for clients. Pricing your abilities based on knowledge is not only good for your business but is ultimately valuable for your clients as well.

How should I price accounting and bookkeeping services ?

While there is still a debate surrounding hourly versus fixed fees in some aspects of the business, accounting and bookkeeping is not one of them.

Accounting and bookkeeping services (as well as other service lines, such as simple tax preparations) are almost universally charged as a fixed fee, and there is a market expectation for that pricing structure.

When determining a fee structure, many accountants call other firms and ask for quotes. They use the average of those quotes to determine a fair and competitive price for their services.

Another resource is local and national affiliations and associations. Many of the larger ones (such as the National Association of Tax Preparers) will distribute recommended price structures and other useful information. 

How much should a CPA charge for taxes?

While you do not have to be a CPA to prepare or file taxes, the training and expertise it requires to gain that credential matters. Simply put, you’re a CPA, and you deserve a premium for your services.

When trying to structure fees, it’s important to set a minimum job value. By setting a minimum job value at, say, $500, you won’t get mired in lower-level work that you likely don’t want to take on. Plus, that work can take up time and pull you away from more valuable work that you’d rather be doing.

Knowing what you want to charge and identifying the value you bring to your clients is critical. You are providing a service to your clients, but you’re also giving them a value based on your credentials and experience. So, it’s up to you to set the standards and have them choose between lower costs (them doing it their self) versus the value of having a CPA prepare your taxes.

That said, there’s a balance.

Many CPAs make a practice of “writing down” certain services because they know their hourly rate for larger projects can quickly become untenable for a client. Not only is this seen as a discount by the client, but it also allows you to create a fixed-fee structure for your services and show the clients the savings and value they receive.

If they need more staff, what do accounting firms look for when hiring?

When hiring, accounting firms are like many businesses and are looking for a combination of credentials, experience, and the ability to perform the necessary tasks. However, in an increasingly competitive hiring market, many firms are beginning to look at soft skills as valuable for new hires.

For decades, accounting firms have focused primarily on credentials. However, more and more, it’s less and less about certification and more about aptitude. For the most part, it’s easier to train accounting knowledge than it is to build customer service skills. When hiring, it’s important to look at the qualities a candidate can bring into a firm – not necessarily just credentials.

Of course, experience and credentials do matter. Especially when the experience sets for an accountant is specific and narrow. What types of tax returns have you prepared? What specializations do you carry? And credentials such as CPA, EA, attorneys, and state certifications (when required) are all still attractive to firms looking to hire.

How much does it cost to start an accounting firm?

Start-up costs can range from $2,500 to $25,000. Your location and your goals will determine cost in several ways, including whether you want to start a traditional brick and mortar firm or are looking to create a virtual office environment.

It’s important to remember that, besides physical (or virtual) space, accounting firms need to find and install the necessary equipment and technology to help their practice run more efficiently. That, in many ways, is the first step for a new entrepreneur. Once they’ve found a tax solution that can help them achieve their goals, they’ll be able to begin tackling the other day-to-day tasks and questions of running a business.

What’s the best business structure for accounting firms?

Finding the best business structure for your accounting firm is a critical part of not only ensuring success but helping to minimize both your tax burden and your risk.

While the circumstances of what your incorporation looks like will depend on your approach, it is considered a best practice to become incorporated right off the bat due to the legal protections it provides.

Popular options include:

• Partnership

If you’re running a solo firm, you’re likely going to be looking at an S-Corp, which allows you to pay yourself as an employee. However, if you are working with other partners, a partnership might be more preferential, as it provides a little more flexibility with payment. You are permitted to take draws or distributions, and it doesn’t necessarily require a payroll department because it’s not considered “wages” per se.

Whichever structure you choose at the beginning, know that it will likely evolve throughout the maturity of your firm. For instance, a firm might accept the risk and start as unincorporated to avoid the incorporation fees. Then they might transition to S-Corp. Over time, as additional owners move into the entity structure, the firm can add additional shareholders or can reorganize as a partnership.

It’s better to have a separate legal entity than to not and better to have separate federal filing than to not.

How do I get accounting clients?

The consensus is word of mouth. However, while a strong work ethic, exceptional service, and competitive pricing will undoubtedly attract clients, a successful business always requires more than just good luck.

Here are a few tips on how to increase your client base:

• Be a business owner, not just an accountant. This means focusing on solid business practices and looking for ways to ensure both stability and growth.
• Market yourself . This goes beyond starting a business and hoping people show up. Look for ways to partner with other companies and firms, as well as networking opportunities in the community. The local chamber of commerce is an excellent resource.
• Don’t forget about friends and family. While they won’t be able to maintain your business over the long haul, friends and family are a great starting place not only for initial clients but also for referrals.
• Take advantage of easy and cheap technology . Google Ads can be capped at $20 and make for productive investments to help drive local searches for accounting firm.
• Be in the community. Look for professional speaking engagements that you can offer to local groups for free. Create thought leadership presentations, teach community education classes and provide a venue to show your skills and knowledge.

You’ll find other ideas in our blog post on finding new clients .

How about social media and online presence for accountants – is it worth the effort?

Websites, social media, and various other online presences are a great way to establish credibility in the market.

For the most part, a simple online presence is relatively easy to start with minimal start-up costs. And while an online presence won’t guarantee an increase in exposure, not having one can have a negative impact and can discredit you to a potential client. In many cases, website and social media become an augmentation to your word of mouth referrals. Most people won’t simply call a number without the opportunity to do some basic online research.

However, there is a difference between a website presence and social media. In most cases, a website is static and allows businesses to transmit basic, evergreen information such as phone number, services provided, and credentials. Social media, on the other hand, can drive business in a longer and more indirect fashion.

Auto-posting any relevant story or information can help create a brand on social media – one where you’re seen as an authority on tax and accounting subjects. Posting constant content can help with visibility and, ultimately, increasing your customer base.  

If you think you may need help with this, take a look at our social media and other digital marketing solutions for accounting firms .

Some firms focus on a specific accounting specialization. Should I consider a niche accounting service?

Put simply, the more specialized you are, the more profitable you are. However, it’s not as much a question of “should you” but “can you.”

Many – if not most – firms will start as generalists and then slowly make their way a more niche practice. Sometimes a firm will intentionally build clients in one area. Others realize they have, say, many construction clients and then move to the particular niche.

If moving toward a niche practice, consider:

• What’s your timeline? When should you plan to transition to a specialized practice? When is the right time to stop chasing general clients?
• Partnering with more generalist firms can help take on other needs from clients while you take only the niche side of their business.
• Gaining professional affiliations is important. They can help distinguish you in a competitive market and further signal your niche work.

What’s the most popular accounting niche?

Niches, like many things, are often dependent on location, interest, and understanding where there is a need across different businesses. However, some of the most successful niches are the ones serving fellow professionals such as doctors, dentists, attorneys.

Services based niches as opposed to manufacturing-based are also on the rise. For example, real estate professionals, landscapers, and farming clients are becoming a more prosperous and unique way to do business.

However, it’s important to remember that you have to target businesses where you have the right location and the right skills. Again, farming has particular needs and goals. If you can fill them, then you have a specialization that is highly valuable to that market.

What do prospective clients consider when deciding how to choose an accountant? What do they look for in a CPA?

What are the things that are most likely to influence a client’s perception of you in the little amount of information they’re able to get from a flyer, website, or social media? While the idea that “first impressions matter” may seem a little cliché, they still matter to your clients. As a result, making sure your communication is direct, pleasing, and engaging is critical to your success.

Some important deciding factors include:

• Aesthetics. What’s the aesthetic of your website? Is it mobile compliant? Does it seem modern? Do your documents use color and seem to be professionally designed? Take care to control the new prospective client’s perception of you and what they think they see in you.
• Have a professional place to meet. Whether you operate a brick-and-mortar business or a virtual one, having a professional place to meet with clients is essential.
• Clients want comfort and assurance . Clients want the assurance that, if the IRS or another regulatory authority comes after them, that you be my defender and stand between them and the organization? Extending that sense of comfort is going to help influence them.
• Know your target market . Know what your market is looking for and make it very clear that’s what you can provide them.    

Thanks to our subject matter experts Jordan Kleinsmith and Mo Arbas for their input into this article.

Bring more value to your clients.

Accounting Business Plan Template

Written by Dave Lavinsky

Accounting Business Plan

You’ve come to the right place to create your Accounting business plan.

We have helped over 5,000 entrepreneurs and business owners create business accounting plans and many have used them to start or grow their accounting firms.

Below is a template to help you create each section of your Accounting business plan.

Executive Summary

Business overview.

DeSanta & Co is a new accounting firm located in Indianapolis, Indiana. We provide a full suite of accounting services to local businesses, including bookkeeping, accounting, and tax services. Our combined decades of expertise and client-focused service ensures that we will become the #1 accounting firm in the next five years.

DeSanta & Co is run by Michael DeSanta. Michael has decades of accounting experience and has gained a loyal clientbase from providing his services through competing firms. His expertise, reputation, and loyal clientbase will ensure that our firm is successful.

Product Offering

DeSanta & Co will offer its clients a full suite of accounting services. These services include bookkeeping, accounting, tax services, and auditing. The company will employ a large and diverse staff of professional accountants to ensure we can offer as many services as possible.

Customer Focus

DeSanta & Co will serve small and medium-sized businesses located in the Indianapolis, Indiana area. Most of these businesses will have less than 1000 employees and earn a revenue less than $10 million per year. We will also offer limited services to individuals, such as tax prep and help.

Management Team

DeSanta & Co’s most valuable asset is the expertise and experience of its founder, Michael DeSanta. Michael has been a certified public accountant (CPA) for the past 20 years. Throughout his career, he has developed a loyal client base, and many clients have stated that they will switch to DeSanta & Co once the company is established and running. Michael’s combination of skills, accounting knowledge, and loyal following will ensure that DeSanta & Co is a successful firm.

Success Factors

DeSanta & Co will be able to achieve success by offering the following competitive advantages:

• Michael DeSanta will initially help the clientbase that he has built carefully over the past twenty years.
• The company will emphasize providing client-focused service so that our clients feel valued.
• The company will provide our accounting services at an affordable rate.

Financial Highlights

DeSanta & Co is currently seeking $400,000 to launch. The funding will be dedicated to the office build out, purchase of initial equipment, working capital, marketing costs, and startup overhead expenses. The breakout of the funding is below:

• Office design/build: $100,000
• Office equipment, supplies, and materials: $50,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $50,000
• Working capital: $50,000

The following graph below outlines the pro forma financial projections for DeSanta & Co.

Company Overview

Who is desanta & co.

DeSanta & Co is a new accounting firm located in Indianapolis, Indiana that provides local businesses with a full suite of accounting services. We are a small firm but have considerable experience, so we can offer better quality of services than our competition. We expect that our most popular services will include bookkeeping, accounting, and tax services. Our combined decades of expertise and client-focused service ensures that we will become the #1 accounting firm in the next five years.

  DeSanta & Co is run by Michael DeSanta. Michael has decades of accounting experience and has gained a loyal clientbase from providing his services through competing firms. After working for several accounting firms around town, he surveyed his clientbase to see if they would be willing to switch to his new company once launched. Most of his clients responded positively, which motivated Michael to finally launch his business.

DeSanta & Co History

Upon surveying his clientbase and finding a potential office, Michael DeSanta incorporated DeSanta & Co as an S-Corporation in April 2023.

The business is currently being run out of Michael’s home office, but once the lease on DeSanta & Co’s office location is finalized, all operations will be run from there.

Since incorporation, DeSanta & Co has achieved the following milestones:

• Found an office space and signed Letter of Intent to lease it
• Developed the company’s name, logo, and website
• Hired an interior designer for the decor and furniture layout
• Determined equipment and fixture requirements
• Began recruiting key employees

DeSanta & Co Services

DeSanta & Co will provide the following services to its clients:

• Bookkeeping
• Tax services
• Advisory services
• Investment services
• Management consulting
• Valuation and planning

Industry Analysis

The accounting industry is essential to the success of other businesses and industries. Accountants record and track financial transactions, which helps businesses ensure they are making a profit. As such, accounting services are always in demand and the industry often sees great growth.

There are several essential services that accounting firms can provide to businesses and individuals. The most popular services include bookkeeping, tax services, advisory services, and valuation and planning. Though most businesses employ their own accountants, many businesses are switching to hiring accounting firms to save on costs.

