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Should I leave my job to set up in practice?

Should I leave my job to set up in practice?

My apologies in advance for the lengthy writing, I need to outline my current thoughts.

I am considering leaving my current job to set up a practice working from home. In the medium term this is where I want to be, I want to be my own boss and I am extremely happy with the decision. In the short term I am unsure as to whether now is the best time.

I am currently in secure paid employment for a decent salary, halfway through a one year contract which I expect to be renewed. I am on a three month notice period. The problem is that I don't particularly enjoy my job and believe that my time would be far better spent working on my practice.

I have mainly worked as a management accountant and there is a lot I need to learn in order to become a good accountant in practice. I am currently working through this by reading this and other forums, internet research, working on friends/families accounts etc. However, I have to do this in my free time and I believe I could do a much better job if I was spending all my time on this. I also expect marketing to take up a significant amount of time in my first two years.

I don't want to deceive my employer by combining both jobs but I have the typical accountant's risk-averse outlook on taking a big step into the unknown and wonder whether I should build up my client base first before handing in my notice.

I would appreciate any advice, particularly from people who have set up recently themselves.

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14th Apr 2011 18:46

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I didnt set up recently - well, 40 years ago, which IS recent - in geological time :) 

However, my advice would be to get a few clients first - maybe devote one day at the weekend to the practice, until you have maybe 20 small clients.  By then you will have a better idea of if this is what you really want to do.

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14th Apr 2011 19:08

There is unlikely to ever be a perfect time

It's a bit like having children - if you wait until you think you can afford them, most people would never have them...

You do need to ensure you have some financial security though - you might be able to achieve this by sub-contracting for a local firm to start with until you get enough clients of your own.

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By chatman
14th Apr 2011 22:02

Follow C_D's advice and get part-time work when you have a few c

I set up in 2004

cymraig_draig's advice is good. I would say the same.

Once you have a few clients (more than you can cope with at evenings and weekends), you could look for a part-time job. Try GAAPWeb; they always seem to have quite a few (in London, anyway).

I don't think there is any deceipt to your current employer.

taxhound is correct too: there is never a right time to have kids; that's why I never plan to have any.

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15th Apr 2011 09:12

Completely off topic

 ... but I wonder if accountants have less children as an average than other sectors? Lets face it we are quite quick to put togther a spreadsheet for quite minor decisions and I'm pretty sure that having children simply wouldn't compute!!

Yes - I am childless!

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By bduncan
15th Apr 2011 09:38

It depends on your personal finances

If you are in your family need an income then don't do it. There are a lot of new entrants into market currently these been people in practice will have been made in redundant. These are common in and trying to drive prices down to such an extent that they will never make a living. If you need the money then I would wait a couple of years the market to pick up.

I doubt that subcontracting or part-time work in practice is an option, as if I was employing someone on this basis I would was going someone with the experience in the first place.

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By Monsoon
15th Apr 2011 10:00

Back off topic

because I have nothing further to add to the advice already given, I don't have kids either but that's circumstance not financial (and I want to change it!). The chap who runs the firm I trained with has.... about 6 kids. I think he makes up for the rest of us!

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By bduncan
15th Apr 2011 11:22

Still off topic

I have four kids so keeping up the averages, spreadsheet costs are horrific with nursery, holidays, loss of wife's earnings etc etc.

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15th Apr 2011 12:04

Setting up

Leaving secure well paid employment and setting up an accountancy practice is much easier than making a good job of having and raising children!

As with both, nothing will prepare you for the job in hand until it happens but you will quickly learn.

You will have to deal with issues that you never faced as an employee, you will have more sleepless nights, but the fact is that you have the opportunity to enjoy life, be your own boss, make your own decisions and build up something of value from scratch.  The sky is the limit.

Don't let your job get in the way, if you don't like it then hand your notice in today and get on with building your future.  As Richard Aschcroft once sang "You're a slave to money then you die".

I was in your shoes once, the comfort and security of a well paid job helf me back for far too long, then I decided that I had to itch the scratch and made that leap of faith.  No part time job, no safety blanket, it was sink or swim time.  It was the best career decision of my life and even in the worst times I never once regretted it.

Yes it's been hard, yes money was a serious issue but if you have faith in yourself and determination then you will not go far wrong.

Having said that, you are obviously risk adverse - it's in your training.  Work out how much you need to get by for the short term, work out how many clients can reach that level, do your pricing and see if its achievable.  Look at your business plan from an outsiders point of view.   Do a SWOT analysis and see where you are deficient - you can always buy in help for areas that you are not yet comforatble with.

Good luck with whatever you decide.

Jason Dormer

Seahorse (UK) Ltd - For Accountants and Bookkeepers

 

 

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15th Apr 2011 14:24

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Hi everyone, thanks for the advice and keep it coming.

 

The reason I mentioned deceiving my employer is because they ask us to declare whether we have any other employment, ostensibly for the purpose of ensuring they don't fall foul of the European Working Hours Directive.

