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Starting your own practice: 3 tips from those who've done it

14th May 2024
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Sage is the market leader for integrated accounting.

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There are so many reasons for starting your own accountancy or bookkeeping practice. Whether you’re working in industry or within an existing practice, you’ll be joining a wave of people looking to start their own firm.

People talking in an accountancy practice
Sage

According to the New Startup Index from Natwest and Beauhurst, over 900,000 new companies were incorporated in the UK in 2023, making it a record year for new businesses. With the chance for greater flexibility and independence, the ability to choose your clients, as well as build a business from the ground up, it’s no wonder more people want to set out on their own.

Yet, achieving flexibility and work-life balance in the first few years is notoriously difficult. It is key to plan ahead for clients, cashflow, and an unpredictable economic climate. 

In our recent webinar with Accounting Web, we heard from two inspirational practice owners, Samantha Mitcham and Jonathan Goff, on how they set up their practices for success, their advice for like-minded entrepreneurs, and what they wish they’d done differently.

Learn more about Sage for Accountants

Why to go it alone

For Sam Mitcham, one of the main reasons for starting SJCM Accountancy was the ability to be flexible with work hours. “I have a daughter who just started high school but back when I started the practice, she was still at junior school. I wanted to be there during the school runs and log back on in the evening if needed,” says Sam.

Jonathan Goff, the director of JPG Accounting, shared a similar motivation. “Flexibility was the main driver for me, along with the fact that I just don’t like working for other people. I like to be my own boss, I like to be in control, and of course, that comes with responsibility. If anything goes wrong, that’s your responsibility,” says Jonathan.

So, how can you give yourself the best chance to be flexible in your business rather than work nose to the grindstone? Chris Downing, the Director of Product Management for Accountants and Bookkeepers at Sage, recommends the following:

Tip 1: You need a business plan

You need to understand where you think you might be in a couple of years’ time. This should be something you can keep referring back to and updating as your practice grows. Your business plan needs to set out your main purpose: who do you work with, and why do you do it? 

You’ll also need to establish the legal structure your practice will take – will it be a sole proprietorship, a partnership, or a company? You can include market research, customer analysis and SWOT analysis in your business plan, as well as financial summaries and forecasts to show how your practice might develop in future.

For Sam, her business plan evolved over time. “It was as simple as, where am I going to find the clients? What should the finances look like? What equipment do I need at an absolute minimum? So much has changed since then, and I am so glad that my business plan wasn’t super rigid. To be honest, I didn’t envisage myself having three members of staff at this point. I think it’s all well and good having a plan but you have to allow for movement,” says Sam.

Jonathan built JPG Accounting by starting the practice first as a side hustle, then building a client base over time. “Like Sam said, there are lots of variables and things that could go wrong. What I will be doing in a year may not be what I do in two years’ time,” says Jonathan.

Tip 2: Get the right software

What technology will help you save time and mitigate the time spent on admin? And how do you nail that from day one?

From your day-to-day accounting work to client and practice management, you can make every aspect of running your firm more efficient with the right software. First, consider what technology will help you automate data capture, bookkeeping and accounts production, as well as practice management and customer relationship management platforms.

Crucially, you want to see your software setup as a connected whole – whether that’s by implementing an integrated suite of software, or setting up a tech stack that can help you manage pricing, billing, bookkeeping, accounts production, and more.

“When you’re setting up the practice, it’s often easiest to use the tools that you’re used to. And that’s usually good old Excel. The trouble with Excel is that it’s fantastic to start with, but at some point, whether it’s 50 clients, 100 clients, or 150 clients, your spreadsheets will either break or become totally unmanageable,” says Chris. 

For Sam, relying on Excel in the early days of her practice rather than employ a dedicated practice management software was “in hindsight, a mistake in thinking that I could record the bulk data of clients on Excel. I saw practice management as something that I’d implement further down the line. Now, I absolutely would recommend that everybody looks at that one from day one.”

“You can now do everything from quoting to anti-money laundering (AML), engagement letters, submitting Companies House submissions and tax returns, right through to practice management, through your accounting and bookkeeping software. Look for something that gives you that entry level, which can grow with you and your practice,” says Sam.

Tip 3: Build your network

Accounting can be a challenging, stressful, and often lonely profession at times, even when working with clients. Chances are you’ll find yourself working long and unsociable hours, especially in the early days, and if things go wrong, you’re ultimately the one who needs to answer for it. 

Chris argues that building a network of people in the accounting profession that you can turn to for advice and guidance, whether to scream and shout or talk about how your week is going, is just as important as having a business plan.

Two other ways to build your support system is to outsource or partner. Partnering with bookkeepers or other accounting and bookkeeping practices, external experts or other practices for R&D work, specialist tax services, business recovery and insolvency is very common. You might also consider joining a professional membership bodies like the AAT.

In the early days of building a business, Jonathan turned both to the AAT and Sam for advice on growing the practice and finding clients. “Social media is also a great way to learn from others,” says Jonathan. 

Next steps

Starting an accounting practice will always have its fair share of highs and lows. That’s why it is essential to have a practice software and human support by your side.

Try the Sage for Accountants Free Plan

Sign-up for the Sage for Accountants Free plan and get the following allowances at no cost:

  • Accounting Plus subscription for your practice

  • Payroll subscription for your practice (up to 50 employees) 

  • Free Final Accounts and Tax for clients

  • Free HR essentials with Payroll subscription

  • Client Management for your practice

  • 10 AutoEntry documents and 5 AutoEntry bank statements per month

  • 1 GoProposal client proposal, 1 GoProposal Smart Engagement letter and 1 GoProposal KYC (Know Your Client) Risk Assessment per month

  • Listing on Sage Accountants and Bookkeeper directory 

  • Expert support and training 

  • Sage member benefits

  • Member only discounts on Accounting and Payroll for your clients

Sage for Accountants is for practices wanting to automate pricing, client engagement, client management and data entry to support clients. Find out more about how Sage for Accountants and Bookkeepers can help you set up for success here.