The accounting industry is expected to grow over the next several years. According to The Business Research Company, the accounting industry is expected to grow at a CAGR of 4.2% from now until 2027. This growth is due to the increasing demand for accountants worldwide. This increase in demand and industry growth ensures that DeSanta & Co will achieve success.

Customer Analysis

Demographic profile of target market, customer segmentation.

DeSanta & Co will primarily target the following customer profiles:

• Local small businesses
• Medium-sized businesses
• Individuals

Competitive Analysis

Direct and indirect competitors.

DeSanta & Co will face competition from other companies with similar business profiles. A description of each competitor company is below.

Perkins & Smith

Perkins & Smith is a small accounting firm that has intentionally remained small so that they can have stronger relationships with their clients. Since they opened in 1960, Perkins & Smith has been one of the leading accounting firms in the Four State Region. They offer a wide range of services including accounting, bookkeeping, payroll services, tax prep and planning, and advisory services. They have built up a loyal clientele and maintained a strong, positive reputation since their opening decades ago.

Premiere Accounting

Premiere Accounting is a large accounting firm that specializes in helping large businesses with accounting, taxes, and similar services. Since opening in 1995, they have acquired a loyal client base, including several multi-billion dollar companies. They employ over a hundred professionals who all have diverse backgrounds. This helps serve their diverse clientele and ensures they are meeting the specific needs of every business that works with them.

Jackson Brothers Accounting

Jackson Brothers Accounting is a privately held accountant practice that has been popular in the area since 1985. They offer a wide variety of services including, tax planning and preparation, payroll processing, financial planning, and small business accounting. Though they are open to helping nearly all businesses and sectors, they primarily focus on local small businesses and startups.

Competitive Advantage

DeSanta & Co will be able to offer the following advantages over the competition:

• Client-oriented service : DeSanta & Co will put a focus on customer service and maintaining long-term relationships. We aim to be the best accounting firm in the area by catering to our customer’s needs and developing a strong connection with them.
• Management : Michael has been extremely successful working in the accounting sector and will be able to use his previous experience to help his clients better than the competition.
• Relationships : Having lived in the community for 25 years, Michael DeSanta knows many of the local leaders, newspapers and other influences.

Marketing Plan

Brand & value proposition.

DeSanta & Co will offer a unique value proposition to its clientele:

• Client-focused financial services, where the company’s interests are aligned with the customer
• Service built on long-term relationships
• Big-firm expertise in a small-firm environment

Promotions Strategy

The promotions strategy for DeSanta & Co is as follows:

Targeted Cold Calls

DeSanta & Co will initially invest significant time and energy into contacting potential clients via telephone. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting individuals in areas and occupations that are most likely to need accounting services. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.

DeSanta & Co understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer other businesses by providing economic or financial incentives for every new client produced. This strategy will increase in effectiveness after the business has already been established.

Social Media

DeSanta & Co will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Website/SEO

DeSanta & Co will invest heavily in developing a professional website that displays all of the company’s services. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.

The fees and hourly pricing of DeSanta & Co will be moderate and competitive so clients feel they are receiving great value when utilizing our accounting services.

Operations Plan

The following will be the operations plan for DeSanta & Co. Operation Functions:

• Michael DeSanta will be the Owner of DeSanta & Co. In addition to providing accounting services, he will also manage the general operations of the business.
• Michael DeSanta is joined by a full-time administrative assistant, Jessica Baker, who will take charge of the administrative tasks for the company. She will also be available to answer client questions and will be the primary employee in charge of client communications.
• As the company builds its client base, Michael will hire more accounting professionals to provide the company’s services, attract more clients, and grow our business further.

Milestones:

DeSanta & Co will have the following milestones completed in the next six months.

• 6/2023 Finalize lease agreement
• 7/2023 Design and build out DeSanta & Co
• 8/2023 Hire and train initial staff
• 9/2023 Kickoff of promotional campaign
• 10/2023 Launch DeSanta & Co
• 11/2023 Reach break-even

Though he has never run his own business, Michael DeSanta has worked as an accountant long enough to gain an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He also already has a starting client base that he served while working for other accounting firms. He will hire several other employees who can help him run the aspects of the business that he is unfamiliar with.

Financial Plan

Key revenue & costs.

DeSanta & Co’s revenues will primarily come from charging clients for the accounting services we provide. We will charge our clients an hourly rate that will vary depending on the services they need.

The notable cost drivers for the company will include labor expenses, overhead, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Number of clients:
• Year 4: 100
• Year 5: 125
• Annual Rent: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, accounting business plan faqs, what is an accounting business plan.

An accounting business plan is a plan to start and/or grow your accounting business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Accounting business plan using our Accounting Business Plan Template here .

What are the Main Types of Accounting Businesses? 

There are a number of different kinds of accounting businesses , some examples include: Full Service Accounting Firm, Bookkeeping Firm, Tax Firm, and Audit Firm.

How Do You Get Funding for Your Accounting Business Plan?

Accounting businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start an Accounting Business?

Starting an accounting business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Accounting Business Plan - The first step in starting a business is to create a detailed accounting business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your accounting business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your accounting business is in compliance with local laws.

3. Register Your Accounting Business - Once you have chosen a legal structure, the next step is to register your accounting business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your accounting business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Accounting Equipment & Supplies - In order to start your accounting business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your accounting business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful accounting business:

• How to Start an Accounting Business

How to Create an Accounting Business Plan

Blog > how to create an accounting business plan, table of content, introduction, executive summary, market analysis, services and pricing, marketing and sales strategies, operational plan, human resources and team building, financial projections, client acquisition and retention, risk management and compliance, technology and innovation, expansion and growth strategies, exit strategy, our other categories.

• Company Valuation
• Pitch Deck Essentials
• Raising Capital
• Startup Guide
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Business plan 101.

In the world of accounting, a well-crafted business plan is the foundation for a successful venture. Whether you’re a seasoned accounting professional starting your own firm or an entrepreneur entering the accounting industry, creating a comprehensive business plan is essential to steer your business towards growth and profitability.

As a startup consultant service provider, Stellar Business Plans is committed to guiding you on this exciting journey. In this blog post, we’ll walk you through a step-by-step guide on how to create an accounting business plan that aligns your vision with market trends and customer needs. By following our expert advice and leveraging our expertise, your accounting firm is poised to make a lasting impact in the financial world.

The Executive Summary is a critical part of your accounting business plan as it provides an overview of your entire document. It is often the first section that potential investors, partners, or lenders read. This summary should be concise, yet compelling enough to entice readers to explore the entire plan.

Overview of Your Accounting Business: Introduce your accounting firm, including its name, location, and the services it offers. Provide a brief history of the firm, highlighting any significant achievements or milestones.

Example: “XYZ Accounting Firm is a full-service accounting firm located in [City]. With a team of highly skilled professionals, we offer a wide range of accounting services, including bookkeeping, tax planning, financial consulting, and auditing. Established in [Year], our firm has been recognized for its excellence in client service and innovative solutions.”

Vision, Mission, and Core Values: Clearly articulate your firm’s long-term vision and mission. Describe the purpose of your accounting firm and how it aims to add value to clients. Additionally, mention the core values that underpin your business philosophy and guide decision-making.

Example: “Our vision is to be the preferred accounting partner for businesses of all sizes, providing reliable financial expertise and fostering their growth. Our mission is to deliver exceptional accounting services that empower clients to make informed financial decisions. We are driven by integrity, professionalism, and a commitment to excellence.”

Key Objectives and Goals: State specific short-term and long-term objectives for your accounting firm. Include measurable goals such as revenue targets, client acquisition numbers, and geographic expansion plans. Ensure that the objectives align with your firm’s vision and mission.

Example: “Over the next three years, our primary objectives are to achieve a 25% increase in revenue, expand our client base by 30%, and establish a strong presence in neighboring cities. We also aim to enhance client satisfaction, maintaining a client retention rate of at least 90%.”

In this section, delve deep into the accounting industry to gain a comprehensive understanding of its current state, trends, and potential opportunities. Conduct thorough research and gather relevant data to support your analysis.

Analyzing the Accounting Industry Landscape: Provide an overview of the accounting industry, its size, growth rate, and major players. Highlight any recent trends or disruptions in the industry, such as advancements in cloud accounting, changes in tax regulations, or the growing demand for virtual accounting services.

Example: “The accounting industry is witnessing significant growth, driven by the increasing complexity of financial regulations and the rising demand for professional financial advice. According to [source], the global accounting services market is projected to reach $X billion by [year], with a CAGR of X%. Technological advancements, such as cloud-based accounting software and artificial intelligence, are reshaping traditional accounting practices.”

Identifying Target Clients and Niche Markets: Define your ideal client profile and target markets. Determine the industries or sectors your accounting firm aims to serve. Explain how your firm’s expertise aligns with the needs of these specific clients.

Example: “Our target clients include small and medium-sized businesses (SMBs), startups, entrepreneurs, and individual professionals. We specialize in providing accounting solutions to industries such as technology, healthcare, real estate, and professional services. By focusing on niche markets, we can better address our clients’ unique financial challenges and offer tailored services.”

Competitor Analysis and Market Share: Identify key competitors in the accounting industry and analyze their strengths, weaknesses, and market share. Highlight what sets your firm apart from competitors, such as specialized services, industry expertise, or innovative technology adoption.

Example: “The accounting landscape in [City] is competitive, with several established accounting firms and individual practitioners. Competitor A has a strong reputation for tax advisory services, while Competitor B excels in providing financial consulting for startups. While our competitors have unique strengths, our firm’s competitive advantage lies in our comprehensive suite of services, personalized client approach, and cutting-edge technology integration. Our emphasis on building long-term client relationships also sets us apart from other players in the market.”

The Services and Pricing section outlines the range of accounting services your firm offers and explains your pricing strategies to attract and retain clients.

Detailing Your Accounting Services Offered: List the various accounting services your firm provides, such as bookkeeping, tax preparation, financial analysis, payroll management, and auditing. Provide a brief description of each service and explain how it benefits clients.

• Bookkeeping: Our bookkeeping services help clients maintain accurate and up-to-date financial records, ensuring compliance with tax regulations and providing valuable insights into business performance.
• Tax Planning and Preparation: We offer comprehensive tax planning and preparation services to minimize tax liabilities and maximize tax savings for individuals and businesses alike.
• Financial Consulting: Our financial consulting services assist clients in making strategic financial decisions, analyzing financial data, and developing actionable financial plans to achieve their goals.
• Payroll Management: Our payroll management services streamline payroll processing, ensuring timely and accurate salary payments while complying with payroll tax obligations.
• Auditing and Assurance: We conduct rigorous financial audits to provide independent assurance on the accuracy and reliability of financial statements, fostering trust among stakeholders.

Pricing Strategies and Packages: Describe your pricing model, whether it’s based on hourly rates, fixed fees, or value-based pricing. Offer different service packages tailored to the needs of different client segments. Mention any discounts or promotions you may offer to attract new clients.

Example: “At XYZ Accounting Firm, we understand that each client’s financial needs are unique. As such, we offer flexible pricing options to accommodate various business sizes and budgets. Our pricing is based on the complexity of the accounting services required, the volume of transactions, and the level of financial analysis needed. We also provide discounted packages for clients opting for multiple services, such as combining bookkeeping and tax preparation services. Our transparent pricing policy ensures that clients know what to expect, without any hidden costs.”

Highlighting Your Unique Value Proposition: Explain your firm’s unique value proposition (UVP) that differentiates you from competitors. Emphasize your strengths, such as specialized industry knowledge, exceptional customer service, or a personalized approach to client needs.

Example: “At XYZ Accounting Firm, we take pride in our client-centric approach, where each client receives personalized attention from our dedicated team of professionals. Our industry expertise in sectors such as technology and healthcare allows us to offer tailored solutions that address our clients’ specific financial challenges. Moreover, our adoption of cutting-edge technologies, such as cloud-based accounting software and data analytics tools, streamlines accounting processes, leading to greater accuracy and efficiency. With our commitment to providing actionable insights and excellent customer service, we forge lasting partnerships with our clients, empowering them to achieve financial success.”

In this section, outline your marketing and sales strategies to promote your accounting services and acquire new clients. Leverage both traditional and digital marketing channels to reach your target audience effectively.

Developing a Strong Brand Identity for Your Accounting Firm: Detail your branding strategy, including your firm’s logo, colors, and overall brand message. Explain how you will communicate your brand identity through marketing materials and online presence.

