Bookkeeping Side Hustle 7 Steps to Start in 2024
How to start a bookkeeping side hustle
Introduction to Bookkeeping Side Hustles
Benefits of Bookkeeping
With 100s of side hustle choices, why bookkeeping? We’ll dive into that in just a moment. First, a warning.
A bookkeeping side hustle is NOT for everyone. Those who say that “anyone” can do this are off their rocker. The Digital Bookkeeper Association estimates that only 3.2% of people have what it takes.
So, let’s explore what it takes to make it in bookkeeping. To consider bookkeeping, there are ten traits needed. Pay attention to see if these sound like you.
- Successful bookkeepers are resilient. Owning a business is a marathon, not a sprint. While bookkeeping IS a simple business, it is NOT easy.
- They’re detail-oriented. In bookkeeping, precision is everything.
- They like working with numbers. Why? Because numbers are the building blocks of bookkeeping.
- They enjoy helping others, often putting their clients’ needs first.
- They find comfort in structure and routine. They like following checklists.
- They embrace technology to help them get the work done efficiently.
- They’re willing to market themselves to get clients, even if it puts them outside their comfort zone.
- They are independent thinkers. They can make up their own mind.
- They’re trustworthy, which is the cornerstone when tracking other people’s finances.
- They had some money to get their side hustle going — not a fortune, but enough money to launch.
Notice what was NOT on this list. No degree or experience are necessary. In the U.S and Canada, there are no licenses or certifications needed.
Now, if someone doesn’t have those 10 traits, then bookkeeping probably isn’t their calling. Yet, if you’re nodding along, and you feel a spark of excitement, read on as bookkeeping is one of the best side hustles on earth.
Bookkeeping Side Hustle Pros & Cons
Let’s talk openly about the plusses and minuses of having a bookkeeping gig. You need to enter this profession eyes wide open, knowing what lies ahead.
- In-demand industry. Did you know that the Internal Revenue Service requires every business to keep bookkeeping records? The same is true for the Canadian Revenue Agency.
- Recurring, monthly income. Bookkeeping is the score board for business performance. This means that business owners need to know how well (or poor) they’re performing each month.
- Highly profitable. According to Inc Magazine, bookkeeping is the #1 most profitable side-hustle / business.
- Ultra low costs. A bookkeeping side hustle requires only a laptop and one primary piece of software. This means that costs are low.
- Run your bookkeeping side hustle from anywhere. A bookkeeping side hustle offers incredible flexibility. It allows you to balance work with personal life. It also opens opportunities to work with a wide range of clients from different locations.
- No physical location. No need for a physical location cuts costs significantly. This means more flexibility in your business.
- No employees required. Not having employees means you don’t have to worry about managing a team, making it simpler to run your business.
- You get to help small business owners as their virtual bookkeeper.
- Scale is limited. With a bookkeeping side hustle, it can be tough to grow the business bigger because you can only do so much work by yourself.
- Sedentary work. Bookkeeping means sitting down a lot, which isn’t great for your health because you’re not moving around much. Spending so much time sitting can make you feel stiff and might not be as fun as jobs where you get to move around.
- It gets lonely sometimes. Working by yourself is lonely because you don’t have coworkers to talk to or share ideas with during the day.
- Busy season requires long hours. During busy season, things get chaotic and stressful. Why? Because there’s a lot more work to do in a short amount of time.
- Ever-changing profession. The bookkeeping profession is always changing, which means you have to keep learning new rules and ways of doing things. This can be tough because just when you think you’ve got it all figured out, something new comes along that you need to learn.
If you’re okay with these pros and cons, here are the steps to start.
Step 1: Learn Real-World Bookkeeping
Starting in bookkeeping means you need to learn how to keep track of money for businesses or people. Here’s how you can get good at bookkeeping:
Learn the Basics: First, you need to understand the basics of bookkeeping. You can learn this from classes, online courses, or books. Like keeping score in a game, but instead of points, you’re counting money.
Practice with Software: Next, get to know how to use bookkeeping software. This is like learning how to use a new video game, but for keeping track of money. Programs like QuickBooks Online or Xero are popular and easy to use once you get the hang of it.
Do Some Real Practice: Try to use what you’ve learned by practicing with your own money or by making up some business money situations. This is like playing a practice game before the real match.
Talk to Experts: It’s also a good idea to talk to people who are already good at bookkeeping. They can give you tips and help you understand things better. You can meet these people in groups online, in classes, or at special bookkeeping meetings.
Understand Rules and Laws: Learn about the rules for keeping track of money in your area. This is important because every place has different rules about money and taxes.
