Just as every cloud has a silver lining, every crisis brings opportunities for those looking to make a change. For some accountants, the current shake-up is just the push they needed to set off on their own.
We spoke to Sam Newton, who has made the leap and launched his own firm, Gravitate Accounting, to get practical tips for enterprising accountants who might be looking to start their own practice.
Seize the day
Being first to market carries unique advantages, but as we continue to face an uncertain future, choosing when to take the plunge can be a daunting task. Sam advises accountants to research what’s happening across the industry. For Sam, the opportunity lay within digital technology. “By automating bookkeeping with Xero”, he says, “I could create excess time to work with clients and drive their business forward.”
Set your goals
In 2020, it might be hard to picture where you’ll be next month, let alone over the next few years. But this is still important. As part of this, create a business plan if you haven’t already. Follow the guide to do this in 10 simple steps.
Make the most of technology
For accountants considering launching their own practice in the months ahead, it will be vital to make the most of technology. Choosing the right accounting software can be overwhelming, but Sam advises new businesses to establish their priorities first and then work backwards to work out what’s right for them.
Given lockdown, these will likely be cloud-based tools, he notes, adding that he would encourage new firms to “train up on Xero to increase their understanding of their finances while reducing their fees going forward.”
As well as accounting software, there are also apps and services like GoCardless, Stripe and Fluidly that have been designed to increase efficiency and save you time. So it’s also worth getting your head around what’s out there.
Know compliance and regulation inside out
Before you can help other businesses out, you need to make sure that yours has a solid foundation. Violating laws and regulations are a fast track to business failure, so be sure to do your research – Gov.uk is a good place to start.
Sam says that it’s vital to know the legal business structure, since this affects how you register your business, and whether you’ll be solely responsible for finances and debt. He says “the first thing I focused on was getting a practice certificate – I knew this was a big box I had to tick – and then I focused on having the right insurance in place.”
Build a client base
In previous years, an accounting practice might rely on a stable set of core clients, but it’s easier than ever for people to shop around and switch accountants.
This is both a challenge and an opportunity – it means you can’t always rely on repeat business, but as a startup, you could take a slice of the market by being proactive and finding potential niches.
For example, ecommerce is a rapidly growing industry which means that there’s a big pool of potential clients out there – all trying to spend more time growing their business and less time fiddling with numbers (that’s where you come in).
On the other hand, if you already have positive, trusting relationships with a handful of clients, you can get a real boost from the starting blocks. You need to be careful when it comes to these clients though – you don’t want to burn bridges with your ex-employer – and in the long run it’s far better to maintain a positive relationship with them.
Use industry events and networking opportunities
Events are a great way to learn the secrets of the industry, keep track of trends, and build strong working relationships with other accountants. The industry is always advancing and being a part of this progress is a superb way for smaller firms to shine. Many events even offer a glimpse at the future, which can give firms a competitive edge. Sam describes this when he notes that “attending Xerocon in 2018, I saw the release of Xero Tax and knew it was going to be a hugely important tool for Gravitate Accounting.”
There are still a host of opportunities to get together with like-minded accountants and exchange ideas virtually. Since these events are now online and many of them are free or significantly cheaper than in-person events, there’s no excuse not to get out there.
Take the leap
Once you have a strong business plan in place, and you’re confident that it holds up, the final step – and perhaps the most challenging – is to take the plunge. Setting up your own accountancy practice will take time, effort, and dedication, but there’s a huge opportunity for firms who offer something different.
Both Sam and Xero wish you the best of luck if you’re an adventurous accountant who is choosing to set off on your own journey.
Visit our dedicated site for more resources to help you future proof your practice.