Example: “As part of our branding strategy, we have designed a distinctive logo that reflects our firm’s commitment to professionalism, integrity, and precision. The color scheme of our marketing materials and website aligns with our brand message of reliability and trustworthiness. Our website serves as an informative platform, showcasing our services, success stories, and thought leadership articles. By maintaining a consistent brand identity across all communication channels, we aim to build brand recognition and instill confidence in our target audience.”

Crafting an Effective Marketing Strategy: Describe your overall marketing approach, including online and offline marketing tactics. This may include content marketing, email marketing, direct mail, networking events, and participation in industry conferences.

Example: “Our marketing strategy is built on the principles of inbound marketing, where we provide valuable content and resources to our target audience, positioning us as thought leaders in the accounting industry. Our website hosts a blog that covers accounting tips, tax updates, and financial planning insights. We leverage social media platforms, such as LinkedIn and Twitter, to share our blog posts and engage with potential clients. Additionally, we participate in industry events and conferences to network with key stakeholders and establish credibility. By focusing on educational content and active engagement, we attract prospects who recognize the value of our expertise.”

Leveraging Digital Marketing Channels: Explain how you will leverage digital marketing to reach your target audience. This could include search engine optimization (SEO) to improve website visibility, pay-per-click (PPC) advertising, and social media marketing to engage with potential clients.

Example: “Our digital marketing efforts involve optimizing our website for search engines to rank higher in organic search results. Through SEO, we aim to attract prospects actively searching for accounting services in [City]. Additionally, we employ PPC advertising on platforms such as Google Ads to display targeted ads to users searching for specific accounting keywords. Our social media marketing strategy focuses on building an active presence on platforms relevant to our target audience. By sharing valuable content, responding to queries, and participating in industry discussions, we enhance our brand visibility and nurture relationships with potential clients.”

Utilizing Referral Marketing and Networking: Describe your approach to generating referrals from existing clients and strategic partners. Outline your networking strategy to build relationships with other professionals, such as lawyers, business consultants, and financial advisors, who may refer clients to your accounting firm.

Example: “Word-of-mouth referrals are a significant source of new business for us. To encourage referrals, we maintain open communication channels with our existing clients, ensuring their satisfaction with our services. We request testimonials and online reviews from satisfied clients, showcasing their positive experiences on our website and social media platforms. Furthermore, we actively engage in networking events and industry associations, collaborating with professionals in related fields. Our collaborative approach fosters mutual referrals, expanding our network of potential clients and partners.”

The Operational Plan section outlines the day-to-day operations of your accounting firm and how it will function efficiently.

Setting Up Your Accounting Firm’s Office: Provide details about your office location, layout, and equipment needed to run the firm smoothly. Discuss any specific software or tools required for accounting tasks.

Example: “Our office is strategically located in [City], easily accessible to clients and professionals from diverse industries. The layout of our office promotes a collaborative environment, with designated spaces for team meetings and client consultations. To enhance productivity, we invest in state-of-the-art accounting software that enables real-time data access, secure document sharing, and seamless communication with clients. Additionally, our firm follows strict data security protocols to safeguard sensitive financial information.”

Selecting Accounting Software and Tools: Evaluate various accounting software options available in the market and select the ones that best suit your firm’s needs. Highlight features such as financial reporting, client management, and secure data storage.

Example: “The choice of accounting software is critical to our firm’s efficiency and service quality. After thorough research, we have selected an industry-leading cloud-based accounting software that offers robust financial reporting, data analytics, and customizable dashboards. This software allows us to streamline accounting processes, automate repetitive tasks, and generate accurate financial reports for our clients. Additionally, we use secure file-sharing tools to exchange confidential documents with clients, ensuring data protection and compliance with privacy regulations.”

Designing an Efficient Workflow and Process: Explain the workflow for client onboarding, data collection, financial analysis, and reporting. Describe how your firm will streamline processes to optimize efficiency and deliver accurate results to clients.

Example: “Our workflow starts with an initial consultation with prospective clients, where we understand their financial needs and determine the scope of services required. Upon engagement, we collaborate with clients to gather financial data and documents securely through our client portal. Our team of accountants and analysts diligently review the data, perform in-depth financial analysis, and generate comprehensive reports. We maintain clear communication channels with clients throughout the process, updating them on the progress and addressing any queries promptly. Our aim is to provide accurate, timely, and actionable financial insights that empower our clients to make informed decisions.”

The Human Resources and Team Building section focuses on building a skilled and cohesive team to support your accounting firm’s growth.

Identifying Key Roles and Responsibilities: List the key roles in your accounting firm, such as accountants, bookkeepers, tax specialists, and administrative staff. Describe the responsibilities and qualifications required for each position.

• Chief Accountant: The Chief Accountant oversees all accounting operations, financial reporting, and tax compliance. This role requires a certified public accountant (CPA) designation, extensive experience in accounting, and leadership skills to guide the team effectively.
• Tax Specialist: The Tax Specialist is responsible for providing expert tax advice, preparing tax returns, and staying updated on tax regulations. This position requires a strong understanding of tax laws and excellent analytical skills.
• Bookkeeper: The Bookkeeper manages day-to-day financial transactions, reconciles accounts, and maintains accurate financial records. Proficiency in accounting software and attention to detail are crucial for this role.
• Financial Analyst: The Financial Analyst conducts in-depth financial analysis, prepares financial statements, and offers strategic financial insights to clients. Strong analytical and communication skills are essential.

Recruitment and Hiring Strategies: Detail your recruitment process, including sourcing candidates, conducting interviews, and evaluating potential team members. Explain how you will attract top talent to your accounting firm.

Example: “To build a high-performing team, we adopt a multi-channel approach to recruitment. We leverage online job portals, social media platforms, and industry-specific networks to attract qualified candidates. Our rigorous interview process assesses candidates’ technical skills, cultural fit, and alignment with our firm’s values. We focus on hiring individuals who possess a passion for accounting, a client-centric mindset, and a commitment to continuous learning. By offering competitive compensation packages, professional development opportunities, and a supportive work environment, we aim to retain top talent and foster long-term employee loyalty.”

Nurturing a Collaborative Work Culture: Explain how you will foster a collaborative work environment that encourages teamwork, knowledge sharing, and professional growth.

Example: “Our firm values collaboration, where every team member’s contribution is recognized and appreciated. We encourage open communication and knowledge sharing, providing opportunities for cross-functional training and skill development. Our team participates in regular brainstorming sessions to foster creativity and innovation, contributing to process improvements and client service enhancements. Additionally, we promote work-life balance, recognizing that a healthy and engaged team leads to better client outcomes.”

Continuous Training and Skill Development: Outline your firm’s commitment to ongoing training and skill development for your team. Explain how you will invest in their professional growth to ensure they stay updated on industry trends and best practices.

Example: “We recognize that staying ahead in the ever-evolving accounting industry requires continuous learning and development. To equip our team with the latest knowledge and skills, we invest in ongoing training programs, workshops, and webinars. Our team members have access to industry publications, research papers, and certification courses, enabling them to stay informed about emerging trends and regulatory changes. By nurturing a learning culture, we empower our team to deliver cutting-edge solutions to our clients.”

The Financial Projections section presents detailed financial forecasts for your accounting firm, demonstrating its financial viability and growth potential. Ensure that your projections are realistic and supported by market research and historical data.

Revenue Projections: Provide a breakdown of projected revenues for each service offered by your accounting firm. Base your revenue projections on factors such as client acquisition rate, pricing strategy, and anticipated market demand.

Example: “Based on our market research and historical data, we anticipate steady growth in client acquisition over the next five years. Our conservative estimate projects a 20% increase in revenue in the first year, driven by new client acquisitions and expanded service offerings. Over the subsequent years, we aim to achieve an annual revenue growth rate of 15% as we solidify our position in the market and capitalize on referrals from satisfied clients.”

Expense Projections: Detail your firm’s operating expenses, including payroll, rent, utilities, software subscriptions, and marketing costs. Discuss any significant investments, such as office expansion or technology upgrades.

Example: “Our operating expenses include employee salaries and benefits, rental expenses, software subscriptions, marketing initiatives, and professional development costs. We anticipate a gradual increase in expenses as we expand our team and invest in marketing campaigns to raise brand awareness. Additionally, we have allocated budget for technology upgrades to improve our accounting processes and enhance client experiences. Our focus on cost efficiency and resource allocation ensures that expenses remain within manageable limits.”

Profit Margins and Net Income: Calculate projected profit margins and net income after deducting expenses from revenue. Analyze how profitability is expected to evolve over the forecast period.

Example: “Our business plan outlines a profit margin of X% for the first year, increasing to X% by the fifth year. As our firm gains momentum and optimizes operational efficiency, we expect to witness a positive impact on our profit margins. By maintaining healthy revenue streams and disciplined cost management, we project steady net income growth, which will be reinvested to fuel further expansion and enhance client services.”

Cash Flow Analysis: Present a cash flow analysis that highlights the inflow and outflow of funds throughout the forecast period. Address any potential cash flow challenges and outline strategies to ensure sufficient liquidity.

Example: “Our cash flow analysis shows that we anticipate positive cash flow from operations in the first year, providing the financial stability needed for operational growth. We have also factored in potential cash flow fluctuations and set aside a contingency reserve to address any unforeseen circumstances. By closely monitoring cash flow and optimizing accounts receivable and accounts payable processes, we aim to maintain healthy liquidity throughout the forecast period.”

Break-Even Analysis: Perform a break-even analysis to determine the point at which your accounting firm covers all expenses and starts generating profit.

Example: “Our break-even analysis reveals that we expect to achieve break-even within [time period], assuming a steady client acquisition rate and average service pricing. As we achieve break-even, we will become financially self-sufficient, allowing us to channel resources towards further growth initiatives and capitalizing on profit-generating opportunities.”

In this section, elucidate your strategies to attract new clients and retain existing ones. Focus on creating a positive client experience that fosters loyalty and drives referrals.

Creating an Effective Client Onboarding Process: Outline the steps involved in the client onboarding process, including needs assessment, data collection, and setting expectations.

Example: “Our client onboarding process begins with a detailed needs assessment, where we gain a comprehensive understanding of the client’s financial goals and challenges. We work closely with the client to collect relevant financial data through our secure client portal, ensuring data accuracy and confidentiality. During this phase, we also set clear expectations regarding service timelines, deliverables, and communication channels. By providing a smooth and transparent onboarding experience, we aim to build trust and confidence from the outset.”

Building Long-Term Client Relationships and Customer Loyalty: Explain how your firm plans to build strong relationships with clients and provide exceptional customer service. Discuss initiatives for ongoing client communication and engagement.

Example: “At XYZ Accounting Firm, we believe in fostering long-term partnerships with our clients. To achieve this, we assign dedicated account managers to each client, serving as their primary point of contact. Our account managers maintain regular communication with clients, proactively addressing their financial needs and providing timely advice. We also conduct periodic client reviews to evaluate their progress towards financial goals and identify opportunities for improvement. Our emphasis on personalized service and unwavering commitment to client success strengthens client loyalty and drives positive word-of-mouth referrals.”

Providing Excellent Customer Service and Support: Describe your approach to resolving client queries, providing timely responses, and handling client feedback. Emphasize your commitment to exceeding client expectations and delivering value-added services.

Example: “At XYZ Accounting Firm, we prioritize exceptional customer service in every interaction. Our team promptly addresses client inquiries, ensuring that no query goes unanswered. We maintain open communication channels, enabling clients to reach us via email, phone, or in-person consultations. Additionally, we actively seek client feedback through surveys and reviews, valuing their insights and using them to continuously improve our service offerings. Our client-centric approach and dedication to client satisfaction contribute to our reputation as a reliable and trusted accounting partner.”

Risk management and compliance are integral aspects of running a successful accounting firm. This section outlines the potential risks faced by your firm and strategies to mitigate them.

Identifying Potential Risks in the Accounting Industry: Discuss the various risks specific to the accounting industry, such as data breaches, legal liabilities, and changes in tax regulations. Explain how your firm will stay vigilant to address these risks proactively.

Example: “The accounting industry faces several risks, including cybersecurity threats, errors in financial reporting, and potential legal claims. To address cybersecurity risks, we invest in robust data protection measures, including firewalls, encryption, and regular data backups. Our team adheres to strict quality control protocols to minimize errors in financial reporting, mitigating the risk of costly mistakes. Moreover, our compliance team monitors regulatory changes closely, ensuring that our clients remain compliant with changing tax laws and financial regulations.”