Remember, becoming good at bookkeeping is like learning any new skill. It takes time and practice!
Step 2: Earn the Certifications
The field of bookkeeping is all about precision and trust. So, earning certifications as a bookkeeping professional is essential.
Certifications serve as a stamp of credibility. They show potential clients that you know your bookkeeping.
Certifications open doors to new opportunities. Whether it’s attracting clients, commanding better rates, or even qualifying for more advanced roles.
Another key aspect of modern bookkeeping is software. Today’s bookkeeping uses technology to get the job done right.
One must be confident with bookkeeping software, as it does most of the mundane tasks of bookkeeping for you.
Bookkeeping software, such as QuickBooks and Xero, makes tough tasks like financial reports and payroll management easier.
Today’s fast-paced technology has made a bookkeeper’s life much better than in the past. Web software allows bookkeepers to access financial data in real time. This makes it possible to serve clients without meeting face to face. So being tech savvy and having the right certifications, one may be a much more capable bookkeeper.
If you are serious about becoming a bookkeeper, gain the right certifications and the right skills. As the world continues to evolve, one must evolve with it, by getting tech savvy and educated.
Step 3: Select a Niche to Serve
The single best way to stand out of the crowd is choosing a niche. Having a niche will set you apart from the other bookkeepers. This has several key advantages.
Firstly, focusing a niche means you become an expert in that industry. Every industry has its own set of rules, regulations, and financial practices. So you will have more in-depth knowledge than a general bookkeeper. This is valuable to clients who are looking for someone who truly understands their business.
Secondly, specializing can help you stand out in a crowded market. The field of bookkeeping is highly competitive, and having a niche can set you apart from others. You will be able to focus on finding quality clients, and being the first choice in your client’s eyes. For example, if you focus in bookkeeping for small healthcare practices, then you stand apart for those practices.
Next, specializing can lead to higher job satisfaction and efficiency. Working in a niche that you are interested in or passionate about can make your work more enjoyable and fulfilling. Plus, as you become more familiar with a niche, your bookkeeping work for that sector improves. This can lead to faster turnaround times and higher quality of work, which in turn can lead to more referrals and business growth.
Finally, by focusing on a particular niche, you can better keep up with industry-specific trends and changes. In fields like bookkeeping, where laws, regulations, and best practices are constantly evolving, staying updated is crucial. Specialization limits what you need to pay attention to, making it easier to update knowledge and improve your skills.
In short, selecting a industry to specialize in as a bookkeeper is a powerful way to become an expert, stand out in the market, and greater job satisfaction. This can lead to a more successful, fulfilling, and rewarding bookkeeping career.
Step 4: Establish a Business
Setting up a bookkeeping business takes several steps. Steps that ensure your business runs smoothly and stays out of trouble.
First, one must establish a legal entity. This is a crucial step. The type of entity you choose impacts your liability, taxation, and the level of separation between your personal and business finances.
For example, an LLC provides personal liability protection. This will cover your assets if business-related lawsuits happen, or debt. This structure can also offer tax benefits.
Second step: starting a business bank account. A business bank account is vital for managing your finances. It helps in keeping personal and business transactions separate, making for clear and accurate bookkeeping. It also simplifies tax preparation, improves financial management, and projects professionalism to clients.
Third, Tax Identification Number (TIN). This may also include an EIN. A TIN/EIN is a requirement for tax purposes, like filing tax returns, and hiring employees. It also helps in maintaining your business’s tax compliance and reporting.
Fourth, Errors and Omissions (E & O) Insurance. Also known as professional liability insurance. E&O provides protection against claims of negligence, errors, or omissions in the services you provide. This insurance can cover both you and your clients.
In conclusion, setting up your bookkeeping business with the right legal entity, a dedicated bank account, a tax identification number, and errors and omissions insurance is fundamental to its success. These steps provide both protection and add professional appeal to your business.
Step 5: Build an Effective Website
Why is having an awesome website is super important for your bookkeeping business? Read the answer below.
Making a Great First Impression: Think of your website like the front door to your shop. When someone visits your website, you want them to think, “Wow, this looks like a great place!” A cool, easy-to-use website makes people think you’re professional and you know what you’re doing.
Easy-to-Understand Info: Your website should make it super easy for people to know what you do. It should answer questions like, “What is bookkeeping?” and “Why should I choose this person to help me?” If visitors can quickly find what they need, they’re more likely to stick around and maybe become your customers.
Having a “Call-to-Action.” You want bold letters or links that say things like “Contact Me” or “Get a Free Quote.” These are like signs that tell visitors what to do next, like giving you a call or sending you a message.