 

I am very keen to jump in an embrace the risk that goes with doing something from fresh and I do have some savings which would tide us over for a couple of years. However, the sensible approach would be to take CD's advice, build up a few clients, and like he says, decide whether I even enjoy the type of things involved!

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15th Apr 2011 15:36

I think it is harder now than when I did it ...

 which was 10 years ago. Back then the internet (at least for accountants!) was in its infancy and marketing was also very staid with most putting an ad in YP & Thomson and that was it. To be a new player you just had to buy a bigger advert than the other firms and wait for the calls. I know from my clients that they get half a dozen cold calls every week from accountants and the ones on a high street get walk ins too.

So, as much as it irks me to say so, I think you need a really good marketing plan of how you are going to build some volume quite quickly. I fear that if you just do the basics then you will take too long to get a volume from which you can drive referral work (which is the lifeblood of most of us here I suspect). People still don't swap accountants easily and most only will do on the back of a personal referral. So, you've got to either tap in to new people in business (lots of competition there too!) or come up with an offering to take our clients away from us.

As I see it you either need (a) an enticing brand and marketing strategy (b) to buy a block of fees (c) build up very slowly and jump corporate mothership later on.

 

Good luck .... by the way it is great on this side if you can make it happen!

 

 

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15th Apr 2011 17:20

Options

Have you thought of actually talking to your existing employer on an honest basis to see if there isn't some way they could hire you on a reduced time basis (2-3 days/week), whilst you learned the ropes, put in some marketing etc.  If it isn't a requirement that you have no outside work, you might find they see some advantage in hiring your newly-minted firm to deliver your services.

Write the engagement letter right and they get out of employer NI (make sure you get half that benefit in the deal!).  You get a crutch for the first year or so, they get time to train someone else up.  Win-win.  Of course if you have to be there 5 days/week it won't fly, but it might not hurt to ask if you're planning on departing anyway. 

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15th Apr 2011 17:37

All or nothing ?

I am a great believer that if you are unhappy with your job you should do something about it.

However, are there other options that you have not explored ? For example, could you fix some of the things which make your job less enjoyable ? If autonomy is your thing, could you champion a particular process at work or ask for the responsibility of managing a new project ?  If you have a boss who likes to micro-manage, perhaps a savvy friend could help sharpen your upwards management skills or if you are feeling brave maybe you could try talking to your boss about it ?

 

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15th Apr 2011 17:37

All or nothing ?

I am a great believer that if you are unhappy with your job you should do something about it.

However, are there other options that you have not explored ? For example, could you fix some of the things which make your job less enjoyable ? If autonomy is your thing, could you champion a particular process at work or ask for the responsibility of managing a new project ?  If you have a boss who likes to micro-manage, perhaps a savvy friend could help sharpen your upwards management skills or if you are feeling brave maybe you could try talking to your boss about it ?

 

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17th Apr 2011 22:18

Happiness....

Just playing Devil's Advocate but what makes you think you would be any happier in practice if you don't enjoy your current job? The reality of working for yourself is that it is relentless hard work, you have no peers to directly support you and no guarantee of decent earnings.

Not wishing to put you off, but there have been several times when I have desperately wished I hadn't gone into practice. Having two pre-school children has left me with very little choice in the matter as part time jobs are fairly rare. I'm now in the position where every waking hour that is not devoted to childcare is spent working and frankly I have struggled to keep up. I still have evenings when all I want to do is put my feet up in front of the tv like normal people (with full-time jobs or stay at home Mums) but I HAVE to work do I don't let clients down and so I can pay the bills at the end of the month. I set up in practice 4 years a go at the ripe old age of 25 just months before the birth of my first child.

Re: Children. If you enjoy having a life, expendible income and a decents nights sleep then don't do it!!!

Not sure if that helps! I'd be interested to know how many people really enjoy being in practice. I suspect most people must otherwise they wouldn't do it!

Sir Digby

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17th Apr 2011 23:07

Happiness -

Not sure if that helps! I'd be interested to know how many people really enjoy being in practice. I suspect most people must otherwise they wouldn't do it!

Sir Digby

 

Posted by Sir Digby Chick... on Sun, 17/04/2011 - 22:18

 

 

Love it - after 40 years its a good job I do :)

Seriously, I'd do it all again, and wouldnt change very much either. BUT - it's about attitude and strength of will, including the willpower to take time off for yourself. I'm maybe lucky as I've always had several passions in life to take me right away from "work".  And, I've always combined my passions with my work, for instance I drive to client's the scenic way and take my camera with me. My dogs and cats come into the office with me, I've been known to arrive at a clients on horseback, and I've always been able to "switch off". 

What would make me miserable is working for some selfish pra*t to make him rich and being told what to do by some clown who hasnt got the first idea how to run a succesful practice. 

 

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By chatman
18th Apr 2011 01:09

I enjoy being in practice

but only working for myself. 