Developing a Comprehensive Risk Management Plan: Detail your firm’s risk management plan, including strategies to mitigate identified risks. Discuss contingency plans for unforeseen events that may impact your accounting operations.

Example: “Our risk management plan encompasses a combination of preventive measures and contingency planning. Our team undergoes regular training in data security best practices, reducing the likelihood of data breaches. We implement a thorough review process for financial statements and tax returns, minimizing errors and maximizing accuracy. In the event of unexpected disruptions, we maintain contingency funds to support operations and safeguard client interests. Our proactive risk management approach ensures that we can navigate challenges and uphold our commitment to delivering exceptional service to our clients.”

Ensuring Legal and Regulatory Compliance: Discuss how your firm will stay updated on legal and regulatory requirements, ensuring compliance with industry standards and government regulations.

Example: “Staying abreast of legal and regulatory changes is a priority for our firm. Our compliance team closely monitors updates to tax laws, accounting standards, and data privacy regulations. By attending industry conferences, participating in professional associations, and collaborating with legal experts, we remain well-informed about evolving compliance requirements. Our commitment to compliance not only protects our clients from potential penalties but also enhances our reputation as a trustworthy and responsible accounting firm.”

Technology plays a pivotal role in modern accounting practices. This section explains how your firm will leverage technology and innovation to enhance efficiency and deliver top-notch services.

Adopting Advanced Accounting Software and Technology: Describe the accounting software and tools your firm will use to streamline operations, improve accuracy, and offer real-time insights to clients.

Example: “At XYZ Accounting Firm, we embrace technology as a catalyst for innovation and efficiency. Our firm utilizes cutting-edge cloud-based accounting software, which centralizes financial data, enabling real-time access from any location. This software automates routine accounting tasks, reducing manual errors and allowing our team to focus on strategic financial analysis. We leverage data analytics tools to extract valuable insights from financial data, guiding our clients towards data-driven decisions. By harnessing technology’s potential, we elevate our firm’s capabilities and deliver high-quality services to our clients.”

Harnessing the Power of Data Analytics: Explain how your firm will use data analytics to provide clients with actionable insights and drive business growth.

Example: “Data analytics is a transformative tool in accounting, offering clients valuable insights into their financial performance. Our data analytics team analyzes financial data, identifying trends, patterns, and opportunities for optimization. Through personalized dashboards and reports, we present clients with a comprehensive view of their financial health, enabling them to make informed decisions promptly. By leveraging data analytics, we empower clients to navigate challenges and capitalize on growth opportunities.”

Ensuring Cybersecurity and Data Protection: Discuss your firm’s cybersecurity measures to safeguard client data and protect against cyber threats.

Example: “Our firm prioritizes cybersecurity as a fundamental aspect of client trust. We implement strict data security protocols, such as encryption, multi-factor authentication, and regular data backups, to protect sensitive financial information. Our team undergoes periodic cybersecurity training to recognize and respond to potential threats. By continuously monitoring and updating our cybersecurity infrastructure, we instill confidence in clients that their data remains safe and confidential.”

Every successful accounting firm must have a clear vision for future growth and expansion. This section outlines strategies to scale your accounting business and seize growth opportunities.

Assessing Expansion Opportunities: Evaluate potential opportunities for geographic expansion or diversification of services. Consider factors such as market demand, competitive landscape, and resource requirements.

Example: “As our firm achieves success in [City], we see potential for geographic expansion into neighboring regions with growing business ecosystems. Additionally, we explore opportunities to diversify our service offerings, such as incorporating financial consulting for startups or providing specialized accounting services for specific industries. Our expansion decisions are rooted in thorough market analysis and align with our long-term vision to become a leading accounting firm in the region.”

Formulating Strategic Partnerships: Explain how your firm will build strategic partnerships with other professionals, such as legal advisors, financial planners, or business consultants.

Example: “Strategic partnerships play a pivotal role in our growth strategy. We collaborate with legal advisors and financial planners to provide comprehensive financial solutions to our clients. Our partnerships expand our network of potential clients and referrals, facilitating mutual growth and adding value to our clients’ businesses. By forming strong alliances with like-minded professionals, we enhance our firm’s reach and impact in the market.”

Exploring New Market Segments: Describe your approach to exploring new market segments and identifying emerging trends in the accounting industry.

Example: “To stay at the forefront of industry trends, we actively explore emerging market segments, such as sustainable finance and ESG reporting. We invest in research and development to expand our knowledge in these areas and offer specialized services to clients seeking sustainable financial practices. By anticipating market shifts and adapting our services accordingly, we position our firm as an innovative leader in the accounting industry.”

While planning for growth and success, it’s equally important to have an exit strategy in place. This section discusses potential exit options and considerations for a smooth transition.

Defining Exit Objectives: Outline your objectives for a potential exit from the accounting business. These may include selling the firm to a larger accounting company, transferring ownership to a partner, or gradually transitioning into retirement.

Example: “Our exit objectives are aligned with our long-term vision and personal goals. While we are committed to building a thriving accounting firm, we remain open to exploring opportunities for strategic mergers or acquisitions that can drive mutual growth. Additionally, we consider the possibility of transitioning ownership to a trusted partner or team member who shares our vision and values. Our exit strategy aims to secure the legacy of our firm and ensure continuity of client relationships.”

Succession Planning and Talent Development: Explain your approach to succession planning, grooming potential leaders within the firm, and nurturing a culture of professional growth.

Example: “Succession planning is essential to ensure a seamless transition in the event of an exit. We invest in talent development, providing training and mentoring to potential leaders within the firm. By identifying high-potential team members and offering growth opportunities, we foster a pipeline of capable leaders who can step into key roles when needed. Our focus on talent development not only benefits the firm’s future but also enhances employee satisfaction and engagement.”

Congratulations! You’ve reached the end of this comprehensive guide on how to create an accounting business plan. As you embark on your journey as an accounting firm owner or entrepreneur, remember that your business plan is a dynamic document that should evolve with your firm’s growth.

At Stellar Business Plans, we are committed to supporting you throughout your entrepreneurial journey. Our team of experienced startup consultants is ready to assist you in crafting a customized accounting business plan that aligns with your vision and helps you achieve your business goals.

By leveraging our expertise and following the strategies outlined in this blog post, your accounting firm is poised for success in the dynamic and rewarding world of accounting. With careful planning, dedication, and a client-centric approach, you can make a lasting impact and build a thriving accounting business that stands the test of time.

Start your journey towards accounting excellence with Stellar Business Plans today! Get in touch with us to discover how we can help you transform your vision into reality. Let’s embark on this exciting path together, paving the way for your accounting firm’s success and making your mark in the financial world.

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Business Plan Template for Accountants

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As an accountant, staying organized and having a clear roadmap for your business is crucial to your success. That's where ClickUp's Business Plan Template for Accountants comes in handy!

Our template is specifically designed for accounting firms and individual accountants, helping you outline your goals, strategies, and financial projections all in one place. With this template, you can effectively manage your practice, attract clients, and even secure funding if needed.

Here's how ClickUp's Business Plan Template for Accountants can benefit you:

• Clearly define your business goals and strategies for growth
• Outline your financial projections and track your progress
• Stay organized and easily collaborate with your team or stakeholders

Don't let the burden of business planning hold you back. Try ClickUp's Business Plan Template for Accountants today and take your accounting practice to new heights!

Business Plan Template for Accountants Benefits

When using the Business Plan Template for Accountants, you can enjoy the following benefits:

• Clear roadmap: Outline your goals, strategies, and action plans to stay focused and aligned with your vision.
• Financial projections: Create realistic and data-driven projections to monitor your firm's financial health and make informed decisions.
• Attract clients: Showcase your expertise, services, and unique value proposition to attract potential clients and stand out from competitors.
• Secure funding: With a comprehensive business plan, you'll have a better chance of securing funding from investors or financial institutions.
• Practice management: Streamline your operations, set clear objectives, and track progress to effectively manage your accounting practice.

Main Elements of Accountants Business Plan Template

ClickUp’s Business Plan Template for Accountants is a comprehensive tool that helps accounting firms or individual accountants efficiently manage their practice, attract clients, and secure funding. Here are the main elements of this template:

• Custom Statuses: Track the progress of each section of your business plan with statuses such as Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Add important details to your business plan, including references, approval status, and section categorization, using custom fields like Reference, Approved, and Section.
• Custom Views: Access different views like Topics, Status, Timeline, Business Plan, and Getting Started Guide to easily navigate and organize your business plan.
• Collaboration Tools: Utilize ClickUp's collaborative features such as document sharing, commenting, and task assignment to work seamlessly with your team members.
• Integration: Connect ClickUp with other essential tools like accounting software, CRM, and project management platforms to streamline your workflow and enhance productivity.

How To Use Business Plan Template for Accountants

If you're an accountant looking to create a comprehensive business plan, ClickUp's Business Plan Template for Accountants can be a valuable tool. Follow these five steps to make the most of this template and develop a robust plan for your accounting firm.

1. Define your business objectives

Start by clearly outlining the objectives of your accounting firm. Consider what you want to achieve in terms of growth, revenue, client acquisition, and service offerings. This will provide a roadmap for your business plan and help you stay focused on your goals.

Use the Goals feature in ClickUp to set specific, measurable, achievable, relevant, and time-bound (SMART) objectives for your accounting firm.

2. Conduct a market analysis

Understand your target market and your competitors. Identify the needs and pain points of your potential clients, and assess the competitive landscape in your industry. This analysis will help you position your accounting firm effectively and identify opportunities for growth.

Use the Table view in ClickUp to organize and analyze market research data, competitor information, and client insights.

3. Develop your service offerings

Based on your market analysis and client needs, determine the range of services you will offer as an accounting firm. This could include tax planning and preparation, bookkeeping, financial statement analysis, payroll services, or business consulting. Clearly define each service, its benefits, and how it aligns with your clients' needs.

Create tasks in ClickUp to outline and define each service offering, including pricing, deliverables, and timelines.

4. Define your marketing and sales strategy

Outline how you will attract and acquire clients for your accounting firm. This may involve digital marketing, networking events, referrals, or partnerships with other professionals. Identify the key marketing channels you will leverage and develop a sales strategy to convert prospects into clients.

Use the Automations feature in ClickUp to automate repetitive marketing tasks, such as email campaigns or social media scheduling.

5. Set financial goals and projections

Finally, set financial goals for your accounting firm and create projections for revenue, expenses, and profitability. Consider factors like pricing, client retention, and growth potential. Develop a budget and financial plan that aligns with your objectives and provides a clear path to financial success.

Use the Dashboards feature in ClickUp to track and visualize your financial goals and projections, monitoring key metrics like revenue, expenses, and profit margins.

By following these five steps and utilizing ClickUp's Business Plan Template for Accountants, you can create a comprehensive and strategic business plan for your accounting firm. With a well-defined roadmap in place, you'll be better equipped to achieve your business objectives and thrive in the competitive accounting industry.

Get Started with ClickUp’s Business Plan Template for Accountants

Accounting firms or individual accountants can use the ClickUp Business Plan Template to effectively manage their practice, attract clients, and secure funding.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a comprehensive business plan:

• Use the Topics View to organize different sections of your business plan, such as Executive Summary, Financial Projections, and Marketing Strategy
• The Status View will help you keep track of the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• Use the Timeline View to set deadlines and milestones for each section of your business plan
• The Business Plan View will give you an overview of your entire plan, allowing you to easily navigate between sections
• The Getting Started Guide View will provide you with step-by-step instructions on how to use the template and create a successful business plan
• Customize the template by adding custom fields like Reference, Approved, and Section to provide additional information and track important details
• Update statuses and custom fields as you work on each section to keep team members informed and ensure progress is on track
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Small Business Trends

How to start an accounting business.

Accounting firms play a very important role in the business world by providing key financial services such as bookkeeping, tax preparation, auditing, and consulting, helping businesses manage their finances effectively. If you are looking to start a business in this segment, we’ll take you through all the steps on how to start an accounting business.

Starting an Accounting Business

Of course, there are certain foundational aspects you need to establish before launching your business. For instance, before starting an accounting business, you should get the education and testing you need to become a certified public accountant.

