Setting Up an Accountancy Practice

You need to know the difference

between

of

and

off

first

Oh stuff it. Your best bet is to set up as a sole trader. You can off set your lunch and fag expenses and offer personal guarantees to HMRC for all your client's tax bills. All tax deductable, a double winner.

The trick is to add your fees to the tax bill and then reclaim the refund from HMRC. Just, er hum, don't overdo it.

Starting a price war with a local qualified can be great fun; offer to do accounts for nothing and then charge £1,000 for a tax return.

Oh wait -you have their web site - P   E   R   F   E   C   T

I've sent you a PM, I spy a rodent partnership opportunity.

I applaud your spirit
But you are asking for trouble.

Do a deal with an experienced accountant who will pay you a percentage of the fees as an introducers fee

Trying to be helpfull

Non = none

its = it's

my profit = my loss

the rest is pure fantasy

Consider

whether you should be in the accounting business.

If you don't have any experience you won't give a very good service to your clients.

The value is in what business the website attracts

I grow a few of my own vegetables but if someone handed me a farm, I'd have no idea what to do and, within a year I'd have ruined what value the business had.

You could, as you say, bring in a a team of accountants, but without any experience of operating a practice or dealing with clients' accounting and tax affairs, how will you manage them or be sure they are doing a good job?

So, I agree with Steve, use the prospect attracting value of the website to offer an established firm, or accountant leads.  The problem of course is that the prospects will be attracted to Firm A and then be contacted by Firm B, so you'll need to match the two sides.

Good Luck

You need PII cover. You need to register with HMRC for MLR purposes. Practising Certificates are issued by the professional bodies accountants are members of. As you have no qualifications you don't need a Practising Certificate.

You REALLY need to get some experience first

If you are to set up any professional business whether it be an accountancy practice, legal practice, dentist or whatever, you really need to have a reasonable knowledge of that profession beforehand.  Sorry, but studying accountancy at college doesn't really count for much.

I would imagine that your PII cover will be fairly expensive, since "the boss" doesn't know the job and will be unable to supervise the staff.

Also, don't be surprised if your employee ends up taking most of your clients when he / she leaves.  The relationship that the clients will have will understandably be with that employee.  When he / she leaves then you won't be able to service those clients until you get a new employee, as you don't know the job yourself.

The whole thing sounds like a recipe for disaster.

Take Steve McQueen's good advice, refer the leads to a "proper" accountant and take a commission.  You'll end up with more money and less hassle that way.

Start up TV programmes

I used to be a fan of the Hotel Inspector, and similar programmes. I remember seeing one where a couple with no catering experience bought a very large money pit of a hotel, and then spent a long time recruiting a head chef to build the restaurant trade up.

When the chef then left, the owners couldn't step in and assist the evening meals as the only cooking they had done was sunday roasts etc.

The point is, had they bought a B&B they could have managed the full English breakfast with no trouble.

One of my mantras in management is that you should not ask others to do something you are not able to do yourself.

Was it Donald Rumsfeld who said (paraphrase) there are:

Known knowns

Known Unknowns

Unknown Unknows.

I am CIMA qualified, and recently did ATT, with a view to building up a part time practice - I think I can spot the Known Unknowns.

Surely you are in the unknown unknown territory. An insurer would probably still take your money, but may not actually pay out.

There are no short cuts in this profession in the end.

Bad English not a Problem

I don't think you need to know the difference between "of" and "off" or "its and "it's". Most people on AWeb don't have good spelling, grammar or punctuation and they seem to get along fine. Lack of qualifications does not seem to be a problem for many either, but for your own sake, why not try to get a job with an accountancy firm that will give you some training and some commission for introducing new clients? If you are good at bringing in clients, they might make you a partner one day. Alternatively, you could leave, once you feel competent, and then you could keep all the clients that come through your web site.

Swimming against the tide

I disagree - I think the OP could be on to something here so long as he thinks this through, partners carefully, and manages the process.

