Start-up accounting firms bounce back

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2011 saw more accountancy firms open than close for the first time since the 2008 crisis, signalling the start of a sector bounce-back, according to Bloomsbury Professional.

Bloomsbury has analysed the most recent figures from the Office for National Statistics (ONS) and found there were 4,210 accountancy start-ups in 2011 – 14% up from 2009, with closures down 16% over the same period (from 3,985 to 3,360).

The ONS ‘Business Demography, 2011’ report reveals a net gain of 850 accountancy firms last year, following a net loss of 360 firms in the preceding two years.

Bloomsbury said the market was stabilising and that the growth in new firms was the result of out of work number crunchers from larger firms and “laid off bookkeepers” rushing to set up on their own.

Martin Casimir, managing director at Bloomsbury Professional said...

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If only it were so simple

In addition to Mr Casimir's simplistic list you will also need a practising certificate, professional indemnity insurance and a knowledge of your Institute/Association's rules.

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Mr Casimir did say low barriers to entry for accountants didn't he... not necessarily qualified accountants (grin).

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Regional Differences

I wonder if there are regional variances and what they are.

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Is this the triumph of hype over hope?

 

I agree that it's a positive sign to see so many start-up practices. And I think it also supports my view about the growing polarisation of the profession.

As indicated in a couple of my articles for AccountingWeb I have however been surprised by the evidence that so many start-up practices have no real plans. That is they set up and have no real idea as to how they will find sufficient clients - or indeed what would represent an ideal client for their practice. Anyone with a pulse sometimes seems to be sufficient - not even 'a pulse and a wallet'. This approach sadly also reinforces the old boring stereotype of grey accountants.  

Much better to put one's accountancy training to good effect and to establish a business plan, determine the profile of an ideal client and ensure that your focus and niche is such that it is easy for friends and associates to advocate you to the right sort of prospects.  Then, rather than simply starting-up in practice, we might see more such firms thriving into their 2nd, 3rd, 4th years and beyond.  

Readers interested in this topic may find it helpful to check out the Start-up practice section of AccountingWeb.  A new edition of the AccountingWeb guide to starting up in practice will also be available from the same place very soon.  

Mark

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Finger on the pulse
Lovely to see AccountingWeb writing about the latest trends in the profession from... 2011!? Really, how useful is this?

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RE: DominicAhern

Hi Dominic,

I would have used more recent figures, if available, but as explained in the article the ONS figures for 2012 will be made available towards the end of the year.

We will of course analyse that data when it comes in and see if there is a continuing trend from the 2011 figures.

Rob

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Re: Robert Lovell

Hi Robert,

Sorry if my comments appeared cynical, of course it takes time to access the data.  It's just a shame it does take so long as it limits the relevance of interpreting it.

Best wishes

Dominic 

 

 

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start ups

How many have started on their own simply because they are being paid pittances whilst those employing them are charging huge fees for them. It is possible to work from home, undercut their fees, and still have a better hourly rate.

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Is there enough work to go around ?

I would think there would be more start ups in 2012 - it is rather bleak if you are an accountant looking for work as a) Difficult to find a suitable position b) Salaries are falling c) Less opportunities for progression. Hence they decide to start by themselves which seems a logical step.  However:-

More Accounting Start ups will mean more competition and lower fees in a already over crowded market.  The good news that many new businesses are starting up but the bad news to save costs these start ups are attempting to bypass the accountant and do everything themselves.  Certainly, hard work out there and will only get worse as the market gets saturated with accountants.  

 

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new start ups

He who would do his own accounts without proper training, has a fool for a client.

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Is there enough work to go around ?

He who would do his own accounts without proper training, has a fool for a client.

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