STARTING A BOOKKEEPING BUSINESS
Want to know the ins and outs of starting a bookkeeping business? This might be one of the best decisions you ever make as you consider your own respectable, home-based business.
RELATED: How To Become a Bookkeeper At Home
In this article:
- Benefits Of Starting A Bookkeeping Business
- Starting a Bookkeeping Business: FAQs
- How Long Will It Take Me To Start A Bookkeeping Business?
- How Much Are The Start-up Costs?
- What Tools, Technology And Certifications Do I Need To Start A Bookkeeping Business?
- If Cloud-based Bookkeeping Apps Are So Great, Why Do Small Businesses Need A Bookkeeper?
- How Do I Get Clients And Make Money While I’m Starting A Bookkeeping Business?
- What Accounting And Bookkeeping Services Can I Provide To Small Business Owners?
- Checklist for Starting a Bookkeeping Business: Your Action Plan
The Ultimate Guide for Success in the World’s #1 Most Profitable Business
Benefits of Starting a Bookkeeping Business
Although it’s going to take a lot of effort when starting a bookkeeping business, once you’re established, there are many benefits:
- Bookkeeping is a time-tested, respectable profession
- It has great income potential
- Built-in demand (every business must do bookkeeping)
- Ability to control your work schedule and have time for LIFE!
- Work with whom you want
- Determine if you want to do bookkeeping full or part time
- Freedom, flexibility…
And the list of benefits goes on and on.
Starting a bookkeeping business means you get
- A Flexible Schedule
- Ability to choose how much you work
- The power to determine with whom you work
- Freedom to work wherever you want
- Be there for your life’s precious moments
The top seven character traits of great bookkeepers:
- #7: Positive outlook and confidence
- #6: A difference maker
- #5: A Hard-worker
- #4: Organized
- #3: Ability to handle multiple projects
- #2: Detail-oriented Numbers
- #1: Personable and caring
Make sure you have the seven character traits. Know your big why. Then, find a hands-on, roll-up-your-sleeves bookkeeping course. One that rocks and shows you how to be a great bookkeeper in a “paint by numbers” format.
Starting a Bookkeeping Business: FAQs
However, there are a few questions that should be swirling around your head. And, you need to know the answers BEFORE you dive into the bookkeeping business pool.
How Long Will It Take Me To Start A Bookkeeping Business?
Our comprehensive bookkeeping business course, Bookkeeper Launch, is designed to be completed in ten (10) weeks. Some students even get their first client while still in the course! I know, crazy.
While we design Bookkeeper Launch for you to start a bookkeeping business in 10 weeks, it’s really up to you. If you can focus full-time on starting your bookkeeping business, then it will take far less time to launch.
Look, bookkeeping is a simple business. But, that does NOT mean that it is easy. Nothing in life that has lasting worth is easy. Again, it is a short-term sacrifice for a lifetime of benefit.
Bottom line: you can be up and running in as little as ten weeks. It’s all up to you mi amigo! You control your own destiny.
How Much Are The Start-up Costs?
Starting your bookkeeping business costs a lot less than you might expect.
And remember bookkeeping is the #1 most profitable business. This is a virtual bookkeeping business, so you will definitely need:
- a computer
- access to high-speed internet
- cloud-based bookkeeping applications necessary to start your bookkeeping business (and run it.)
Beyond these three key items, here are the other startup costs you can expect when you start a bookkeeping business:
- business cards (even though you hand them out on rare occasion), $20
- office supplies (ask Dwight Schrute for a deal, but they might run $100)
- website domain name and hosting to get started, $50
- do-it-yourself website, around $100…it’s mainly your time and effort. This cost estimate is for stock photography and the actual platform like Wix or Square Space. You can also use WordPress if you need more flexibility.
- Xero certification to show your clients you are a bookkeeper-bad-ass. This runs $249. But, I can get that cost waived. More on this later.
- Errors and omissions insurance downpayment; around $200. What exactly is errors and omissions insurance? Well, in case something goes awry, you commit an error or you omit ~ forget to do ~ something, this is your saving grace. Just like any other insurance, you hope you never have to use it. But, just in case, you MUST have this insurance. Don’t start a bookkeeping business without it!
- fancy pants computer safety software (like disk encryption, password management)…this runs about $185.
- setting up your bookkeeping organization, getting your business license and paying some other well-used taxes (uh-hummmm). This can vary SIGNIFICANTLY from state-to-state and county-to-county. But, I am going to to benchmark it to be $300. You could begin your business without setting up as a corporation or limited liability company (LLC). But, like errors and omissions insurance I stress the importance of you having it.
BTW…when you setup a business entity, there are several flavors. To understand what might work for you check out this helpful post about best business structure from FitSmallBusiness.com.
Okay, if I did my math right (please, say I did else I might need to find a new line of work) – that means your estimated startup costs are about $1,404.
If you’re a thrifty person, I know you can reduce that amount. And, some of the items I list above you can hold off on purchasing right away.
Most businesses cost tens if not hundreds of thousands of dollars to launch.
But not your bookkeeping business! Get going for less than $1,500 smackers…in the world’s #1 most profitable business. All kidding aside, that’s pretty cool!
What Tools, Technology And Certifications Do I Need To Start A Bookkeeping Business?
Every craftsman (or craftswoman :)) needs his handy-dandy toolkit. Why?
To help him finish the job to the best of his ability, in the least amount of time possible, to deliver a high-quality finished product.
Before you dive into your discovery of the EXACT tools, technology and professional certification you need to start a bookkeeping business, there is a critical mindset you must adopt.