The mantra of not managing unless you can do it yourself is nonsense.  As Brian Clough, and more recently Nev, once said - surround yourself by good people and the rest is easy.  You cant be good at / have knowledge of everything - a managers job is to bring it all together using the right resources for the job.

So OP has a website which is getting clients on a DAILY basis.  Value and opportunity.  Type of clients and conversion we don't know. Nonetheless this is a website of value.

OP when ready will get in full time accountant.  In meantime, outsources work and gets it done in his name, with mark up.

Obviously there is a lot to consider, not least the management of the client, but I see opportunity here and others are only seeing problems? 

Mohamed - see my blog, may help: Thinking of starting an accountancy business? 

One final point, to pull someone up, or expect them not to succeed due to a couple of grammatical errors, is as ridiculous and embarrassing as it is mean spirited.

Hmmm

You remind me of someone...cant quite put my finger on it though...

Thanks - hopefully someone who encourages rather than knocks.

Why do the "clients"come to

Why do the "clients"come to you on the basis of an old web site? What are you claiming to be able to do that you currently cannot? Are you purporting to be an accountancy firm and are you still using words such as "chartered or "certified"?

If you are and before you get sued by the professional bodies change the wording and become a lead provider along with the many others in the market place.

Managed by non specialists
I also admire Hilary Devey, and she cant drive a truck, but what I don't like is being managed by the non specialist who never the less thinks they know everything about your job and don't realise that they don't.

Good luck to the op, maybe we have all been a bit quick to read this question, after all there are lots on a/web who seem to imply it must be simple to start a practice without any experience AND do the work themself at the same time.

Encouragement is over-rated if it is pushing someone towards a disaster.

Accountants are sometimes criticised for being cautious, but there's often a good reason for it. The OP's business model provides a good example. In theory it might sound plausible and might stand a chance in different hands, but there is little I have gleaned so far that leads me to believe that this is a goer. Thumbs-up to Paul Scholes.

Andy

On the basis of what has been written so far it is impossible to say whether this is a go-er or not.  That will depend on many factors.  It is certainly not a non-starter either.

Accountants are criticised for being over cautious, whether this is in nature or training, which is why so many achieve less profit than deserved, why they have a job and not a business, why they are too nervous to take risks to achieve, and why they see problems instead of opportunities. 

On the (brief) facts given here I see potential.  Yes, lots of questions to answer but potential nonetheless.

My first question would be if this website was / is attracting such interest, then why do the accountants (original client) not want it anymore?

I fail to see how this is any more potential for pushing someone towards a disaster than some of the posts on here from people setting up a practice to do the work themselves when they havent got basic technical knowledge.  At least in this case the work goes to qualified, experienced practioners.  I also think that this is morally better than accountants getting the clients in for ther numbers then shipping it off to a sweatshop in India or Dubai.

Good on you Jason

Although in many ways I agree with everyone else's views on getting experience first etc. I would like to thank Jason for sticking to his guns.

My marketing guru, Nigel Botterill. is forever telling me that most others in the same profession/business are wrong as far as marketing is concerned.

This is a classic case where there could be a business opportunity. Admittedly the OP doesn't sound as if he's got much experience in anything very much, and that would hold him back.

The model might just work for others with a few tweaks.

We're all going to have to keep rethinking ways of doing things. (I personally have never got over telling a boss I had 30 years ago that I didn't think fax machines would ever catch on.)

@ Jason

The OP has a good website. This leads me to believe he might be good at replicating the success he has had with other websites. In itself that could be a rewarding and profitable business. That's where my encouragement would be focussed.

To encourage him to follow his dream reminds me of X-Factor auditions. For almost all of them it ends in tears. In the OPs case he should factor in lost money, reputation and legal wrangles. Based on the information so far that seems a more likely outcome.

I know you do a fabulous job in supporting people in practice, but I would be surprised if you genuinely feel the OP has the raw materials based on what we know.  

