As a small practice owner, like me, I have no doubt you are tied up with the day to day. Despite attending seminars/day events about how to get that million in fees when I (you) get back to base nothing changes. Does it?
It is only this week, now that M’s contribution has increased substantially, that I had a good look where I stand as a small practice owner.
I do not think you can say comparing employment to being a small practice owner is fair. If we were to compare my final salary to my current income, then I have failed miserably. But then this is short-term thinking.
When I reviewed my client base and my total fee income, I felt such great sense of achievement. Like others here, I started with zero clients. I now have an okay but no way enough client base. Yet, it makes me feel over the moon. There is no way; I would be able to get such job satisfaction in any employment/partner. Even it means working as a CFO of Virgin. Not that Branson would consider me for such a post.
In the end, I would be an employee. I would not have total control over my destiny. I think, like it or not, most of us are control freaks.
Bottom line, my figures revealed, I would have a far less stressful life working 2-3 days work in a job that is well below my skill level. My net income would be about the same level or higher than what my current income is as a practice owner. The Dragons in Dragons Den would say to me close down and get a job! Alan Sugar would say “You are fired!”.
I want to carry on being a low paid practice owner. Why? (!). It is simple – I love it, and I am a complete control freak. I hate to ask others for approval if I can do X or Y. I love the flexibility that I have. Though the hours I put in are higher. The key difference is I am doing it for me, me, me and I do not have to ask or even listen to others how I can do it better.
I now have a clear brand and systems that are 80% there. M is proving to be a good employee. From here, there is only one way, and that is up. Damn it, the competition is fierce. It is a challenge. I will find ways to beat it.
Will I get that part time job for a comfortable life? Never say never, only if job satisfaction cannot pay my bills. I think the more important question is will I be able to adjust to being an employee?
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Replies (26)
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Each to their own
Glad you're happy with where you are.
I've always taken a different approach - that, with the risk and stress of being a business owner, I'd want an income significantly above what I'd gain in an employment to make it worthwhile. There's a lot to be said for a job where you can leave and switch off at 5.30 every night, and take 2-week holidays and not be glued to a smartphone. If I'm giving that up, I want compensation.
However, we all have to make our own decisions, and if you're happy for now with your situation, then that's what counts.
Thanks (0)I'm with FirstTab
I think it depends on what causes you stress and how much money you need to be happy. I always found my (far more lucrative) employment much more stressful than my poverty-stricken self-employment. The only thing I would do with more money is retire earlier, but the increased unhappiness caused by the jobs I have had would be too great a sacrifice to make.
Thanks (0)Why?
Why are you making so little income?
I am working from home with no employees. My income is greater than any job I have ever had. I get a lot more satisfaction than in any job I ever had.
The big differences I know about are that you have an office that you have to pay rent for and you have an employee.
I have a lot of clients but I get them to either use software or spreadsheets to prepare their accounts. I then only have to do a few checks, a few journals and an ETB in Excel and then put the information into Digita and work out the tax.
There is stress dealing with a lot of clients and some clients contribute to that stress.
If I had an employee I would have the hassle of managing them.
Another difference I do see is that you try to not do client work. This means that your employee - a relatively low level accountant - has to earn sufficient income for both of you after covering your expenses including rent and her wages.
I'm hoping to wind down as my clients reach retirement age, die, get jobs or emigrate. I haven't done any marketing for a long time so I have relied on referrals and my website. Yesterday I was contacted by a famous musician after he'd seen my website. I'd like to do a lot of work on my practice by improving my website, set up a portal, use software to identify additional services and use social media effectively. This is all to have fun rather than get extra work although I'd accept more work despite the increased stress!
Several years ago I had a reminder of why I didn't like employment. A consultant who provided me with some work asked me to be a temporary FD for one of his clients who had sacked their FD. After a while they asked me if I would be their full time FD but I turned it down because I would have had to be paid more than the Chairman and MD for it to be worth my while. I wouldn't have taken the job anyway due to my love of self employment. What convinced me that I had made the right choice was an issue over wages. The wages were very complicated because a lot of commission was paid to project managers depending on profits to date on projects. The MD wanted to OK the wages because there may be issues I didn't know about. There was a deadline to pay the wages but the MD seemed oblivious to the deadline and even though I would remind him about the need to review the wages he would always say he was too busy. One time I paid the wages with the information I had when the MD wouldn't review the wages. The MD went wild saying I shouldn't pay the wages without his say so! The next month the MD wouldn't review the wages again and I didn't pay the wages despite reminding him regularly. The employees were paid their wages late and the MD went wild saying that I had always to make sure the wages were paid on time! It's my opinion that too many idiots get put in positions of responsibility in business. A few months after I left the company went bust.