Understanding the Accounting Industry

Before starting an accounting firm, it’s vital to comprehend what accounting is and the dynamics of the accounting industry, including market trends, client needs, and potential competition. Many firms offer both accounting and bookkeeping services. So research the difference between bookkeeping and accounting , along with any other services you might offer.

Developing a Business Plan for Your Accounting Firm

A comprehensive business plan outlines your firm’s mission, target market, services offered, marketing strategies, financial projections, and growth plans, providing a roadmap for success. You’ll also need to choose what type of business structure is best for your business as a separate legal entity. For most firms, the business structure chosen for the CPA firm is the Limited Liability Company, or LLC.

Legal Requirements and Business Registration

Ensure compliance with legal requirements by registering your accounting firm with the appropriate government authorities, obtaining necessary licenses, and adhering to tax regulations. You’ll need an employer identification number or EIN.

Setting Up a Business Bank Account

Open a dedicated business bank account to separate personal and business finances, facilitating easier accounting, tax reporting, and financial management.

Choosing an Accounting Niche

Consider specializing in a specific accounting niche such as tax preparation, forensic accounting, or small business accounting to differentiate your firm and target specific client needs more effectively.

Business Insurance for Your Accounting Firm

Protect your firm from potential liabilities and risks by obtaining appropriate business insurance coverage, including professional liability insurance, general liability insurance, and property insurance.

How to Start an Accounting Business From Home

The obvious advantage to running an accounting business from your home is financial. You’ll save money by not having to pay rent for a commercial space.

Before you do that, however, make sure your local zoning laws allow for a home-based business. There may be restrictions and requirements, such as your allowed hours of operation and having a certain number of parking spaces. Here’s a guide for how to start a business offering accounting services from home.

Designing Your Home Office for Productivity

Designing a home office for productivity involves creating a dedicated workspace with ergonomic furniture, adequate lighting, and minimal distractions.

Consider setting up a designated area free from household distractions to maximize productivity while working from home.

Invest in ergonomic furniture to promote comfort and proper posture, ensuring long hours of focused work.

Additionally, optimize lighting to reduce eye strain and enhance concentration. Organizational tools such as filing systems and storage solutions can also help maintain a clutter-free environment, fostering a conducive atmosphere for efficient work.

Technology and Software for Accounting Firms

Utilizing technology and software is not just an option but a necessity for accounting firms aiming to streamline their operations and boost efficiency. The integration of cloud-based accounting software, document management systems, and communication tools not only enhances collaboration among team members but also supports remote work environments, which have become increasingly prevalent.

In the context of the digital era, the adoption of technology is crucial for accounting firms to maintain their competitive edge and meet the evolving demands of their clients effectively:

• Cloud-based Accounting Software : Platforms such as QuickBooks, Xero, and Sage offer cloud-based solutions that provide accountants with access to financial data in real time. These tools come with features that automate routine tasks like invoicing, payroll processing, and financial reporting, thereby reducing the chance of human error and freeing up time for more strategic activities. The ability to collaborate online with clients on the same platform ensures transparency and enhances the decision-making process. Some of the best free accounting software options even offer advanced features that professionals may find useful.
• Document Management Systems : Tools like Google Drive, Dropbox, and SharePoint are essential for the secure storage, sharing, and organization of documents. These systems facilitate easy access to files from anywhere, at any time, ensuring that all team members are on the same page. The improved organization and accessibility lead to better workflow efficiency, quicker response times to client inquiries, and a reduction in the use of paper, contributing to environmental sustainability.
• Communication Tools : Applications such as Slack, Microsoft Teams, and Zoom have transformed how teams communicate, allowing for instant messaging, video conferencing, and project collaboration. Whether team members are working remotely or from the office, these tools ensure that everyone can stay connected, share updates, and resolve issues promptly. This constant connectivity fosters a collaborative work environment and enables firms to deliver superior client service.

Integrating these technological solutions into the daily operations of an accounting firm brings numerous benefits:

• Enhanced efficiency through automated processes and reduced manual tasks
• Improved accuracy and reduced risk of errors in financial data
• Seamless collaboration and communication within teams and with clients
• Greater flexibility and scalability to adapt to changing business needs
• Increased security and compliance with data protection regulations

By embracing these technologies, accounting firms can not only optimize their internal processes but also provide more value-added services to their clients, ultimately contributing to the firm’s growth and success in the competitive market.

Marketing Your Accounting Services

As with all new and existing businesses, you need a marketing strategy that leverages both digital and traditional marketing methods. New clients are reached by various strategies.

Building an Online Presence

Building an online presence involves creating a professional website, engaging in social media marketing, and leveraging online networking platforms to showcase expertise and attract potential clients.

Establishing a strong online presence is crucial for reaching a wider audience and attracting potential clients in today’s digital landscape. Create a professional website highlighting your firm’s services, expertise, and client testimonials.

Next, engage in social media marketing to share valuable content, interact with followers, and build brand awareness. Utilize online networking platforms like LinkedIn to connect with industry professionals, join relevant groups, and showcase your expertise through thought leadership articles and posts.

Consistently maintaining and updating your online presence helps build credibility, trust, and visibility, ultimately driving client acquisition and business growth.

Networking and Building Client Relationships

Networking and building client relationships involve attending industry events, joining professional organizations, and offering exceptional customer service to foster trust and loyalty.

Networking is a vital aspect of growing an accounting business, as it provides opportunities to connect with potential clients and industry peers. Attend industry conferences, seminars, and networking events to meet other professionals and exchange insights. Join professional organizations like the American Institute of Certified Public Accountants (AICPA) or local chambers of commerce to expand your network and access potential client referrals.

Building strong client relationships requires delivering exceptional customer service, actively listening to client needs, and providing timely, personalized solutions. For example, some clients may require you to walk them through some generally accepted accounting principles or explain concepts like what is accounting profit. By nurturing these relationships, accounting firms can cultivate trust, loyalty, and long-term client partnerships, leading to business sustainability and referrals.

Launching Your Accounting Firm

Launching an accounting business involves finalizing business offerings, setting competitive fees, and implementing marketing strategies to attract clients.

Before launching the business, finalize the range of services your firm will offer, ensuring they align with client needs and market demand.

Conduct market research to determine competitive pricing strategies that reflect the value of your services while remaining attractive to potential clients.

Develop a marketing plan that includes online and offline strategies to promote your firm’s brand, such as a website startup guide , social media marketing, email campaigns, and networking events.

Additionally, establish efficient business processes and systems to deliver high-quality services consistently. By carefully planning and executing these steps, accounting firms can successfully launch their businesses and position themselves for long-term success and growth.

FAQs: How to Start an Accounting Business

What are the key financial considerations for new accounting firms.

Financial considerations for accounting firms include managing cash flow effectively, budgeting for operational expenses and investments, monitoring profitability ratios, and ensuring compliance with tax obligations. Additionally, prudent financial planning involves setting aside funds for emergencies, investing in professional development, and evaluating the firm’s financial performance regularly to make informed business decisions.

How can new accounting businesses stand out in a crowded market?

A new accounting business can stand out from the competition by offering specialized services tailored to niche markets, providing exceptional customer service, leveraging technology for efficiency and innovation, and building a strong brand identity through effective marketing and networking efforts. By offering the best accounting services for small business users and demonstrating expertise, reliability, and a client-centric approach, accounting firms can differentiate themselves and attract clients seeking tailored solutions and personalized attention.

What role does technology play in the modern accounting firm?

Technology plays a crucial role in modern accounting firms by facilitating efficient workflow management, automating repetitive tasks, enhancing data accuracy, and improving client communication and collaboration. Cloud-based accounting software , document management systems, and communication tools streamline processes, enabling accountants to focus on value-added services and strategic insights. Embracing technology also fosters agility and adaptability, allowing accounting firms to stay competitive in a rapidly evolving digital landscape.

How can accounting firms build lasting partnerships with small businesses?

Accounting firms can build lasting partnerships with small businesses by understanding their unique needs and challenges, providing proactive advice and support, delivering personalized solutions, and fostering open communication and trust. By demonstrating a deep understanding of small business operations, offering strategic guidance for growth and financial management, and consistently delivering value, accounting firms can establish themselves as trusted advisors and long-term partners for small businesses looking to hire an accountant . Regular communication, responsiveness, and a collaborative approach further strengthen the partnership and contribute to mutual growth and prosperity.

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Home / Blog

Starting an Accounting Firm: A Step-by-Step Guide

November 17, 2020 

Running an accounting business requires a different set of skills and experience than working as an employee. As with any small business, establishing an accounting practice entails a great deal of work, but as Thomson Reuters notes, accounting firms are currently among the most profitable of all small businesses.

The best way to ensure the success of a new accounting business is to have a rock-solid plan that prepares the operation to survive its critical first year. These steps can convert the dream of running a thriving accounting firm into reality.

Is Running an Accounting Firm the Best Option for You?

Accountants and other professionals are increasingly choosing to work independently rather than as employees. Finances Online reports that big accounting firms are struggling to fill their open positions as the unemployment rate for accountants hovers around 2%. However, not all accountants are cut out to spend their career working for someone else.

For accountants whose dream is to start their own firm, Accounting Today lists the aspects to consider before establishing a business:

• Meeting the needs of small businesses and individuals on your own requires the right blend of accounting skills and experience.
• Starting any business calls for drive and initiative.
• Success also depends on the support of your family.
• Generating revenue requires marketing skill to drum up customers.
• The way to earn the highest fees is by differentiating the business via an accounting specialty, which requires its own set of skills and experience.

Do You Prefer Being a Business Owner/Boss or an Employee?

The primary benefit of working as an employee of an accounting firm is the security of having a regular paycheck and employer-provided benefits such as healthcare and retirement plans. However, many accountants chafe at the limitations of being employees:

• Employees focus on completing individual tasks on time, while entrepreneurs prioritize generating a steady stream of business to keep the operation afloat.
• Employees generally have limited impact on an accounting firm’s strategic plans and goal setting, while entrepreneurs set their own goals and determine the best path to achieving them.
• Employees may earn occasional performance-based bonuses, but entrepreneurs can directly reap the financial benefits of their hard work and innovation.

Do You Have the Required Experience, Motivation, and Support?

Few self-employed accountants become their own bosses straight out of school. In nearly every case, they first gain valuable work experience as an employee of an accounting firm. Making the switch from employee to entrepreneur begins with a checklist, as Poe Group Advisors explains:

• Public practice work experience
• Determination and motivation to overcome inevitable obstacles
• A strong work ethic and a razor-sharp focus on results
• The ability to communicate clearly to clients, potential clients, and staff
• An upbeat, can-do attitude

Will the Business Be Adequately Capitalized?

A well-thought-out business plan and an unquenchable desire to succeed must be accompanied by ready access to the capital a new business will need to get off the ground. Poe Group Advisors recommends creating a 24-month budget that breaks down revenue and expenses by month. After calculating the funds the business will need via 24-month cash flow projections, 20% should be added to the operating budget to account for unexpected costs or revenue shortfalls.

Thomson Reuters estimates that startup costs for an accounting business typically range from $2,000 to $25,000, depending on the business’s location, its strategic plan, and whether it will be a brick-and-mortar operation or virtual. However, depending on the firm’s long-term goals, startup expenses for a small or midsize accounting firm can total between $50,000 and $150,000.

These are among the expenses for a new accounting firm , as accounting service Wolf & Company explains:

• Equipment and technology, including professional accounting software and a high-speed internet connection
• Setting up your place of business, whether it’s home-based, in a storefront, or a suite in an office building; this includes furnishings, lease payments, and staffing
• Legal fees, licenses, and services for business planning, marketing research, and tax planning

Step 1: Meet Requirements for Starting an Accounting Firm

Many aspects of starting an accounting firm are decided by the founder, such as the business’s name, location, and entity type (sole proprietorship, limited liability company, professional corporation, etc.; see below for more information on business entity selection). However, the formation process requires many other steps , as CorpNet explains:

• Apply to the Internal Revenue Service for an Employer Identification Number (EIN), which is also called a Federal Tax ID, to identify the business for tax filing and reporting.
• Acquire local business operation licenses, signage permits, or home operation permits for a home-based business.
• Create a business bank account.
• Sign up for business insurance to protect your personal assets: business owner’s policy (BOP), professional liability insurance, and data breach insurance.
• Research all compliance requirements and deadlines.

Do You Need to Be a CPA to Start an Accounting Firm?

