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How is the practice market

I currently work in industry, an OK job (if a little tedious) with a reasonable salary for the area (Cornwall). I used to work in practice so have some idea of how things work (or at least how they did 10 years ago!). I am seriously thinking of starting my own practice and was wondering what the experience of other recently started practices have been like; is there plenty of work out there? Is competition fierce? Do charge out rates make it worthwhile? etc etc

Any feedback gratefully received.

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19th Aug 2011 11:12

I personally wouldn't jump ship at present.

I would keep the safe employment and start building your procedures and budgets, etc just in case you decide to move in 12 - 18 months time.

How much money do you need to fund the start up? what funding do you have in place? How are you going to fund it? what is you strategic plan for the practice? How much are you going to spend on marketing the practice? What marketing strategy are you going to have? What procedures do you need to run the practice? etc.

I wouldn't be jumping ship at present as I believe that the market is already stretched and unless you already have such plans in place you may find yourself regreting it. However if money isn't the main factor and a challenge is, then now is as good a time as any.

 

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19th Aug 2011 11:16

Have a good read

on this site, you will get a feel for how others see things.

There are plenty of people like you leaving jobs to start their own practice so the market place is fairly crowded and that is reflected in the prices charged.

A few examples of ten years ago:

we would regularly quote £1200 for VAT returns, annual accts and SA. Today it could be closer to £750-800.

a sub-contractor would have been £450, today maybe £150 (no accts, just SA).

small trader £600, today £450.

Of course this could vary widely from area to area and accountant to accountant. Ten years ago a colleague in the North East could only dream of the prices we were acheiving in the South East and indeed she subsequently gave up.

On the other hand its not just accountants who may be thinking of starting their own businesses so there may be a constant pool of potential new clients setting up all the time.

If you go for it - good luck!

 

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19th Aug 2011 18:44

Canary Boy

Although I would agree with most of your rough figures, you also have to take into account the improvements in accounting and tax software. The work can be turned round a lot quicker.

I think the main problem with setting up now is how long it would take to get a reasonable number of clients.

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Move into practice? - have you got 12 months

I started working for myself 2 years ago and I have to say the first 12 months were tough.

Now I'm flat out and looking to recruit staff but it has been a hard slog to get here.

Take on board all of the above comments and you need to be ensure that you have sufficient guaranteed cash flow to get you through the first 12 months (whether thats from savings or 100% certain work) as thats at least how long it will take to get established.

As others have said, it is competitive with the increasing number of franchise models, so you need to be confident that you can get clients either because you have a niche/very good contacts/price competively or a combination of all these factors and others.

 

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21st Aug 2011 18:46

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REalistically you need enough savings to live on for at least 12 months, preferably 18.

Before jumping ship I would start alongside you emploed position, working evenings and weekends until you have at least enough clients to keep you busy (and paid) for a ouple of days a week.

Hard work, yes, but the safest way to start.

 

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Go for it

I launched taxhelp.uk.com five years ago, and we've had continued growth right through the recession.

 

Starting your own practice is definitely something I'd recommend - indeed we are launching our own franchise in the next few months that is really going to shake the market and help many people to make the leap themselves with backup and low costs:

 

http://taxhelp.uk.com/franchise.htm

 

Please DM me if you have any questions about making the leap, it was the best thing I've done.

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24th Aug 2011 11:30

Fortune favours the brave

Ignore the naysayers - there is plenty of work out there - it is a question of getting your fair share of it.  It took me 3 years to get off the ground, so I would suggest that you start your practice in your spare time and see how it goes.  Give some proper thought as to what sort of practice you want.  Do you want to be a general practice or specialise?  Will you have a USP? 

Although you may need to take on all comers to build up a critical mass, beware of being too cheap.  If you are the cheapest in town you will get all the rubbish clients and have a poor quality practice. 

Start thinking about your website, marketing etc and the systems and processes that you need to have in place as you will not have time to deal with this sort of stuff as and when you start to get busy.  For example if I was starting again, I would go paperless and be an LLP from day 1.  Easy to to do at the beginning but a devil to implement when you have a busy practice with staff etc.

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24th Aug 2011 11:45

Prepare for Low Balls!

I started up 2 years ago now. I agree with 99% of what is written above.

I have recently encountered the bigger practices putting in silly quotes against me to keep the client. But as Jon says fortune favours the brave - you just have to decide how keen you are and what resource you have. And Cornwall is always a different market to England!

If you go forward I would be interested to have a chat with you, as I think there could be some synergy between us.

 

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24th Aug 2011 12:21

Part time

I agree about starting part time while keeping a full time job.

I did part-time bookkeeping work and the odd small accounts job on nights and weekends until I got some extra bookkeeping work and gave up my full time job. I then concentrated on getting  accounts and tax work until I could give up the bookkeeping work. All this took several years to achieve but meant that I wasn't short of money at the start although I was very overworked.

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Chocks away: Achieving freedom from the 9 to 5
I published my own story last year on how I made the leap and started my practice.

It usually sells for £7.99 on Amazon, but I'd like to offer a free PDF copy to accountingweb members.

Please DM me if you would like one, you can also find out more at:

www.chocks-away.com

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go for it

Yes I too would recommend that you go for it.

In Cornwall there are lots of start up businesses, especially in the growing outdoor/activity market.  Perhaps you could specialise in that area to appeal to that niche market.

I'd recommend reading accountingweb regularly as there are lots of good ideas on software, procedures etc.

Start your practice now and explore the potential of staying on part-time with your current employer.

 

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26th Aug 2011 10:34

Part time to start with..........

My advice would be same as few others said. Start part time within the security of the job and keep a time frame in your mind. I did same thing few years ago while working with a practice. I was made redundant after almost 11 years of work couple of year ago. I did not have a choice but to start working from home as job market was not very promising. Since then I have had few more clients through word of mouth and little bit marketing. I am still working from the back of my home where I had a spare place fro office. I am better than where I was 2 years ago but not established yet. But now I know what my plans are for the future 

So my advice is part time start but with clear view of what you want to achieve. 

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