Thanks (0)I'm with Peter
I earn more now than I ever did in employment.
For the last 9 years of employment I never had a role where I could leave at 5.30. I probably worked 45-55 hours every week, add on the 3 hour commute each day and we're looking at 60-70 hours a week.
Now I work around 40 hours a week.
Stress - that used to be pretty full on, now it only tends to be when I don't feel as though I've done enough at the end of a day.
@FT - why is your practice not providing you with the level of income you want/need? You've made numerous posts about how your marketing is working and you're signing up new clients.
Retirement? It's a way off for me and I think it will either be a gradual winding down of the business/sell blocks of fees every couple of years or a build the business up in the last 5 years and then sell it.
Thanks (0)Accountability to myself
Thanks for the response on this thread.
I never intended to work from home or garden office and/or on my own or with a bookkeeper. For those, who want to work this way, I understand that is the way they would like. It is THEIR way.
My expenses are high with an employee, a lovely bigger office and integrated software.
I would not change anything I have done or intend to do. That is one big plus of being self-employed it is MY way without accountability no one but myself.
Thanks (0)The model you have means that you are paying a premium for your overheads when compared to other practitioners.
If you want more income from your business you will have to expand considerably or change your model.
Thanks (0)I understand totally
I have made the same choice.
I worked extremely hard when setting up my practice but now (many years later) take it easy. I like to keep work & home life totally separate, so an office/shopfront helped achieve that. I have a superb employee who takes away most of the work I don't enjoy.
This does mean that I earn less, and it wouldn't be workable for those with dreams of villas abroad or fast cars, or those with children who need university fees, etc., but it suits me and I consider myself very fortunate that I am able to make that choice. I prefer an enjoyable and stress free life in comparison to money and I have no desire to earn, or accumulate, vast amounts of money that I don't need.
I am lucky in that I am financially comfortable, and have no desire for the expensive trimmings and accessories that many people seem to crave.
Thanks (0)I've been in the situation where I was a high earner, in IT, and although the money was nice it started ruining my health so I quit....no point having all that money if you're dead :-)
I took AAT level 1 & 2 last year and hoping to start level 3 soon online. I'm also developing a website to start doing bookkeeping. At my age, 58, not only would I find it difficult to find a job, but I don't want the stress of working for other people in some menial task. I like the freedom. If I can find enough clients to bookkeep for and maybe do the odd website here and there I'll be happy. The house is paid for so at the end of the day I just need to pay the bills.
I did the bookkeeping for my brother's limited companies over the past year, which I setup for him at Companies House, filed the dormant accounts, built one of the websites, SEO and god knows what else, so I'm sure I'll be able to make some sort of living.
Be confident...follow your heart!
Thanks (0)Each to their own
So far, I have chosen to follow the Peter Saxton / Kent Accountant model. It has given me a greater income than I had when I was last employed and the freedom to do other things outside of work.
From what I have seen in other accountants' practices, once you rent an office, employ a couple of staff and all of the infrastructure that goes with supporting this, you often need £100k in fees just to break even. I'm the sort of person that values simplicity and I would hate the worry of having a business that has to generate a lot of fees simply to keep the doors open.
Over the years, I have seen a few practices where the owner has effectively wanted to become non-client facing and devote much of their time to marketing and administration (which if I understand FirstTab's aim is the direction that he wants to follow, although I acknowledge I may be wrong in my assumption). However, these practices have always had limited success. The "brand" of a small practice (insofar as they have one) is really that of the owner. If the owner has limited client contact, then the brand becomes confused.
Thanks (0)I am at the tipping point.
I am sort of now at the stage when I am earning similar amounts of money to when I was employment but without the hassle, long hours and lack of appreciation shown by my employer.
In 2016 I have more work coming off and I hope I will feel the benefits of the last 2 years struggle and start to earn a bit extra than I could in employment to make it all feel more worthwhile.
Thanks (0)I was on a fairly decent salary before I setup on my own, but I'm probably earning double that now, and far far happier: As an employee I was never able to switch off at 5pm and go home, so there's been no major change there.