Show You’re Trustworthy: People want to know they can trust you with their money stuff. So, your website should have things like good reviews from other people, any special certificates you have, or groups you’re a part of. This is like showing off your gold stars so people know you’re awesome.
Be Easy to Find on Google: This is what adults call “SEO” (Search Engine Optimization). Basically, you want your website to pop up when someone types “bookkeeping help” into Google. To do this, you need to use the right words on your website and make sure it works well on phones too.
Catch Their Info: It’s cool to have a spot on your website where visitors can leave their email or contact info. This way, you can send them more info later or remind them about your services. For example, asking for their phone number so you can call them back.
Check How Your Website is Doing: Just like in video games, you need to check your score! Use tools to see how many people visit your website and what they like most. If something isn’t working well, you can change it to make it better.
Having a great website is like having an awesome, colorful billboard on the internet that tells everyone how great your bookkeeping business is. It should make them want to stop, look, and come in for your help!
Step 6: Leverage LinkedIn® to Find Clients
Alright, let’s dive into how you can use LinkedIn to find the right clients for your bookkeeping business. Think of LinkedIn like a huge online meeting where lots of business people hang out. Here’s how to make the most of it:
Make Your Profile Awesome: First, your LinkedIn profile is like your online business card. You want it to look super professional. Have a nice photo of yourself and a background picture that looks business-like.
In your description, tell what you do in bookkeeping, how you help people with their money, and why you’re great at it. You want to catch people’s attention and make them think, “This person can actually help me!”
Share Your Knowledge: LinkedIn is a great place to show off what you know. Write posts or articles about bookkeeping tips, how to manage money better, or the latest news in finance. When people see you know a lot, they’ll start thinking of you as the go-to person for bookkeeping help.
Joining the Conversation. These LinkedIn groups are for serious people to talk business, like finances or running a business. Join these groups and be part of the conversation. Give advice, answer questions, and be friendly.
Use LinkedIn’s ‘Search’ to Find Potential Clients: You can look for business owners or companies that might need bookkeeping help. Then, you can message potential clients about becoming their bookkeeper.
Ask for Recommendations: If you’ve worked with people before, ask them to write a recommendation for you on LinkedIn. This is like having good reviews on your profile. When new people see these, they’ll know you’re good at what you do.
Post Regularly: Keep your profile active by posting often. Share updates about your business, interesting facts, or ask questions. When you’re active, more people see your profile, which means more potential clients.
Connect and Stay in Touch: When you meet new people or find potential clients, add them as connections. Then, keep in touch by commenting on their posts or sending messages every now and then. You need to take care of these relationships so they can grow, like watering a plant.
Using LinkedIn is like being at a business expo. You get to show off your bookkeeping business, make friends, and find people who need your help. Just be yourself, be helpful, and let people know how awesome you are at bookkeeping.
Step 7: Launch Your Bookkeeping Side Hustle
You’ve done a lot of prep work. Time to go live.
Expanding on the “Launch Officially” step for your bookkeeping side hustle:
Choose a Launch Date: This is like setting the grand opening of your business. Pick a date that gives you enough time to get everything ready but is also soon enough to keep your momentum going. Mark it on your calendar and start preparing for it.
Build Suspense. In the weeks leading up to your launch, start building excitement. You can do this through social media posts, emails, or even local ads if your budget allows. Share little snippets about what you’ll offer.
Get Your Marketing Materials Ready. Make sure you have business cards, a functioning website, and social media profiles set up and ready to go. These should all look professional and make it easy for potential clients to understand your services and contact you.
Plan a Launch Event or Promotion: Consider having a special launch event or promotion. This could be a webinar where you give some free bookkeeping tips. Or, a Q&A session on social media. Offer a special discount or a free consultation for the first few clients who sign up.
Notify Your Network: A few days before your launch, remind your network about your upcoming launch. Send out emails to your contacts and post reminders on social media. If you’re part of any online or local business groups, then let them know too.
Launch Day Activities: On the day of your launch, be active online. Post on social media. Engage with any comments or questions.
Follow-Up: After your launch, don’t just wait for clients to come to you. Follow up with anyone who showed interest. Send thank you messages to people who supported your launch, and keep the conversation going with potential clients.
Evaluate and Adjust. After your launch day, take some time to evaluate how it went. What worked? What could you do better?
Having honest self-evaluation is key. This information will help you improve your marketing and business strategies moving forward.
Launching your bookkeeping side hustle is a huge step. A good start is part of the bigger picture. Still, you want to make a good impression with the launch of your business. And we just know how to make that happen!