Bookkeeping is an honorable, time-tested PROFESSION. And while there are currently no laws or regulations in the United States that stipulate you must be licensed, you still must adhere to this truth:
“AS A BOOKKEEPER, I AM A PROFESSIONAL. AS A BOOKKEEPING PROFESSIONAL, I MUST CONTINUE TO DEVELOP MY CHOSEN CRAFT AND EACH DAY STRIVE TO BECOME BETTER THAN THE PREVIOUS.”
As we hold onto this professional’s mentality, let’s now shift our focus to the exact tools, technology and certifications you need.
Above, in the “how much does it cost to start” section, we covered some of the specific pieces of technology and tools you need to start a bookkeeping business.
Right now, I want to discuss the MOST important thing you need: a solid bookkeeping application.
A carpenter’s go-to tool is the hammer. Or, the nail-gun.
As a great bookkeeper, your go-to tool is the bookkeeping application. (BTW: from here out, I will call it your bookkeeping app.)
There is one bookkeeping app that I am IN LOVE WITH. More on it in just a moment.
To begin, I want to give you some qualifications on ANY software you use to serve your bookkeeping clients:
- Cloud-based: you are going to operate a virtual bookkeeping business. That means you can serve your clients regardless of where you or they are located. Never rely upon applications that are location dependent. This limits your ability to serve.
- Military-grade security: you’re dealing with a lot of sensitive financial information. So, it stands to reason that the cloud-based bookkeeping apps you use protect that info at great lengths.
Now that you know the criteria from which to judge bookkeeping and peripheral applications, let’s talk about the work-horse application which I love.
Start a Bookkeeping Business Using QuickBooks®
QuickBooks® ONLINE is the bookkeeping software most used by virtual bookkeepers across the globe.
Be sure that when starting a bookkeeping business with QuickBooks®, you used the online version; not the desktop version.
When you start a bookkeeping business with QuickBooks®, you want to become certified. The benefits in getting this certification include:
- Greater understanding of how QuickBooks® function,
- A listing in QuickBooks® Online professional directory so that you can get referrals, and
- Recognition from your clients as to your qualifications.
Now, just because we learn how to start a bookkeeping business using QuickBooks ®, your learning and development does not stop there. Next, you want to obtain your professional certification.
In addition to QuickBooks® Online, there are other small business accounting platforms to consider:
- Xero ®
- Zoho Books ®
- Sage 50 ®
If Cloud-based Bookkeeping Apps Are So Great, Why Do Small Businesses Need A Bookkeeper?
Yes, small business bookkeeping software is wonderful. These apps take care of the daily number crunching and data entry, but that’s ALL they do.
Bookkeeping apps can not replace YOU. You are an awesome human being, and use the reporting on financial transactions provided by the bookkeeping apps to help your clients improve their businesses.
This is a win-win for you and your client. They get better service, and YOU make more money.
Bookkeeping apps eliminate a lot of the busy work bookkeepers were required to complete…even just 5 years ago… and free you up to deliver premium service at premium rates.
When you take advantage of bookkeeping software, you can:
- Be efficient so you can serve more clients and serve them faster…this means more money and less work for YOU!
- Earn more money in less time
- Live you ideal life / work balance
The ability to go above and beyond number-crunching is crucial if you want to become a great bookkeeper and earn a great living.
The late Zig Ziglar – one of the most brilliant men on motivation and human relationships – said, “People won’t care how much you know until they know how much you care.”
That care will never be replaced by a machine or an app. This is all you as a great bookkeeper!
Remember that the #1 character trait was being personable and caring.
The bookkeeping apps can run the numbers, but only a great bookkeeper can interpret the data, and translate it into simple language that the client understands. And do these things in a personable and caring way.
How Do I Get Clients And Make Money While I’m Starting A Bookkeeping Business?
We just talked about how to spend money… ICK
Let’s talk about how you MAKE money… YAY!
Because, without clients, you don’t have a bookkeeping business…you have a hobby.
There are many ways to get clients. What works for you may be different than what works for someone else, but there is ONE killer way that works for everybody!
It is the easiest and fastest way to get great clients. And the kicker….it’s pretty much FREE!
Talk to people! Tell family, friends, acquaintances, business owners and anyone else you can. You’ll be shocked at how productive this is!
What Accounting And Bookkeeping Services Can I Provide To Small Business Owners?
Sitting at the core of small business accounting, is the monthly preparation of the three main financial statements:
- Balance sheet
- Income statement
- Statement of cash flow
In addition to the preparation of these three main financial statements, you can also offer add-on services such as:
- Accounts payable management
- Accounts receivable management
- Prepare tax returns and self-employment tax forms
- Prepare invoices
- Payroll services
- Supplemental financial reports like a budget
- Helping to track long-term assets like machinery and equipment
Now, in order to perform these services for your clients, you do need to know accounting and bookkeeping basics, like:
- Double-entry accounting (think of this like a simple formula)
- General ledger preparation (made easier through online bookkeeping software)
- How to classify and record financial transactions
But these can all be learned!
Checklist for Starting a Bookkeeping Business: Your Action Plan
Information is useless.
Implementation is POWER!
So, let’s iron out your implementation / action plan…
My first recommendation is for you to take our free training on how to start a virtual bookkeeping business.
- Do the two-part exercise to determine if you have the seven character traits.
- Determine your big “why”.
- Create your bookkeeping business plan.
You discovered why starting a bookkeeping business could be one of the best decisions of your life.
Bottom line is: take action. If you determine that starting a bookkeeping business is right for you – JUST DO IT! Believe in yourself and you WILL prevail.
Have you considered starting a book keeping business? Tell us your reasons and concerns on the comments section.
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