Are you thinking about starting a tax services or bookkeeping business of your own? The time is right for entrepreneurs with these kinds of skills. Here are some of the reasons an accounting-related startup makes sense.
Clients Are Plentiful
No matter what niche of the wide field of accountancy you choose to specialize in, you will not be at a loss for customers. In every kind of economy, people who can keep accurate financial records, prepare individual or commercial taxes, or offer an eclectic menu of services are in high demand. The trick is deciding where your skills lie and what you enjoy doing.
You Can Earn a Degree While Working
When you run a one-person enterprise, you make your own schedule. That means it’s much easier to earn a college degree even while working full-time. Many sole practitioners use weekends and evenings for taking online or in-person courses, and pay all the expenses with a student loan from a private lender. Tuition and fees can add up, even if you’re just needing to add an extra year of credits to sit for the CPA exam. Private lenders offer competitive rates and their online applications easy to fill out.
Business is Year-Round
Because many individuals file their returns in April every year, there’s a misconception that the entire field of accounting is highly seasonal. Nothing could be more inaccurate. For example, among entrepreneurs, most filing is a quarterly affair. Many other in-demand services are enjoying year-round demand, like bookkeeping, tax planning, preparation of financial reports, loan applications, and countless more. Even the personal taxation season is much longer than it used to be in the days when the majority of citizens waited until the last minute to transmit their returns. In the digital age, when online filing is simple and quick, and when most working adults receive W-2s electronically, the busy season for preparers now runs for nearly four full months.
You Can Specialize in Tax Resolution
For better or worse, there are thousands of individuals and businesses that are facing huge bills from the IRS. Sometimes, their best hope is to get an OIC (offer in compromise) or one of several other settlements that prevents payment of the entire amount owed. This niche of the taxation services sector is highly specialized but also quite lucrative for practitioners who want to hone in on a narrow field of operation. And because there's never a shortage who owe large sums in back taxes and penalties, accountants who do resolution work rarely have difficulty keeping their schedules full.
Adding EA and CPA Credentials Will Expand Your Clientele
If your business card carries an EA (enrolled agent) or CPA (certified public accountant) designation, clients will notice. Even though the EA designation is newer and not well-known to individuals, the letters are familiar in the world of small businesses. Having both credentials prove to prospective clients that you are adept in the wide field of accounting but have special expertise in preparing tax returns such as a Professional Tax Preparer (PTP) and/or Professional Bookkeeper (PB).
Most Entrepreneurs Avoid Taxes and Bookkeeping
Except for the occasional startup or small business owner who majored in accounting, few entrepreneurs want anything to do with filing tax returns, keeping books, or installing purpose-designed software for the job. Like legal, payroll, and security functions, most small business owners prefer to hire someone else to take care of their monthly books, maintain tax records, and handle core accounting functions. That’s one of the central reasons that accounting service providers of all kinds have done well as solo operators and small partnerships for more than a century. It’s just a fact of human nature that people who are good at sales, management, and entrepreneurship don’t want to be bothered with number crunching.
You Have Full Control
As an owner, you make all the key decisions about what kind of clients to seek out, how many hours to work, what combination of tax, bookkeeping, and other services you wish to provide. If you choose to take on a partner, that too is your decision, as is the choice of office location, what software programs to use, and what functions to outsource. Solo owners have 100 percent control of the operation, which is one of the most attractive aspects of working alone for the vast majority of people who choose to do so. As a solopreneur, you dictate who to work for and when, and what to charge.
Long-Term Industry Prospects Are Excellent
Unlike many other entrepreneurial business sectors, taxation-related services will be in high demand for many years to come. No matter which political party is in power, the constant tax law changes, amendments, and enhancements mean that the entire body of the legislative code is not static. Individuals and small business owners need professional guidance and are willing to pay for the best advice possible.
You Can Outsource Tax Season Overload
One challenge many new owners face is the deluge of work that appears from early January through mid-April. How best to handle tax season if you run a one-person shop and manage perfectly well the rest of the year? Often, the most effective approach is to hire as many temp workers as needed. Or, you can simply outsource your overload to a local firm that accepts batch jobs during the busiest months of the year. The main thing is to be prepared for several weeks of intense work and identify temps or outsource assistance before the filing wave hits.
Office Expenses Are Minimal
If this is your first foray into solopreneurship, it’s important to know that you can handle a sizeable number of clients from a bare-bones office setup. It’s fully up to you whether that means renting a small office or operating from home. In fact, for many one-person-shop bookkeepers and tax specialists, rent isn’t even close to being the primary expense. Expect to spend more, especially during the first year, on software, new computers and peripherals, and advertising. Of course, if working alone is not something you enjoy, or if you see an advantage in teaming up with a partner, consider other options besides going it alone. But, of all the business professions, accounting is perhaps the one that most readily lends itself to a solitary pursuit of profits.
Don’t wait, get started now on your journey.