Brought to you by
myfirmsapp

Myriad Associates helps businesses maximise tax reliefs.

Share this content

How to start an accountancy business on a shoestring

28th Jan 2022
Brought to you by
myfirmsapp

Myriad Associates helps businesses maximise tax reliefs.

Share this content

Looking to start an accountancy business? Perhaps you’ve worked for accounting firm for while and self-employment is calling. Maybe you’ve been made redundant and fancy taking control of your own destiny for a change. Or perhaps you simply want something more flexible with hours that better fit with your circumstances.

No matter what the reasons behind it, setting up your own small accountancy business is very fulfilling, if a little daunting.

Here Myriad Associates offers some top tips to get your accountancy business off the ground, even on a limited budget.

Do your homework - then write a business plan

“It’s estimated that there are around 43,250 accountancy firms in the UK. The majority of these are fairly small in headcount- around 80% of them are made up of four or fewer employees, not necessarily surprising given the UK’s well developed freelance professional services market.” - NimbleFins

Before you dive in, make sure you research. Consider who your target audience is and who your customers will be. For example, will you gear your services towards other startups, microbusinesses or sole traders?

How do you plan to work with your clients too? Are you thinking of one-off bookings or working on a retainer or ongoing contract? Will you yourself operate as a sole trader or a limited company?

Also what services do you plan to offer, and what will your profit margins be? Will you provide any services over and above the usual accounting duties, like R&D Tax Credits for instance? And where do you see your own business going in future in terms of turnover, staffing and growth?

Only by doing your research and being clear about your goals will you know which path to take and how best to achieve them. And of course, check out your competition.

Decide how you’ll finance your startup

There are many different financing options and routes available for startups and small businesses in the UK, as well as funding options for growth.

Some people start a business simply using their own savings or with financial help from family and friends. Others take out loans or credit, whilst also securing startup grants. Angel investors and venture capital may also come into play, and some people even crowdfund.

Exactly how you finance your startup accountancy business will be as individual as you are. But if you're not sure where to start, there are some excellent websites out there that go through all the options in detail to help you make your decision. British Business Bank is one of them, as well as Startup Donut.

Finally, many local councils offer startup grants for new businesses but what each council area offers will vary. Therefore it’s well worth getting in touch with your local authority to see what’s on offer.

Register with an approved Supervisory Body

You may well be aware of this already but it’s well worth flagging.

Anyone that is offering accounting services in the UK must be signed up with a recognised supervisory authority.

There are a number of approved supervisory bodies for accountants and bookkeepers to choose from, including:

Also, don’t forget to register your business with HMRC for tax purposes.

Get business insurance

Even the most diligent of accountants can make a (costly) mistake. It happens.

Professional indemnity insurance is vital, even just for peace of mind. It will protect you financially if things go wrong and a client tries to sue you.

If your business does well and you later employ someone, you’ll also need to take out employers’ liability insurance (this is a legal requirement). Furthermore, you may well decide to buy public liability insurance, with additional cover for things like legal expenses and equipment.

Be careful here though. You may be on a shoestring, but cheapest isn’t always best when it comes to insurance. Make sure whatever cover you opt for adequately meets your needs, and don’t skimp.

Go social (media)

Social media is your friend. In fact, right now there are over 4.48 billion people on social media websites.

Gone are the days when it was all cats, babies and look what I made for dinner (although there's still a fair bit of that around!). Instead, social media such as Twitter, Instagram, LinkedIn and Facebook are all fast, easy and cheap (or free) to use and massively help to reach your target market.

We can’t stress this enough: When it comes to small businesses especially, social media is king.

Not sure where to go with this? SocialPilot's Social Media Marketing For Startups: A Beginner’s Guide offers a wealth of information.

Use digital software for better process management

Digital software means you can monitor your business in real time. Income, receipts, trends and the compilation of financial reports can all be viewed in one place, in turn allowing for more informed financial decisions. Not only that, but you can better advise your clients about their businesses too.

Cloud-based accounting solutions are growing in popularity, especially since the pandemic. They are particularly ideal as they can be accessed any time from any internet-connected device, making them great for remote working.

Myriad Associates recommends Xero, simply because it integrates fully with our Tax Cloud portal for any R&D tax relief claims you want to make later.

This article was written by Myriad Associates

Earlier we mentioned R&D Tax Credits - an extremely generous tax relief offered by HMRC to help fund innovative research and development projects.

Business growth typically means innovating new products, services and processes. And the good news is that with R&D Tax Credits you can claim up to 33% of the eligible costs back as a tax rebate.

It’s valuable indeed, but sadly the relief isn’t administered by HMRC automatically; companies have to apply for it.

Filing an R&D tax claim is a rather complex process, especially if you haven’t done it before. So, if you want to find out more about making an optimised, successful R&D tax relief claim - either for your own business or for a client - contact Myriad Associates on 0207 118 6045 or send a message.