Lots of pitfalls to be aware of

You would need a good experienced accountant to deal with the clients, explain the legislation, and the accounting and tax adjustments, etc. Also, the accountant should not need supervision or checks on the quality and accuracy of their work. Anyone that good would be working for themselves, so you are unlikely to get the quality of accountant you need unless you make them a full partner ... and that introduces a whole new set of problems!

Agree with the others

If you eventually want to set up your own practise, then I would try and get some hands on experience

If you are just after making money then I would consider finding a firm to work with where they pay a % of the fee to you on an annual basis for the lead

Thanks MoonBeam!

Andy - What I like about you is that you can tell me that I am talking b*******s and make me feel good at the same time! Great people skills.

I dont know whether the OP has the raw materials or not - I do know that there are as many reasons why this can work as there are why it can't.  Every problem that has been out forward so far by others can easily be overcome.  If the OP can buy in the (right) resource where needed for £1 and sell it for £2, whilst managing the process, then he has the potential for a business.  h

He has so far demonstrated that he has a process for capturing business, he knows the areas he is deficient and will seek outside help on, and he is looking at his pricing / profit.  More than some of the start ups do who come to me and I tell them to come back when they have thought things through.

Don't get me wrong, OP has a huge amount to do do get this idea up and running but to dismiss it out of hand is misguided, in my (humble) opinion.

Your second post of 12.16 refers to what most accountants in practice want.  Thats the point, OP is not an accountant and not in practice - he is looking to create a business.

Do you have money to burn?
All you have is an accountant website that ranks on Google and so generates hits. A good set up website for an accountant can cost say £1000 so a one that is set up generating leads has a value greater than that. I have been going through the process of setting my own site up for last 6 months and have found it difficult. With hindsight I would have happily paid say £2000 to £3000 for a ready made site that was generating leads and just needed tweaking to suit me.
A website is only a small part of an accounting business the best leads are referrals are generated by word of mouth and professional leads. These will come depending on how good a job your staff are at running the business.

If you did set up the practice and have it run under management the staff would quickly click on that is was them that are adding value to the practice and that all you bring to the table was the website which only has a value of a few thousand pound. There is a good chance they will see it as an Oppoutunity and break away from you taking the work away and leaving you with a website.

Why don't you stick to what you know and set up a specilaist provider of websites to accountants and other such professionals. Accounting Websmiths did very well and ended up bought out by one of the biggest software providers in the game

Failing that do a website specialising in rocket scientists generate some google traffic and then set up a business building rockets, I am sure NASA will be on the phone the next day.

PM if you could put a package together to get some traffic to my website.

Surgeons make a lot of money

So all I have to do is find a surgeon and pay them and do some marketing and have a generous markup and I will be rich without having any medical knowledge.

What could possibly go wrong?

Why not?

Isn't that pretty similar to Alan Sugar's latest venture?

Different business model,Jason
Alan Sugar has invested £250k for a 50% stake in the business I would imagine he is pretty much a silent partner who rarely sets foot in the place and certainly will not be running it day to day like the OP thinks he can. He is a business angel investor and not what this guy is proposing.

Glennzy

Is it so different?

Sugar provides the marketing, the capital, the business know-how, the experience, his circle of advisers, the planning, and so on and so on - and Leah provides the know how and experience of the trade and the selection and training of the right surgeons. 

Not at any time has the OP said that he would do the day to day running, quite the opposite he has explicity stated that he will first outsource and then employ people to do this for him.

Same scenario here as Sugar albeit it on a much smaller scale.  If OP works with the right person or people, those that provide the technical day to day service and support could benefit from his business model, and he could benefit from their expertise.  A win-win situation, which is what all good business is built on.

Personal service

Accountants clients want a personal service from their accountant. If they don't have that then they will leave. If they do get that from somebody who is not the owner the owner is providing a ready made client base for the accountant. When the accountant decides to leave who will the client want as their accountant? The owner or the accountant?

@Peter

Probably the most valid point made on this thread.  This is one of the challenges for OP to overcome and the need to choose partner(s) very carefully and to have measures, systems and data capture in place to protect accordingly.

