Many new accountancy practices start-up at home. Is this as good an idea as it sounds? asks Mark Lee.
It’s obvious isn’t it? Starting from home keeps overheads to a minimum and is the easy way to start up in practice especially if you have yet to leave your previous job. I agree. But there are other factors to consider too.
In this article I intend to explore some of the key arguments for and against starting up at home by highlighting some of the other options.
Physical vs virtual
While you may not need a physical office away from home you may still want a virtual one. Most cities have facilities that allow you to have virtual office facilities that give your practice an address with more credibility than a residential one.
Virtual offices provide an address for the post and will typically allow you to book meeting rooms just as and when you need them. There are the huge well-known branded serviced offices in almost every city and also some more individual local facilities that can be traced through a quick internet search.
A practical disadvantage though of a virtual office of this nature is the need to visit to collect your post – unless you pay to have this forwarded, which means you get it a day or two later than the sender might have expected.
Another option is to go one step further and to rent space on a short-term basis from a serviced office facility. This will often mean you have a secure room in an office building with its own reception, security and phone answering service.
A half-way house might be to start-up by renting space from another practitioner or in a hub of some sort for local start-up practices.
Alternatively you can arrange for a virtual answering service who will answer your calls as if they were your own reception. They then take messages or transfer calls to your mobile or landline number.
Your own space
I tend to think that most accountants with their own offices did not start-up on their local high street, close to the high street or in a local industrial park. By which I mean these options are probably not ideal options for most start-up practices. The practical reasons being the minimum length and costs of taking a formal lease and of kitting out the office.
It would be interesting to hear from any start-up practices that first established themselves in their own office space on or close-to a local high street or industrial park.
PO Box number
You can of course arrange for a Post Office Box number and for post sent to this address to be delivered directly to your home. This arrangement also has the advantage that you can designate an alternative delivery address for the Post Office if you relocate (home, office or both) within the local area.
You need to include your business address on your website. What image will your address give to prospective clients? Will they pay any attention to it at all? I can’t answer that – nor can you, unless you ask some of them. What matters is the perception of prospects and clients. You would need to ask some to get a clear picture. As a rough guide it may be more important to established business clients than to start-ups and to pure tax return clients.
An accountant who started their practice a few months back told me that he has found out that his client base of professional people take him more seriously because he has a city centre (serviced office) address rather than a residential one.
The Google effect
Remember the power of Google. I’m not suggesting that prospects will use the streetfinder facility to zoom in to see whether your office is at home or in an office block. But some might I suppose.
I’m more concerned with the search engine optimisation (SEO) issue: These days Google search results show local accountants on a map. Do you want your office to show up by reference to where you live or by reference to the area where you are targeting prospects? If the latter you need to have an address there.
As a start-up perhaps you intend to work alone initially. Alternatively you may be quite happy for any support staff, colleagues, part-time staff, contract workers or a virtual assistant to visit you at home. Or you may not.
Do you want to limit your expansion and the efficiency of your practice by virtue of your initial desire to constrain costs and start-up at home?
It’s all too easy
These days almost anyone can start a business or an accountancy practice at home. We would like to think that any qualified accountant choosing to do this would have the skills and experience to prepare at least an outline business plan beforehand. That they would have considered the practical, commercial and strategic issues and made an informed decision about where to start their business. Some of the questions posed in Any Answers though suggest that this is not always the case.
One argument I have noted is that you can charge lower fees if you start-up at home as you have lower overheads to recover. This is true but it does rather tie you into servicing clients who are especially fee conscious. And what happens if your business is successful and you need to move out. Will you expect your initial clients to pay more because you now have higher overheads? Why should they care? They will be receiving the same service from the same accountant.
The contrary argument is that by incurring rental costs from the outset you are forced to consider a sustainable business model. This can also provide an added impetus to build the practice faster than might otherwise be the case if you were based at home.
Will you be lonely?
Some people who work at home find it lonely. This can also happen if you have an office elsewhere until and unless you have staff or someone else working alongside you.
Whether you find it more lonely working from home depends on your personality and your preferred approach to working. I quite like it. But I do notice that I tend to be more active on social networking sites (especially Twitter) on the days I work from home.
The level of contributions to AccountingWEB by way of comments and Any Answers by some accountants suggest that they too may be ‘lonely’ at work. My point is that, these days, there are ways to overcome the issue. You can also attend more face-to-face networking events and build relationships that can replace those you used to have when you worked in a larger practice.
Working from home saves the cost of commuting – whether by car, train, tram or bus. It also means no time wasted commuting. But maybe that is productive time for you. For example, when I was in practice I did all of my professional reading on the train. Other people use the time to gear up and plan the day ahead and to unwind before reaching home.
Will your saved commuting time convert into more productive billable time? Or will it give you more non-work time? As part of your start-up plan you need to decide how many hours a day you are prepared to spend working.
Some people like the structure of having fixed office hours (as far as possible) and find this discipline easier if they work away from home. Similarly some people find it easier to focus on work issues in an office environment that does not contain the distractions of their home.
Then there is the issue of whether you want clients coming to your home – at all hours (as they know you’re there)?
I suggested above that office facilities could give your practice an address with more credibility than a residential one. This may or may not be relevant and you may want to start-up from home regardless.
What you might choose to do then is to give your house or flat a business sounding name and to include this in your address. So, for example, instead of being Joe Soap, Accountant, 5 Beehive Lane, your address might become: Joe Soap, Accountancy House, 5 Beehive Lane.
Did you start-up at home? Are you still based at home? What other issues do you recommend that start-up practices take into account?
Mark Lee is consultant practice editor of AccountingWEB and writes the BookMarkLee blog to help accountants build more successful practices more enjoyably. He is also chairman of the Tax Advice Network of independent tax consultants.
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