Unlike FT, I don't enjoy managing people, I enjoy doing the actual accountancy work too much, plus I don't like the commitment of having employees or an office, which does keep my overheads very low.
Unlike Shirley, I do enjoy fast cars, bicycles, shiney techy things and I have education costs for 2 children for the next 19 years to pay for! Which is actually quite depressing. And whilst it's improving, I still haven't mastered the ideal work/life balance yet, but I am spending more time with my children than i could have done in employment, which is the main thing.
I have a client that I see regularly 100 miles away once a month, driving in the rush hour traffic, leaving at 7am, with all the commuters, is enough to remind me I made the right decision! Mind you, I'd probably be an awful employee now.
FT - you are moving in the right direction I hope? Gradual net increase in clients?
Thanks (0)I must be doing something wrong. I can't see myself earning anything near what I did when I was employed. I seem to spend too much time answering queries from clients and doing bookkeeping, even with tools like Receipt Bank. I had assumed I was not making much because the service I provided is not very specialist but many of you seem to have very small clients too, so I don't know what I'm doing wrong.
Thanks (0)instant thought
Bookkeeping = low profits?
Thanks (0)Don't understand.
Sorry Red Leader, I don't really understand the question.
Thanks (0)A lot of truth in this
I agree that bookkeeping = low profits. I still do some bookkeeping, for various reasons, but try to stay away from it. The same with "proper" payrolls (i.e. non-director payrolls). Bookkeeping results in you becoming overwhelmed with lots of small issues to deal with and there can be a constant stop-start as answers dribble in.
It possibly makes sense if you have a low paid employee or wife that can look after it all, but if the sole practitioner is doing it, then the margins are usually too low, even if using cloud bookkeeping to improve efficiency.
Thanks (0)Peoples attitudes change over time
I was a workaholic up until a few years ago, but I no longer have the energy, or the compulsion, to dedicate myself 100% to the practice.
My attitude has changed and that is maybe because I am well past the date for my retirement.
I just work part time now, and my earnings are just fine for the hours I do. I would like to work even less hours, and am hoping to achieve that very soon.
Thanks (0)Bookkeeping
@Chatman - anything that takes more than 30mins a month (that can't be charged/costed at my target rate per hour) is outsourced with a 100% mark up.
Receiptbank - don't use it and never intend to - that's for clients to use themselves or for bookkeepers (see above).
Thanks (0)Bookkeeping
The problems are where I don't offer bookkeeping. The clients do it themselves but often have questions about how to book things, and I often spend time telling them when things have been booked incorrectly.
Thanks (0)Blocks of time
Could you suggest that you have a review once a month when they ask you questions and you explain what they have done wrong and then you can charge them for the time you take and there wouldn't be so many interruptions?
Thanks (0)Blocks of time
Yes, I think I need to do something like that. My new time recording software will help me with that. I think. Thanks.
Thanks (0)Chatman
You are not in the business to train people how to be bookkeepers. Or are you?
Thanks (0)Firsttab if you were the Apprentice
How would you describe yourself:
The Swiss Army knife of Accountants
or would you be the guy that tries to sell fish to the Vegan.
I love the Apprentice and the clowns who go on the show, where do they find some of these people.
Thanks (0)Which apprentice?
FT would be the apprentice who follows a route that is bound to fail but continues because he's doing it his way.
Thanks (0)First Tab would be the only apprentice that has an intern.
Thanks (0)Great thread
Thank you for making this an interesting thread.
Sheepy306 - Overall in the right direction. I only have one real PITA client. Others are reasonable most of the time. Over a net gain in client number.
Glennzy - I have not watched Apprentice for a very long time. I think BBC editing make the candidates look like fools. As you know, they went through a tough selection process to get to where they are. I am sure the candidates have the talent. They cannot be as bad as they are portrayed after editing. Candidates want that opportunity which makes them behave in a crazy way at times.
If I was on the Apprentice, I would be the person who would not listen to Sir Alan or his advisers. As Peter says, it would be my way and I would be shown the highway with my poor intern, by Sir Alan. I would not get on with Brady. I think she would through me out before I get to the boardroom.
I think I would be The Swiss Army knife of Accountants!
I will now watch the Apprentice, I am feeling left out.
Thanks (0)Brady
Saw Brady speak at the Xerocon in London last year. Seemed very pleasant and likeable. I think the whole Apprentice thing is very much playing a part.
I know The Apprentice is crap and does a massive disservice to business in this country, but I just can't stop watching it......
Thanks (0)