Website design By BotEap.comHaving gained considerable experience developing five of my own accounting practices and spending the next two decades individually helping more than 2,000 accountants develop their own practices, there are some basic principles that accountants can observe to give themselves the greatest chance of success.

Website design By BotEap.comThe best way for accountants to be successful in starting their own CPA Accounting and Tax practice is by providing themselves the greatest opportunity for that success. This can be done by remembering that the basic principles for a successful practice are good clients along with the basic tools to serve them. Many accountants looking to develop their own practice are positioned with large amounts of unnecessary overhead that undermine their chance of success. Unnecessary costs can be deferred until they are needed. Get only the items you need to service initial customers. It is important to keep upfront overhead as low as possible to quickly create positive cash flow to fund practice development.

Website design By BotEap.comWhen starting a CPA accounting and tax firm, it is recommended that accountants start from home. In today’s tech world, accountants who work from home are very accepting of clients. In a sense, it provides customers with the perception that they are receiving greater value. They feel that if the accountant is incurring less overhead, perhaps some of the savings will be passed on to clients. By saving on the cost of rent and other office expenses, accountants will accelerate their positive cash flow, which can be used to finance the expansion of the practice without going into debt. Once the cash flow is sufficient to maintain an office, the accountant can decide whether expansion to an office is warranted. Accountants who work from home may also find that they enjoy it so much that they may choose to forego moving to an outside office.

Website design By BotEap.comAnother way that accountants can keep overhead low is by avoiding unnecessary expensive software. Many accountants purchase expensive unnecessary software to help clients they have not yet developed. There are extremely good software companies that offer a great product at a low or medium price. Drake Tax Software is a very profitable software program that has an excellent reputation. In the September 2011 issue of The Journal of Accountancy, the results of a software survey were published and Drake Tax Software received an excellent score. Accountants who are starting their own accounting and tax accounting firm are encouraged to look for good software at affordable prices that provides them with the basic tools to serve clients.

Website design By BotEap.comThere are many other simple ways that accountants starting their own tax and accounting firm can reduce startup costs. Simply the name that the accountants decide on for their companies will lower their startup costs. If accountants use their first name, middle initial, and last name followed by CPA and / or Certified Public Accountant, they can avoid DBA registration costs, bank charges, and filing fees. Additionally, actively licensed Certified Public Accountants have legal rights to practice public accounting under their own names, saving them costs associated with fictitious names. Many times, Certified Public Accountants may choose fictitious names, which would lower potential clients’ perception of them, which in turn would impede starting a business. For example, a licensed Certified Public Accountant who operates as a “Bay City Tax Service” or “Accounting and Tax Service” loses credibility. Potential customers may perceive that this company is not certified or licensed.

Website design By BotEap.comAccountants who are considering developing a Certified Public Accountant / Accountant practice and who are currently employed are encouraged not to terminate their employment in pursuit of starting their own Accounting Accounting and Public Tax Accountant firm. Instead, they must develop their practice at the same time while still employed. This may be a time consuming decision compared to terminating your employment and dedicating full time to your practice; however, the sacrifice is well worth the reward. As the practice grows, accountants can grow with it and transition themselves full-time to their own practice without putting unnecessary financial pressure on themselves or their families.

Website design By BotEap.comWith the financial pressure relieved while operating the new practice at the same time as employment, there will be a substantial increase in income without incurring large expenses. Cash reserves will increase substantially as employment income is maintained, and new income will also begin to flow from the new practice. This increase in cash reserves will go a long way in financing a full-time transition, and this will make the move more seamless when the time comes.

Website design By BotEap.comBy making that change to a full-time practice, accountants will find it easier to transition from full-time to their own practice in the month of January. January is the beginning of tax season, and along with it comes the beginning of income from income tax preparation. The increase in revenue will come just when accountants need it most. It is important for accountants to position themselves to start marketing early in the tax season to aggressively develop individual tax clients who get the most out of their first tax season. Also, January covers year-end work for many companies, such as payroll and financial reporting. This will also add additional income to the accountants’ practices in the month of your transition.

Website design By BotEap.comJanuary is also the best month of the year to transition from full-time to internship because it can be the best month of the year to develop new business as clients. Most business owners are reluctant to change accountants. It takes a very strong reason for a client to leave a predecessor accountant. Once a customer makes the decision to change, they generally won’t invoke the change until the end of the business year if they don’t want two accountants to split a fiscal year. Consequently, the end of the year is the most opportune time to reach out to business owners and will ease the transition to full-time practice.

Website design By BotEap.comLastly, when starting a public accountancy and tax accountancy business, it is important to avoid marketing services as a commodity or a product. This often leads to a very low response and low quality clientele. It can also be extremely expensive. There are a large number of accountants who are pursuing very expensive marketing programs offered by various companies and who are lured by hard-to-enforce warranties. Many of these programs are commodity-based. The accounting industry is not driven by commodities; It is driven by trust and loyalty. An accountant’s marketing campaign should be driven by truth, honesty, and professionalism, allowing the client to feel more comfortable knowing that they are hiring an accountant they can trust.

Website design By BotEap.comCurrently employed accountants or CPAs looking to start their own accounting and tax CPA firms will find it beneficial to follow the practice by following a few very simple steps:

Website design By BotEap.com1) Avoid unnecessary costs and expenses.

Website design By BotEap.com2) Consider starting your CPA accounting practice from home.

Website design By BotEap.com3) Develop the practice alongside current employment.

Website design By BotEap.com4) Avoid marketing the business as a commodity or a product.

Website design By BotEap.comRemember, opportunity begins with action. No action, no opportunity. Accountants who take action give themselves a chance to succeed. They should start their own accounting and bookkeeping businesses from home while employed. Their successful experience without jeopardizing their future will provide them with the confidence and cash flow they need to enjoy the freedoms of owning a CPA accounting and tax firm.

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