Earning a certified public accountant (CPA) license isn’t required to start an accounting firm, but licensing affects the types of accounting services a business can offer. Thomson Reuters points out that an accountant who isn’t a CPA can provide nearly all the services a CPA does, except for auditing, attestation, and other assurance services. The U.S. Securities and Exchange Commission (SEC) requires that some mandated financial statements be filed by a CPA. Of course, only a firm founded or staffed by CPAs can refer to itself as a “CPA firm.”

• Differences between assurance services and other accounting services : The services typically available from an accounting firm are tax planning and preparation, business accounting, bookkeeping, payroll, and assurance services. Assurance services are offered only by CPAs and entail formal reviews of a business’s financial documents and transactions, as Investopedia explains.
• Differences between attestation, auditing, and assurance : S. Partners describes attestation as verifying the validity of a company’s financial data for compliance, internal reviews, or financial reporting, while auditing focuses the review on a specific aspect of the organization’s operation to identify potential risks or compliance shortcomings. By contrast, assurance is intended to promote the company’s reputation for honesty, support business decisions, and enhance the credibility of the information supplied by the company.

Options for Starting an Accounting Firm

Most people envision starting a business as building it from the ground up, but this may not be the best option for every new accounting venture. For example, many professionals begin the process of striking out on their own by freelancing, as Home Business magazine points out. This allows you to make valuable contacts among potential clients while retaining your regular job.

These are the most popular options for starting an accounting firm:

• Start from scratch : One of the benefits of creating an entirely new accounting business is not having to deal with legacy pricing, technology, or past client service problems, according to Accounting Today . However, startups must determine their pricing strategy and devise a marketing strategy.
• Begin with a part-time practice : A popular way for accountants to shift from employee to owner is by picking up a few clients on the side as they continue to work as a staff accountant. This allows them to get a sense of what running a full-time practice would be like without the risk of making a clean break from their current employer.
• Find a partner : With a partner, a firm is able to offer a wider range of services to attract a broader clientele; but the chemistry has to be right between partners, and all will need to compromise for the sake of the business’s success.
• Buy a practice : While buying an existing practice may appear to be a straightforward approach to starting an accounting business, the market usually has more buyers than sellers. This gives sellers the opportunity to choose a buyer with extensive experience to protect the interests of the business’s existing clients. Purchasing a practice means inheriting a client list and other assets, but it’s also the most expensive option.

Writing Your Business Plan

The most important document for any new commercial endeavor is its business plan, which identifies the goals for the business, the services it will offer, and the market it will focus on, among other information. The business plan is the source for the firm’s pitch to potential customers, and it’s essential for securing financing.

These are among the topics that the business plan should include:

• The business’s specific goals based on the experience and skills of its staff
• Sole proprietorships are the simplest structure, but they put business owners’ personal assets at risk.
• General partnerships, limited liability partnerships (LLP), limited liability companies (LLC), and professional LLCs offer more protection for business owners.
• S corporations (S corps) are a popular option for solo accounting firms because they allow owners to pay themselves as employees, although they require incorporation fees.
• C corporations (C corps) are the most common form of business entity for corporations because they limit the liability of owners and shareholders. However, operating a C corp comes with many requirements, such as the need to hold annual meetings and file financial disclosure statements.
• Capital requirements and sources, including a breakdown of startup costs and monthly operating costs
• Marketing and pricing strategy based on the services to be offered and the experience of the staff
• Office, equipment, software, and staffing

Resources for Starting an Accounting Firm

• Truic, “How to Start an Accounting Firm” — Delve deeper into creating a business plan, choosing a legal entity for the business, acquiring licenses, and preparing for day-to-day operation.
• Firm of the Future, “How I Started My Accounting Practice” — Learn how one accountant backed into owning her own firm by teaching small businesses how to use Intuit’s QuickBooks software.
• Journal of Accountancy , “How to Launch a Financially Successful CPA Firm” — Take a good, hard look at the challenges and work required to make a new CPA business profitable.

Step 2: Choose an Accounting Specialization

Within the broad field of accounting are eight branches , as FreshBooks describes:

• Financial accounting records and manages business transactions and maintains a history of the transactions.
• Cost accounting is a form of managerial accounting that deals with manufacturing expenses, primarily those related to operations.
• Auditing may function within an organization (internal) or as a third party (external). The former oversees the company’s accounting operations, while the latter provides an independent review of an organization’s accounting systems.
• Managerial accounting collects financial data and makes it available to business managers to support their decisions related to budgeting, forecasting, cost analysis, and other matters.
• Accounting information systems focuses on the accuracy, completeness, and efficiency of the company’s accounting systems.
• Tax accounting helps clients formulate a tax plan and handles tax preparation and filing, ensuring that the client’s returns comply with all applicable tax regulations.
• Forensic accounting involves investigating legal cases such as fraud, business disputes, and claims resolution.
• Fiduciary accounting manages the affairs of a person or business, including property, estate matters, administration, and guardianship.

Alongside the eight branches are three types of accounting specialties:

• Tax accounting ensures that clients’ tax records and filings comply with applicable regulations. Accountants who specialize in tax services confirm that a business’s accounting records are IRS-compliant. They also transfer the business’s tax information to the appropriate business tax forms.
• Financial accounting confirms that a business’s tax records will meet the requirements of potential investors or lenders. Financial accountants apply generally accepted accounting principles (GAAP) to provide an accurate assessment of the business’s financial picture.
• Management accounting focuses on budgets, product costs, cash management, and other financial operations. Management accountants deal with balance sheets, profit and loss statements, and cash flow statements.

The duties of the three specialties may entail tapping skills from several of the eight accounting branches. For example, a tax accountant may apply aspects of fiduciary accounting, financial accounting, auditing, and forensic accounting while serving an individual client.

Doctors, Lawyers, and Other Professionals

Accounting firms frequently seek other professionals for their primary client base, although they are likely to have general business and personal clients as well. The company’s target market is identified in its business plan and is central to its overall goals, even if it begins with a more general clientele.

Poe Group Advisors highlights the earnings potential of specializing in an accounting niche. Aspects to consider when selecting an accounting specialty include the following:

• Choose an industry that you and your staff enjoy interacting with, and whose accounting needs match the services and specialties that your company offers.
• Identify the industries that your best customers are involved in, and the characteristics that make working with them rewarding.
• Find a specialty that will add the most value to the firm, such as estate and tax planning, business tax advice, or some other area.

Real Estate, Landscaping, Farming, and Other Niche Industries

Many accountants have experience and skills that make them particularly well-suited to business niches. Tax software vendor Canopy describes the importance to accounting firms of establishing a personal relationship with small business owners.

• Start by envisioning the company’s ideal client.
• Study the industry the client is involved in and learn about the challenges clients in this industry face.
• Determine the accounting services these clients currently use and their accounting budget.
• Learn more about the clients’ preferred communication methods and their financial status.

Skill and Location Requirements for Specialty Accounting Firms

Many accounting specialties require a particular certification. The top certification is CPA, which requires passing an exam administered by the American Institute of Certified Public Accountants (AICPA) and licensing by the state. Other accounting certifications include the following:

• The Certified Management Accountant (CMA) certification overlaps somewhat with the CPA certification , as Investopedia explains. It emphasizes financial analysis, organizational efficiency, budgeting, and strategic planning.
• A Certified Bank Auditor (CBA) works to confirm that banks comply with their own accounting procedures and state and federal finance regulations. They typically conduct audits annually, but may do so more frequently at the request of state or federal agencies.
• Enrolled agent is an IRS-administered designation that confirms an accountant is authorized to represent taxpayers in matters relating to the agency. Becoming an enrolled agent requires passing an exam or having enough experience as an IRS employee; agents must also pass a background check.

Location has much to do with the selection of an accounting firm’s specialty. For example, accounting firms in rural areas are more likely to specialize in serving the accounting needs of agriculture-related businesses. Similarly, a suburban accounting firm will probably have more success focusing on lawn care and similar businesses than a firm in an urban area.

Resources for Choosing an Accounting Specialization

• American Institute of Certified Public Accountants, Specializations & Credentials — Learn about accounting certificates in financial forensics, personal finance, and information technology.
• Motley Fool, “What Are the Eight Different Types of Accounting?” — Get an in-depth look at the eight branches of the accounting tree.

Step 3: Attract Business to Your Accounting Firm

Once the startup pieces are in place and you’ve chosen a specialty, promoting the business to develop your client base is the next step. The CPA Journal points out that the fastest and most reliable form of marketing is positive word of mouth . Ask your existing customers for referrals and for permission to use them as references.

Promoting the Business and Attracting Clients

Beyond building on your existing customer base, starting an accounting firm entails communicating your skills by growing your professional network:

• Take every opportunity to schedule a casual meet-and-greet session with prospective clients.
• Join a local business association, such as the Chamber of Commerce, and consider becoming active in civic or professional organizations.
• Provide pro bono services, which is a great way to establish new business contacts.
• Let family, friends, and business associates know that your business is seeking referrals.

Building the Business’s Brand Online

As more business activity and communication moves online, promoting your services on social media, the business’s website, and other online platforms is becoming vital. CPA Practice Advisor describes the five elements of a consistent brand for a small accounting practice:

• The business’s logo is the most recognizable element of a brand and sets the tone for the company’s message to the world.
• Its tagline is a short phrase that communicates the business’s most important aspect or attribute.
• Adopting a consistent color scheme that is used in all online and printed material helps communicate the business’s brand.
• Also stick to a single set of fonts to use in all online and printed correspondence. Ensure that the fonts you choose are from a web-safe collection.
• The imagery that accompanies the firm’s online presence and correspondence should represent a single style in photographs, illustrations, and backgrounds.

Factors Prospective Clients Consider When Choosing an Accounting Firm

Small businesses aren’t likely to require the services of a full-time accountant, but larger companies have to decide whether they’ll use inside accounting or go with an outside accounting firm, as Inc. explains. However, the key qualifications that businesses look for in an accounting firm apply to organizations of all sizes.

• Certifications : As mentioned, the most common accounting certifications are CPA and CMA, but others include Accredited in Business Valuation (ABV), Certified Valuation Analyst (CVA), and Personal Financial Specialist .
• Industry expertise : Let prospective clients know about your existing customers in the same or a similar industry. This demonstrates that the business is familiar with the field’s common issues.
• Size : While large accounting firms can offer more expertise in a greater number of areas, some small businesses prefer to deal with accounting firms that won’t make them feel overlooked. For example, large accounting firms may farm out some work to smaller companies.
• Complexity : Demonstrate to prospective clients that your accounting firm is capable of meeting all their needs, whether simple year-end tax documents and financial records, or more detailed financial planning and retirement advice.

Resources for Attracting Business to Your Accounting Firm

• Tapp Network, “5 Ways for Accounting Firms to Attract New Nonprofit Clients” — Learn how to recruit nonprofit organizations as clients for your accounting firm.
• Accounting Today, “6 Tips for Finding Your First Accounting Clients” — Tips include techniques for getting the word out about the business and communicating clearly with potential clients.
• Think Little Big, “How to Market Your Accounting Firm to Attract Top Talent” — Discover the importance of attracting talented accountants as employees for your business.

Assembling the Pieces of a Successful Accounting Firm

Accountants understand the importance of approaching a task deliberately. Having a well-thought-out plan and being thoroughly prepared for success are key steps when starting an accounting firm. The skills and experience that accountants use in their work also come into play when launching an accounting enterprise. Combined with a specialty focus and an effective marketing plan, a laser focus on meeting your clients’ needs will propel your business plan toward its goals.

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How to Start an Accounting Business

Starting an accounting business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful accounting business.

Importantly, a critical step in starting an accounting business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start an Accounting Business:

• Choose the Name for Your Accounting Business
• Determine the Type of Accounting Business You Will Launch
• Develop Your Accounting Business Plan
• Choose the Legal Structure for Your Accounting Business
• Secure Startup Funding for Your Accounting Business (If Needed)
• Secure a Location for Your Business
• Register Your Accounting Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Accounting Business
• Buy or Lease the Right Accounting Business Equipment
• Develop Your Accounting Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Accounting Business
• Open for Business

1. Choose the Name for Your Accounting Business

The first step to starting an accounting business is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your accounting business:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your accounting business.

