The field of accounting offers plenty of opportunity for advancement, and for many professionals, opening a private practice is the penultimate goal. Owning your own firm can be incredibly rewarding, but it comes with its fair share of stressors and frustrations. The following are some of the most common mistakes amongst accounting startups—avoid these, and position your firm for success.
Mistake #1: Improper Financing
According to Forbes, 9 out of 10 startups will fail. This statistic is scary, but highlights how important it is to properly prepare prior to breaking ground on your new firm. One of the most common reasons for failure? Improper financing. Many accounting startups fail to secure the financing needed to keep their business afloat. Acquiring a new client doesn’t mean instant profitability; your savings should cover at least one year’s worth of your own living expenses—it’s best to assume your business won’t be profitable until at least a year in.
Mistake #2: Inadequate Marketing
You can’t be successful if you don’t attract a bevy of clients to your firm. Many accounting startups fail to invest in marketing, which can result in poor profitability. Begin by developing a marketing plan; this requires you to determine which clients are best for your firm. For example, are you targeting small businesses? Would you prefer to work for larger companies with more than 100 employees? You must create a target demographic to help refine your marketing campaign. Accounting practice marketing can be done in a multitude of ways, from referral networks to website leads, so consider the best routes for reaching your ideal audience.
Mistake #3: Not Building an Online Presence
Today’s business world requires online branding, regardless of industry. You must invest time and money into establishing a strong online business presence, and much of that is accomplished through the creation and management of a high-quality company website. Providing unique, relevant information is important, and a website can help your brand build authority and a reputation for high-quality service. Offering chat support can help you build a better relationship with your clients, and automated lead generation can help you drive more business. If you’re not sure where to get started, invest in a website design company that can help you create custom pages that build your brand in a positive way.
Mistake #4: Not Investing in Modern Technology
Accountants are no longer subjected to long days spent hunched over at their desks, scratching away with pens, papers, and piles of ledgers. Technology has transformed the accounting game, and embracing modern software solutions is integral to success. As new technologies are introduced, the landscape of the accounting field has shifted—meaning clients expect more. Investing in modern income tax software for tax preparers means offering your clients high-quality service, streamlining in-house processes, and reducing errors and mistakes, all of which can lead to an improved bottom line. Note: Once you’ve invested in a new accounting program or software, take the time to learn to use it properly—that’ll give you ultimate value for your investment.
Mistake #5: Failure to Invest in a Solid Team
As your practice grows, you’ll rely heavily on your employees. The team you create can make or break business, and it’s important to invest time and money into curating a skilled roster. Whether you’re hiring a receptionist or CPA, it’s important that you properly vet any job candidate. Look for qualified job candidates on sites like Indeed.com, spend time with in-person interviews, and ensure each person placed fills the position’s criteria.
Opening your own firm comes with a bevy of benefits, but accounting entrepreneurs must be wary of falling into these common pitfalls. Avoid making these mistakes and set your new practice up for success.
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