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Setting up practice after 15 years in industry?

Should i stick to what i know and stay in industry?


I'm an ACCA qualified with 15 years of industry roles in Banking, Retail and Pharma.  I've never done any technical practice work, other than some very simple book-keeping (more as a favour), simple tax returns and i have some brief training on CT600's.  My strengths lie more in budgetting, forecasting, monthly close of accounts, etc bread and butter commercial accounting activities. 

I find myself with two small children under the age of 4 considering setting up on my own, which does sound crazy, however the thought of going back into some of the crazy hours and stress of corporate life fill me with dread.  

I have made contact with a practice who is willing to provide some mentoring/training, and they do know my plan so they understand where i want to get to.  I will also be bringing in an income with some part-time contract work (in industry) as i build my client base.  I have a business plan which sees me getting around 30-40 clients per year and with the intention of being on my current salary by the end of year 4 and able to focus solely on my practice.  My questions (other than am i mental, should i just stick to what i know) are:   

1. are my estimates reasonable?

2. how many clients can one person reasonably deal with - is c.160 ok?

3. has anyone else had success building such a business working from home? Can it work?

Any other tips and advice gratefully received


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19th Nov 2017 20:40

If you've no experience of practice, you don't know how different it is and you will need a couple of years at least of working for someone else before striking out on your own.

If it's flexibility you're looking for, why not go contracting?

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19th Nov 2017 21:32

1. How are you going to bring in 30 clients/year? How much will you charge these clients?

2. Depends on what type of clients they are and what you are doing for them. If they are landlords and just require a simple tax return based on a pre-prepared spreadsheet then 'yes'. If they are a large limited company importing and exporting and require bookkeeping, intrastat declarations, payroll and auto-enrolment for employees, etc then no (160, would be way too much).

3. I've heard anecdotally that it is do'able if you are prepared to work hard and do things one step at a time. You can always visit clients, call them outside of normal office hours, meet in a mutually convenient location, or invite them to yours if you are comfortable with that arrangement and have public liability insurance.

Tips: Study ATT (a tax qualification, and ideally CTA) and apply to ACCA for a practising certificate (although you may need 3 years of relevant practice experience for this).

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to GR
19th Nov 2017 21:45

Hi GR,
thanks for responding, the idea is to start very small, simple tax returns, VAT returns, focus on individuals and then grow to Small then Medium Enterprises. I have a number of people already asking me to help, two clients immediately, one individual and one small business. Doesn't sound much, but it's a start, and the idea is to supplement it with freelance work from the practice who has offered to help.

I have a full marketing plan - across the board from simple approaches, to social media, classic advertising and when i get more experienced, possibly even approaching retiring accountants. I really want to be my own boss, and work from home if possible and the plan is to get there in 5 years, which i think is a reasonable time span...(btw am basing my maths on an average fee of around £400 - northern home counties)

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19th Nov 2017 23:34

I guess you are not expecting ACCA to issue a PC without the relevent experience, so I assume you are intending to resign your ACCA membership? You don't say as much but as you are intending to be signing up clients right away then I would think that would have to be the case.

Losing your ACCA membership will presumably make it harder to get good part-time contracting roles in industry so did you budget for a possible loss of earnings if you need to settle for lower paid contract work? Possibly not an issue if you are contracting for firms that already know you. The key thing is not to get yourself into a difficult financial position that will increase stress and make life difficult, especially with young children to take care of. If you think corporate hours and stress in industry are hard, I think you'll find the hours and stress in practice to be far far worse, certainly in the early years.

As suggested above it may be better to work for somebody else in practice for a couple of years before signing up your own clients - that way you may even be able to get the PC so you don't have to lose the ACCA membership when you do want to start on your own, and the experience will ease the stress of the transition.

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20th Nov 2017 07:27

30-40 new clients a year is a lot more than I've ever dragged in.

Admittedly, I'm at the back end of my career now and not looking to build uo an empire but I don't think I've ever had that many new clients.

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By Mr_awol
20th Nov 2017 17:46

Personally I'd be careful. It's only because you say that you have a practice willing to 'mentor' you that I even think you should entertain it.

A lot of practice life is fairly easy. There are, however, a large number of things that someone without practice background may well be blissfully unaware of. In many ways it's better to be wrong about something (because you might think to check it) than to simply not even know to consider it.

More importantly though you say yourself that your strengths lie elsewhere - in areas that will be rarely used in practice. If you think that you can get some basic accounting and tax clients and then try and upsell your management accounting knowledge then you may be disappointed.

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21st Nov 2017 15:37

I deal with more than 160 clients but they vary so much in size, 5 small can equal the bill and time of one much larger. So, it's impossible to give a number.

Think about the services you are going to provide - tax has become increasingly complex. Even the simple things are fiddly to get right as hmrc systems are often cumbersome. Do you have the appropriate CPD or plans to acquire it? Plan also where you will source your ongoing CPD. The mentors (your alternates?) might help advise if you are in their area.

If you are going to be a sole trader you will have an awful lot of paperwork to get your head around too. Take a look at practice assurance questionnaire as a starter for ten. I'm not a sole trader but I do undertake all of this work for our small practice and it's very time consuming and you have to stay a step ahead legislation, rules and changes.

Personally, I think you'd be better taking intermediate steps of some sort first and, perhaps you might, if you don't yet have a practicing certificate?

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21st Nov 2017 16:22

A bold idea, but have you decided how you determine, in advance, what is, for example, a "simple Tax Return"?

You'd be surprised at the complexity a hitherto mundane client can introduce after a beer and a whim.

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