2. Determine the Type of Accounting Business You Will Launch

The next step is to determine the type of accounting business you will launch. The four main types of accounting businesses are:

• Public accounting firms – These are large businesses that offer a variety of accounting services such as auditing, financial statement preparation and analysis, and tax preparation.
• Small business accounting firms – These are smaller accounting firms that usually specialize in providing accounting services to small businesses.
• Financial consulting – These firms provide financial advice and go beyond the traditional accounting services.
• Forensic accounting – These firms specialize in investigating and uncovering financial crimes or irregularities.

3. Develop Your Accounting Business Plan

One of the most important steps in starting an accounting business is to develop your accounting business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your accounting business.
• Company Overview – this section tells the reader about the history of your accounting business and what type of accounting business you operate. For example, are you a public accounting firm or a small business accounting firm? 
• Industry Analysis – here you will document key information about the accounting industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your accounting business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your accounting business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

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4. choose the legal structure for your accounting business.

Next you need to choose a legal structure for your accounting business and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the accounting business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start an accounting business together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for an accounting business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for an accounting business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your accounting business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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5. Secure Startup Funding for Your Accounting Business (If Needed)

In developing your accounting business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for an accounting business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in an accounting business that they believe has high potential for growth.

6. Secure a Location for Your Business

Having the right space can be important for your accounting business, particularly if you’d like to meet clients there.

To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

7. Register Your Accounting Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

8. Open a Business Bank Account

It is important to establish a bank account in your accounting business’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your accounting business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

10. Get the Required Business Licenses and Permits

Accounting businesses need the following licenses and permits:

• A business license
• An accounting firm permit (if required in your state) 
• A tax identification number from the IRS (EIN) 
• Workers compensation insurance (if you will be hiring employees) 
• State sales tax permits (if you will be selling goods and services that require a sales tax to be collected

Every state, county and city has different business license and permit requirements.

Nearly all states, counties and/or cities also require:

• Zoning Approval : typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose
• Fire Department Approval : a process by which the local fire department reviews and approves the installation of a fire alarm system.

Depending on the type of accounting business you launch, you will have to obtain the necessary state, county and/or city licenses.

11. Get Business Insurance for Your Accounting Business

There are several types of insurance that accounting businesses should consider, such as:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

12. Buy or Lease the Right Accounting Business Equipment

When starting an accounting business, you will need to purchase or lease equipment, such as:

Computer systems : These will be used to organize and store financial records, track customer data, process payroll, and issue invoices. 

Furniture and office supplies : Office furniture such as desks, chairs, filing cabinets, and office supplies such as paper, pens, and other office essentials are necessary for a successful accounting business.

When purchasing equipment, consider how long you plan to stay in business and how much money you have to invest. Leasing is typically less expensive upfront than buying. However, if you plan to keep the equipment for an extended period of time, it may be more cost-effective to purchase.

13. Develop Your Accounting Business Marketing Materials

Marketing materials will be required to attract and retain customers to your accounting business.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your accounting business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional accounting business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your accounting business.

14. Purchase and Setup the Software Needed to Run Your Accounting Business

Software that will help you run your accounting business includes:

Accounting software : This will help you manage customer invoices, track expenses and payroll, and more.

Tax preparation software : This software helps you prepare taxes for individuals and businesses quickly and accurately.

Customer Relationship Management (CRM) software : This will help you keep track of your customers’ data including contact information, invoices and payments, history of purchases and more.

When shopping for software, look for those that are user-friendly and have the features you need to run your accounting business effectively.

Research the software that best suits your needs, purchase it, and set it up.

15. Open for Business

You are now ready to open your accounting business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start an Accounting Business FAQs

Is it hard to start an accounting business.

There is no one-size-fits-all answer to this question, as the ease or difficulty of starting an accounting business will vary depending on your skills, experience, and resources. 

However, if you follow the steps above, you should be able to start your accounting business without too much difficulty.

How can I start an accounting business with no experience?

First, consider if starting an accounting business is the right decision for you. It can be difficult to start and run a business without any prior experience. 

If you decide that starting an accounting business is the right choice for you, then there are a few things you can do to increase your chances of success:

• Take a course or get certified in accounting. 
• Connect with experienced accountants and ask for advice. 
• Use the right software to help manage your business efficiently.
• Research local laws, regulations, and taxes that apply to your business. 

What type of accounting business is most profitable?

The type of accounting business that is most profitable varies depending on the country and the specific services offered. However, most accounting businesses offer services such as bookkeeping, preparing taxes, and providing financial advice.

In general, the most profitable accounting businesses are those that offer a wide range of services, have a lot of experience, and are well-connected with local businesses and individuals. If you are starting an accounting business, it is important to research the competition and find a niche that you can specialize in.

How much does it cost to start an accounting business?

The cost of starting an accounting business can vary depending on a number of factors, such as the country where you are located, the type of accounting business you want to start, and the amount of equipment and software you need. The average startup costs ranges between $5,000 and $10,000. However, depending on how large your business is you may need to invest more than this.

What are the ongoing expenses for an accounting business?

The ongoing expenses for an accounting business vary depending on the size and scope of the business. However, this can vary depending on how many employees you have, how much equipment and software you need, how large your office space is, and how much marketing you do.

How does an accounting business make money?

An accounting business can make money in a number of ways, including charging clients for services, charging for products, or charging hourly rates. In some cases, an accounting business may also receive commissions or fees from other businesses for referring clients or providing services.

The most common way to make money as an accounting business is by charging clients for services rendered. This can include fees for bookkeeping, preparing taxes, financial advice, and other services. In addition to this, accounting businesses may also sell products such as books, software, or other materials related to accounting. Finally, accounting businesses may charge hourly rates for services provided.

Is owning an accounting business profitable?

Yes, owning an accounting business can be very profitable. 

Accounting business owners can earn a very good income. The profitability of an accounting business depends on how much revenue is generated and how efficiently expenses are managed. Accounting businesses may also earn additional income from commissions or fees they charge for referring clients to other businesses.  

Some of the key things you can do to make your accounting business more profitable include:

• Offering a variety of services that appeal to a wide range of clients
• Investing in advertising and marketing materials
• Keeping expenses low
• Charging competitive rates 
• Offering add-on services that complement your main offering
• Optimizing your website for SEO to increase online visibility
• Creating a unique selling proposition
• Providing outstanding client service

Why do accounting businesses fail?

There are a number of reasons why accounting businesses can fail, such as:

• Not keeping up with industry trends and the latest technology available.
• Poor marketing or lack of visibility in the market. 
• Failing to invest in training, which results in a lack of knowledge and expertise. 
• Not differentiating yourself from competitors by offering unique services that cater to a specific niche market.

One of the main reasons that accounting businesses fail is a lack of planning. This can include not having a detailed business plan, not doing research on the industry, and not targeting the right customers.

Another reason is a lack of marketing and sales skills. This can include not creating a sales process and not have a clear and strong value proposition.

The last main reason is a lack of financial management skills. This can include not having a realistic budget, not tracking expenses, and not investing in the business.

Who are key players in the accounting market?

The accounting market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.

Some of the key players in the market include:

• Ernst & Young
• Grant Thornton

However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.

How much should I charge for my accounting services?

Accounting fees can vary depending on the type of accounting services being offered, as well as the size and scope of the project.

However, some common accounting fees include:

• Hourly rate - $50 to $150 per hour
• Flat rate - $50 to $200 per project
• Retainer fee - a monthly fee that covers a certain number of hours of work

The best way to determine the right fee for your accounting services is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.

Other Helpful Business Plan Articles & Templates

By The content team

How to set up your own accountancy business

There are lots of advantages to working for yourself. You can set your own hours, choose your own clients, and decide where and how you get the job done.

But how do you go about becoming self-employed, or even establishing your own firm? Find out with our step-by-step guide to setting up your own accountancy business.

1. Get qualified

If you want to set up an accountancy business, you’ll need certain qualifications under your belt first. And the best way to instil confidence in your clients is to equip yourself with qualifications from a renowned body such as AAT, the UK’s leading professional membership body for accountants.

Whether you choose to study part-time, full-time or online, an AAT course is a great way to get started – or move up to the next level. “The first step to becoming a qualified stay-at-home accountant is to start studying,” recruitment company Reed said in a recent blog.

“With courses to suit all experience levels and the option to study full-time, part-time, or entirely online, there’s an AAT qualification out there to suit everyone.”

Philippa Shipp, founder of virtual PA and bookkeeping service Miss Kantoor Virtual Assistant, agrees that qualifications are important – even if you only want to offer relatively simple accountancy assistance.

“Bookkeeping is not a regulated industry, so you don’t need qualifications if you have the relevant experience,” she says. “However, industry recognised qualifications such as those available through AAT can be very useful.”

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2. Gain experience

It’s not vital to have experience before setting up your own business, but it will help you to find clients and to improve your practical skills and knowledge.

Working in a full-time job for a while, taking on a part-time role, volunteering in a finance department or even doing accounting work for your friends and family are all good ways to learn the ropes.

You might even realise that you prefer being an employee if you find the right job at the right company. Craig Moore worked as an accountant for several years before setting up his business CJM Associates in 2011.

“It’s useful to have an idea of where you want to end up, but it’s also important not to create a path set in stone,” he says. “Many partners of successful accountancy practices trained in industry, and many successful financial directors started in practice.”

3. Set up your business

Once you’re ready to branch out on your own, the first thing to decide is how to set up your business. You can create a limited company or start off as a sole trader; the choice is yours.

The type of business you choose will affect the steps you’ll have to take to adhere to legal standards, as well as the type of taxes you pay. So it’s worth taking the time to think about what is the right option for you.  

If, for example, if you decide to register as a limited company, you’ll need to register your business for tax, open and business bank account, and obtain the necessary permits and licences.

“To offer bookkeeping services, you will need anti-money laundering supervision from an accounting body or from HMRC direct, and to be registered with the ICO for data protection purposes,” Shipp says.

4. Make sure you have the tools of the trade

In order to run a modern accountancy business, whether as a sole trader or a company director, you’ll need to invest in accountancy software of some kind, as well as various types of insurance.

“For example, you will need professional indemnity insurance to offer bookkeeping or accountancy services,” Shipp says.

And to maximise your chances of success, it’s a good idea to develop a realistic business plan too. “The transition from employed to self-employed can sometimes be challenging,” Moore says.

“My advice would be to make a plan with achievable goals. Whether that’s to start on a certain date, employ x amount of people or to find x number clients by a certain date, you need to know where you want to be and how you’re going to get there.”

5. Build a client base

Good marketing is key to the success of any business. “The most difficult part of business for any new venture is getting new clients and gaining traction in the industry they’re based,” Moore says.

To build a client base, a slick website is a must. Other useful steps you can take include attending industry events where you can make contacts, asking existing clients for feedback and referrals, and advertising your services via freelance websites.

It’s also crucial to get your pricing right. “I’d advise setting prices based on your level of service and sticking to them,” Moore adds.

“I was always told, if you win a client based on price, you’ll lose that client based on price, and there’ll always be someone cheaper than you. So, believe in your services and believe in yourself!”.

Setting up your own accountancy business can be a great career move – but only if you get it right. Things to consider include:

• Do you have the necessary qualifications?
• Are you experienced enough to manage your own business?
• What type of business do you want to set up?
• Do you have the necessary insurance and registrations?
• How do you plan to market your business?

Further reading

• 4 reasons now is a great time to set up as an AAT licensed accountant
• Start marketing your business with these 3 tools
• How important is mindset in running a business?
• How to start a business UK (Informi)

The content team are the owners of AAT Comment.

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Run your business

Creating your business plan

It’s time to get things down on paper. Your business plan is vital to reality checking all those ideas you have.

What to do on day zero

If you already know what you want to be called, lock down the name and register the URL. Now take some time to see what’s working for other bookkeepers. Find the ones in your area and check out their websites – plus their LinkedIn and Facebook profiles – to see what makes them tick. How do they speak to the market? What services do they offer? How much do they charge? Use this research to help start the plan for your bookkeeping business.

But what if I already know the plan?

It’s great if you already know how you’re going to get started, but it’s still important to write everything down. For one thing, you’ll want to record all your golden ideas before they’re forgotten. Plus the writing process will help you interrogate those ideas.

Putting them on a timeline, costing them out, and fitting them around each other might reveal a thing or two. Perhaps some assumptions will need to be rethought, or some ideas will have to be skipped in favor of others. It’s a great way to organize your thinking.

Start with a working one-pager

The key to a business plan is to start out simple, and build on it as you go. Begin with a few headings and bullet points that map out your vision, goals, milestones and predictions.