@Jason

Totally different Leah owns half the business but did not have capital to go it alone. She will work hard as she gets half the profits which will,in turn deliver a return for sugar. Sugar brings massive PR marketing capital the likesmof which you cannot buyetc. this scenario refers to subcontractors providing the service who are unlikely to care that much as are not stakeholders in business. OP only has a website and no mention of any capital or vast business experience. This is not a business. If he said he had a large sum of money to invest in marketing and establishing an accountancy practice and was looking to recruit a newly qualified accountant for 50/50 then that's a different matter and more likely to succeed. As the accountant, if he works hard, should earn more than if he where employed, the more successful he becomes the better it is for the investor. Win win and that is the Sugar model not this hair brained scheme.

How would it work if he used subbies?

How does he give accounting/tax advice if he just uses subbies?

Glennzy

Obviously there are differences but the concept is the same albeit on a much smaller scale.

Obviously I dont know whether this would work as much as you don't know that it wouldn't.

We would need far more information as to the plan, and the characteristics of the OP.

I am not saying it WOULD work, I am saying that it COULD.  I know for a fact that I could make a business work without knowing the technical side.  That's not being arrogant, thats just a fact.  And there is nothing special about me so If I can then I certainly wouldnt write off the chances of other people doing it.

However, if you prefer to dismiss it out of hand, label it 'hair brained' and make sarky comments about NASA then that's your perogative.

ShirleyM

Options

 - Go for the market who want pure complaince work only; or

 - Get subbies to advise in co name

 - Use a panel of subbies for different queries

Clients briefed at outset as to delivery.

Why comparisons with Branson, etc. are wrong
Richard Branson, Lord Sugar, the Dragons Den lot each now manage substantial business enterprises. This means that they are able to draw upon substantial financial and human capital to solve problems and enter new markets that they have no personal experience in. The value that they add to their business enterprises is in the form of commercial experience, facilitators and drivers of the business.

A micro business does not have these inherent advantages that come with scale. Consequently, the comparison of Branson, etc. to the OP's start-up accountancy practice fail. It simply won't have the scale to carry someone that adds little value to the business. Indeed when Branson, Lord Sugar, etc. did start their own micro businesses, they were heavily involved in the day-to-day running of those businesses - it's where they started to learn their commercial experience.

When the OP's employee leaves then 100% of the production workforce and knowledge capital leave. The quality of the applicants also won't be very high. After all, who wants to work for a sole practitioner that knows nothing about the business and only get paid after the practice has been paid.

Bernard Michael also raised an important point. If this website is attracting so much new business, exactly what promises is it making to attract this business? Company accounts £350? Self assessment ax returns £50? Can the OP's proposed practice really deliver on this?

The questions raised by the OP suggest that he doesn't have much commercial experience, in addition to the lack of technical knowledge.

I admire the OP's entrepreneurial spirit, but in my opinion there is a high probability of failure here.

Jason Dormer,

One final point, to pull someone up, or expect them not to succeed due to a couple of grammatical errors, is as ridiculous and embarrassing as it is mean spirited.

When I was just a youngster, I corrected the head of practice for insisting a letter said      'that is a mute point'. But he WAS a brilliant accountant

Attention to detail

In my experience attention to detail extends beyond numbers.

Those that are sloppy with their English are often sloppy with other things. I struggle with spelling and grammar and have to make extra effort to compensate. When I see others making no effort I doubt sufficient care exists elsewhere.

It is neither ridiculous nor embarrassing to care about getting it right, it is to be expected of a professional.

In my book standards (and details) matter. Some might suggest that is the difference between professional and unprofessional.

Ifs and buts

and pots and cans

If you laid all the economists in the world in a line

they still wouldn't reach a conclusion.

Jason, the "theory" may wok under “perfect” conditions

but get real, perfect conditions don’t exist.

Communism fails for the same reason.

Mouse nailed it on his first post, this is doomed to fail, because no competent accountant will forever accept:

“I can pay the accountants what I want ”