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18th Apr 2011 09:57

Echo that ....

 love working for myself .. love it .. love it .. love it! When I gave up corporate life 10 years ago and sat in my new 'office' with its Staples furniture, gleaming computer, executive chair (and one client) I knew that I would never be able to go back whatever happened. Ten years on I have nicer furniture, a bigger office (with garden views) and 142 clients (including no.1) and feel very fortunate.

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18th Apr 2011 10:12

Maybe that's where I'm going wrong

I have to work on the dining table in the lounge with all my file in the cupboard under the stairs. The fact that I bang my head everytime I go into said cupboard a thousand times a day might be the reason for my grumpiness!

 

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18th Apr 2011 10:40

You are not wrong ....

 your working environment is really important to how you feel about your work (companies spend millions on this every year after all). Sitting at the dining room table will not give you enough room, will be the wrong height and your posture will be hunched. This will make you feel tired (and yes grumpy!) and you will resent having to return there every evening. I appreciate that you might not have a spare room but if at all possible try and make it happen.

Put nice things in your office too that make you generally happy. I have a radio on all day and histroic motor racing pictures on all the walls, so it is part den. I spend 8 hours a day 4 days a week here so why shouldn't it be comfortable.

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18th Apr 2011 10:51

Evenings and weekends to start
Keep your day job and just work evenings and weekends building up a few clients. You'll quickly learn "on the job" re what clients want, best marketing methods, software needs, etc. You can sit on the sidelines, study, pontificate and plan for years, but you have to get on out there and do it. The right time to leave employment and go full time will just happen. For me, it all happened very fast indeed - I planned to do both for a year or so, but after just a few months it was clear I had to give up employment as I was getting a steady stream of new clients and just didn't have the time to do either the job nor the practice properly.

My big mistake was taking on too many carp/cheap clients. I'd been led to believe it was difficult to get clients so I under-priced and took on basically everyone who approached me. What a nightmare! The carp clients suck away all your time, energy and enthusiasm for little reward. They turn you into busy fools and cause no end of stress. You HAVE TO be selective right from day one - trust your instincts and don't undersell yourself. It takes a lot of time and effort to extract yourself once you have bad clients. I was very close to packing it all in because I was still working evenings and weekends years after giving up the day job and not actually earning much. Then I saw the light and have been "downsizing" for a few years now - sacking the worst clients, ramping up prices for "acceptable" clients and only chasing the "good" clients. Now I really enjoy work, don't work evenings nor weekends, am free to work shorter days and take holidays, all at the same time as my fee income being the highest ever on the lowest number of clients for years.

The secret is that good clients will respect you and will pay a premium if you do a good job for them. I've just increased fees for a dozen clients by 25%, - I expected one or two to leave, meaning I was still earning more for doing less, but every single one of them stayed, many saying they were happy and thanking me for what I do for them! Compare that with a particularly memorable carp client several years ago where I increased fees by just £50 p.a. for a farming partnership with abysmal records and they made such a song and dance about it, claiming I was profiteering, it was unprofessional, etc - all that made me frightened to increase prices at all for a year or two - what an idiot I was - it wasn't me, it was the carp client! That's what can happen when you work on your own with no-one else to bounce things off - little things become big in your head!

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18th Apr 2011 11:33

Alas

I live in a two bedroom house with my partner and two rugrats (plus a mangy cat). Our garden is the size of a postage stamp (no exageration). Every spare cupboard, space, loft etc is stuffed full. I did moot the subject of renting an office with my other half but it was decided we would be better off saving the money that would be spent on renting an office so that we could afford to move house sooner, to somewhere where there was space for an office.

In the meantime, I may just hide in the cupboard under the stairs as it's quite peaceful under there!

Sorry to hijack your post Dazed!

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18th Apr 2011 11:51

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Sorry to hijack your post Dazed!

 

No problem, all the posts on here are very helpful and your issues of combining work with family are very relevant as we have a little girl and I am planning on working from home to start off with as well. I sympathise with your problems, I am constantly looking to work smarter rather than harder perhaps as suggested you could look at how much you are earning from individual clients against how much work you are putting in?

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By chatman
18th Apr 2011 13:28

Sir Digby

Have you thought of going paperless? Your house seems ideally suited to it. 

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18th Apr 2011 14:23

Good point

Chatman, I think I am, erm mostly. Well I try to be anyway! All accounts are submitted by pdf for approval, all returns, accounts, etc are stored electronically. The only paperless part of my office if the endless letters from HMRC and people trying to sell me things. I try not to print anything, basically because I'm extremely tight fisted and hate forking out for paper and printer ink! Is there something else I could be doing?

 

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By chatman
18th Apr 2011 16:17

Going More Paperless

Sir Digby - You could get a good scanner with a sheet-feeder and scan all your HMRC (and other) post. Alternatively, you could subscribe to a post-scanning service such as www.ScanMyPost.co.uk and get them to do it all for you. You would need to change the address that HMRC has on record for you, but that is all. I originally went for the first option and then the second when I started spending a lot of time abroad. Both worked well. You might never have to go into the cupboard under the stairs again.

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