Don’t let it get out of hand or bog you down. That’s not what a business plan is for. It’s supposed to help you get started. So set yourself a target of producing a one page plan to start.

Choose your words carefully

Decide how you’re going to talk about your business, and which words you’ll use. It’ll be helpful in settling on a value proposition and relating to clients. You can use your chosen terms in your elevator pitch, on your website, in blurbs about your business – and in your business plan.

Sections for a one-page business plan

1. Value proposition: Explain why clients will be better off with you.

2. The problem you’re solving: Describe the status quo and say why it’s not ideal.

3. Target market and competition: Profile the clients you want, and the bookkeeping solutions they use now.

4. Sales and marketing: Show how you’ll reach your target market, and what you’ll say to them.

5. Budget and sales: Work out your costs and predict how much you can earn over the first couple of years.

6. Milestones: Identify all the things that need to happen and map them against a timeline.

7. The team: Identify the people that will be involved (including consultants) and outline their roles.

8. Funding: Show how you’ll bankroll the business, especially as you wait for fees to start rolling in.

9. Contingency plan: What will you do if your cash flow isn’t what you budgeted?

You may eventually draw up a longer business plan, or you may stick with a short one. It depends on your working style, and the level of risk you’re taking on. Your plan will probably be more detailed if you’re taking on a lot of debt.

You can download a copy of our one-page or multi-page business plan template .

Staying alive

Once you’ve got your plan nailed down, remember you really don’t. You should treat your plan as a living document and keep tweaking it as things evolve. That’s another reason why it’s good to have a short plan, which you’re much more likely to update as you go. Try to be agile and open to change.

The discipline of maintaining your business plan will help you:

• discover and solve problems – putting things in black and white will show up holes in your thinking.
• get feedback from others – you can share your plan to get feedback from trusted advisors.
• go for more finance – an up-to-date business plan (and budget) means you’re always ready to apply for loans.
• guide growth – regular focus on the big picture will help you make strategic decisions rather than instinctive ones.

Have a succession plan

You will also need a succession plan. What will happen when you step away from the business? Will you sell it? Who to? A family member, a staff member, or someone on the open market?

A good succession plan will make sure the business can survive and thrive without you. That it will perform for its clients and its new owners. And it should give you the flexibility to step away from the business at short notice, if required or desired.

Learn more in our guide to succession planning.

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

Starting a bookkeeping business

Work through the big decisions around accreditation, services to offer, fees to charge, and how to find clients.

You’ll need some training and certification to become a professional bookkeeper. Find out where this is available.

With a foundation of knowledge, skills and experience, take the next steps in setting up as a bookkeeper.

You need to nail down what services you’ll offer, who to, and how. Don’t promise more than you’re able to deliver.

Designing your bookkeeping business around a specific type of client or your strengths can be a successful way to go.

How do you walk the line between profitable for you and affordable for your clients? And help clients budget?

You might deliver an awesome service at a great price, but what if no one knows? Let’s look at marketing your services.

Download the bookkeeping business guide

A guide to help you work through the big decisions around starting a bookkeeping business. Fill out the form to receive the guide as a PDF.

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• Building Your Business
• Operations & Success

How an Accountant Can Help a Small Business Owner

Should you hire an accountant?

Alyssa Gregory is an entrepreneur, writer, and marketer with 20 years of experience in the business world. She is the founder of the Small Business Bonfire, a community for entrepreneurs, and has authored more than 2,500 articles for The Balance and other popular small business websites.

The Start-Up Process

Regular business operations, business growth stage, frequently asked questions.

Rob Daly / Getty Images

If you are starting a small business on a limited budget, you might not want to spend the money to hire an accountant. However, if you lack experience in managing the financials of a business, you might want to hire an accountant. Mismanaged books can hurt your business.

Key Takeaways

• An accountant can help you set up your business plan and business structure
• An accountant can help you with your tax payments and financial reports
• An accountant can help you create realistic budgets for your business

When you start a business, there are many actions you need to take and systems you need to set up to create the foundation for a successful business. An accountant can help by:

• Determining the best business structure (i.e., sole proprietorship, LLC, corporation, partnership) for your situation.
• Assisting with the financial analysis in your business plan .
• Providing advice on the type of accounting software you may need.
• Providing advice and assistance on opening a business bank account.
• Making sure your accounting procedures comply with government regulations and requirements.
• Providing advice on how to track expenses during your daily business activities.
• Explaining the importance of keeping personal and business expenses separate.

Once your business is off the ground, you will need to maintain the accounting system that your accountant helped you set up. Some specific actions your accountant may take to assist you on an ongoing basis include:

• Helping ensure that your independent contractors are classified as such (and not employees) by the IRS.
• Explaining your financial statements so you can understand the ins and outs of your business.
• Overseeing company payroll and payment processes.
• Providing advice on estimated tax payments you should make during the year.
• Determining when, and to whom, you should send W2 and 1099 forms.
• Closing out your books and create financial reports at the end of the year.
• Compiling and submitting your taxes, financial reports, and all necessary paperwork to the IRS.

When you are ready to grow your business, your accountant can be an integral resource that provides advice and helps you manage the process. An accountant can also:

• Help you determine areas for growth by providing insight on cash flow patterns, inventory management, pricing, and business financing.
• Provide advice on property and equipment leasing and purchase.
• Help you prevent getting audited by the IRS.
• Prepare you for and guide you through an audit, if necessary.
• Create financial forecasts so you can make better decisions in your business.
• Work with you to create a business budget that will support your business goals .

You might not need to use an accountant for all of your financial needs. You can hire an accountant during the start-up phase and have them handle your annual reporting, but work with a bookkeeper to manage your books on a regular basis.

The most important thing you can do when it comes to your business finances is to recognize when you need to enlist the help of a professional, and then find an accountant who will help maintain the fiscal health of your business.

How Do Accountants Help Small Business Owners?

An accountant can help small business owners follow financial rules and regulations, explain financial statements, oversee payment processes, help them file their taxes correctly, and more.

Is an Accountant Worth It for a Small Business?

It depends on your situation, but accountants bring a lot more to the table than just filing taxes and handling paperwork. An accountant can analyze your business's financial data which may show you how to make your business more profitable.

PBO Advisory Group. " 6 Ways Accountants Help Business Owners Make Smarter Business Decisions ."

Do Accountants Typically Write Business Plans ?

You’re in need of a business plan, so you’re probably here because you’re wondering if an accountant can write one for you.

The quick answer is no. An accountant doesn’t typically write business plans, but they do provide and produce information and advice that is vital to the business plan and its success.

Business plans are usually developed and written by business leaders, so if you own your own organization – that would be you! However, your accountant is there to collaborate with you every step of the way.

Without proper support, business plans can be daunting, so it’s important to surround yourself with the right expertise, such as a qualified accountant. That way, you can be sure you’re making sound decisions each step of the way.

So what role does an accountant actually play when it comes to business plans? Let’s find out!

What is a Business Plan?

A business plan is a document that outlines a company’s goals, strategies, financial information, and other relevant details that are necessary for the success of an organization.

You use a business plan to secure investments, attract potential partners and clients, and provide a roadmap for the company’s growth.

Essentially, it’s the tool that makes people take you seriously and proves that you’ve put some serious thought and analysis into the initial idea. For example, if you try to secure investments without a business plan, you’re likely to be laughed out of the door. Investors want to see how you plan to use their money and what exactly their return will be in the future.

What Does a Business Plan Include?

A business plan generally includes:

What Purpose Does It Service for a Company?

A business plan serves several purposes for a company, such as helping to define its goals, strategies, and long-term objectives including:

What Are Key Components of a Successful Business Plan?

A successful business plan will look like this:

How To Ensure Your Business Plan Is Effective

• Start with detailed research. Before you create a business plan, it is essential to research the industry and the market you are entering.
• Set SMART goals. These goals should be realistic and achievable
• Identify your target market. Knowing who your target market is will help you create a plan that is tailored to their needs
• Develop an effective strategy. Developing an effective strategy is key to ensuring your business plan is effective.
• Monitor progress. Monitoring progress will help you know if the plan is working or if adjustments need to be made

How Can an Accountant Help With Your Business Plan?

An accountant can help with your business plan in a number of ways by doing the following:

• Determine your break-even point
• Calculate your startup costs, and create a pro forma financial statement
• Create a budget and cash flow statement
• Provide advice on the best ways to structure your business
• Determine the most effective tax strategies for your business
• Review your plan and provide feedback on potential areas of improvement

Who Typically Writes Business Plans?

Business plans are typically written by entrepreneurs, business owners, and senior company executives. The plan should be written in collaboration with the company’s internal team, as well as outside advisors, such as financial advisors and legal experts.

Accountants will provide the following benefits for your business plan:

Legally Set Up Your Business Structure

First, your accountant will determine the type of business structure. This determines how the company is taxed, how profits and losses are distributed, and how the business is managed.

Then, your accountant will file the appropriate paperwork and register the business. Then they will obtain any required business licenses and permits.

Finally, the accountant will need to help open a business bank account to separate business and personal finances.

File the Necessary Paperwork

An accountant files the necessary paperwork by ensuring that all the relevant information is accurately recorded and reported. This includes ensuring that the financial projections are accurate and justified, validating the assumptions, and providing a thorough financial analysis and review of the business plan overall.

Additionally, the accountant makes sure that all relevant tax documents, such as corporate tax returns, payroll taxes, and any other applicable taxes, are accurately completed and filed.

Develop a Financial Plan and Track Your Expenses/Income

Now let’s take a look at what the financial plan looks like:

Advise You on the Tax Implications of Your Business Decisions

Your accountant will know the tax system inside out and will therefore be able to advise you on:

Provide Support During Audits or Other Legal Proceedings

An accountant can provide support during audits or other legal proceedings for a business plan by providing financial analysis to help ensure the accuracy and completeness of financial records and documents.

They can also help assess the financial impact of potential risks and opportunities and make recommendations for minimizing those risks. They may also provide advice on how to optimize the company’s financial performance and strategy.

Finally, the accountant can review and certify the business plan to ensure accuracy and compliance with applicable laws and regulations.

Act as a Sounding Board for New Business Ideas

An accountant can act as a sounding board for new business ideas by providing advice and guidance on the financial feasibility of the ideas, as well as offering suggestions for how to increase the chances of success.

They can also help to identify potential areas of risk and how to mitigate them. Additionally, an accountant can help to assess the potential costs associated with any proposed business plan and provide guidance on how to manage those costs.

Help You Negotiate Loans or Lines of Credit With Banks

Your accountant is able to help you negotiate loans etc., by providing the necessary financial statements, forecasts, and projections. They can also help ensure that all documents are prepared properly and accurately.

They will also be able to find you the best terms available from different banks and provide helpful advice on the risks and benefits associated with loan options.

Additionally, an accountant can help you better understand the financial implications of taking on debt and can help you establish a repayment plan that meets the needs of both you and the bank.

Provide Valuable Insights on Financial Trends in Your Industry

How much does it cost to work with an accountant.

The cost of working with a business accountant will vary depending on the complexity of your business and the services you require. Many accountants charge an hourly rate for their services, typically ranging from $50 to $200 per hour.

Hiring a virtual accountant from a trusted firm such as Finvisor is a cost-effective solution for getting top-notch advice and expertise. You pay for the level of service you require, which is much cheaper than hiring someone full-time, but you still get a fully qualified accountant.

What Should You Expect From Your First Meeting With an Accountant?

Your first meeting with an accountant should be focused on getting to know each other and discussing your needs and goals. You should come to the meeting prepared with a list of questions, as well as any documents related to your finances.

You should also discuss your current financial situation, your short and long-term goals, any tax issues, asset management, and the type of services you may need.

Your accountant will also provide you with an overview of their services and how they will be able to help you.

How Often Should You Meet With an Accountant To Go Over a Business Plan?

The frequency of meetings with an accountant to go over a business plan will depend on the specific needs of the business. Generally, an accountant should be consulted at least once a year to review the business plan and make necessary adjustments.

In certain cases, meeting more often may be beneficial, such as when the business is undergoing significant changes or when the business is in its startup phase.

If you want to know more about how an accountant can be a valuable asset when developing and executing a business plan, get in touch with Finvisor for more information.

To learn more about what we do, or to request a quote, contact us at [email protected] or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*

• Last Modified
• June 19, 2023

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