The 10 fears of start-up accountancy practices

Over the years I have noticed a number of similarities in the fears, worries and concerns shared by accountants as they start their own practice, explains Mark Lee.

These issues become apparent when we speak and are also evident from the topics raised in the Any Answers section of AccountingWEB.

The fear of failure

Some people use the fear of failure to drive them forwards. Others refuse to countenance the idea of failure. Some may be paralysed by such fear and the remainder have not even considered the possibility – often due to naivety. I would encourage you to move into one of the first two categories.

You don’t need to plan for the...

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Comments

Being forced to return to work for someone else    3 thanks

Tickers | | Permalink

This would be the biggest fear for me.

stevepipehome's picture

These case study videos are a big help

stevepipehome | | Permalink

There are loads of case study videos online in which successful small firms give start-ups loads of key insights so that they can successfully address most/all of the issues Mark raises above.

Two really good ones are

1 – Accweb’s own video on their 2013 small firm excellence winner Coalesco – http://www.youtube.com/watch?v=gh8TJH-KuBw

2 – The story of Steven Briginshaw’s spectacular first 15 months in practice in Reading - http://www.youtube.com/watch?v=VHtSjGEstxE&feature=youtube_gdata

lme's picture

being repimanded by your professional body    1 thanks

lme | | Permalink

if your procedures aren't up to scratch?

Or am I being paranoid, with my first visit on the horizon...

Not many    1 thanks

Ambereen Shamsi | | Permalink


I was once told that the most important thing is to recognise what you know and what you don't. Once you do that then most fears are dispelled.

new practices

taxagility | | Permalink

Investing in good software, provides a great platform from which you can be confident selling services...these days there is excellent software available to automate most functions. I think new practices have a distinct advantage over old practices as they can design their business processes from the ground up based on cutting edge time saving technology. 

What is possible

malcolm141 | | Permalink

What about Crunch with fee income of £2.3 million in four years?

Sackmans Accountants

peter__hall's picture

Know thy strengths    2 thanks

peter__hall | | Permalink

1. Know your strengths

2. Employ to your weaknesses

3. Get the right software

4. Don't try to be all things to all people

5. Try to get monthly fees rather than annual.

6. Keep away from "positive thinking" speakers...they don't know your situation and therefore their wisdom may not apply to you. Be realistic.

7. Charge your worth. 

 

Peter

Jason Dormer's picture

Start ups    3 thanks

Jason Dormer | | Permalink

Good article Mark and great advice above from Peter.

I speak to new start ups on a regular basis and your points sum up their main concerns, the top of the list being getting new clients, pricing, and (sadly) failing.

The fear of failure is far more of an issue for accountants and bookkeepers than it is in any other sector.  I think that this is the number one reason stopping many capable accountants from starting their own practice, opting for the safety net of employment.

Whilst I have no time for people in business who do not take their responsibilities seriously, and go from one failed venture to another, I do think that accountants need to be less risk adverse and sometimes just have a go.

What is it about a failed business that is so scary to so many?  There are far worse things that can happen to someone, and worse case scenario, even if the busines does fail, the owner would have learned invaluable lessons to take from it.

I think that accountants need to conquer this fear, and use it as a positive driving force.

Taking too long - That will depend on the marketing, the pricing, the business skills and the opportunity spotting of the owner.  It should be an easy and do-able target to aim for £40k income in year one and then increase this year on year.  The tax benefits of profit extraction from the business will also mean that owners do not have to make anywhere near the salary levels of their current job, to match the income.  Would be owners need a strong marketing plan, strong business plan, and need to choose their clients wisely.

 

Being forced to work for someone else - Why?  Even if the business struggles, approach other firms, merge, partner, outsource, do whatever it takes.  After 12 months plus working for yourself I cant see why anyone would ever want to go back to a paid job.  The skills learned within those 12 months should mean that they don't have to.

 

Charging - again so many accountants underprice, undervalue, go for the easy win, resulting in too many clients paying too low a fee.  The clienjt bank should be built on quality not quality and that includes paying for the expertise and service given.  Whilst in the start up stages and unsure how to price, there are many ways round this, not least to say at outset that there will be a bi-annual review.  Also never give away all advice and support, this is a recipe for disaster, if it must be included within the fee at the very least caveat it and have a fair use policy.

 

Not knowing how to advise a client - Stick to the knitting, niche, partner up there are plenty of resources available for this gap.

 

Fear of being sued - Go limited, get comprehensive PI, have a riskm policy, dont take on idiots, scope every engagement, get the paperwork done, dont stray from core work, second opinion on complex issues, over deliver, start off with low risk clients - whatever it takes - fear of being sued is/ should be so easy to overcome.

 

Fear of losing clients - Don't give them any reason to leave,  Ever. but factor in to the business plan natural loss through retirement, back to work, insolvencies, price shoppers etc.