Start & Run a Bookkeeping Business

by Angie Mohr

Overview

Learn the skills to make your bookkeeping business thrive! Run your own profitable business from home Start your business with just a small investment Learn how to successfully market your services Many bookkeeping services fail because the entrepreneurs who start them focus on bookkeeping and don’t take the time to learn how to plan their businesses and make them profitable. Written in the step-by-step style that has made the Start&Run series the best of its kind, this indispensable guide addresses issues specific to a bookkeeping service, such as how to assess which clients are profitable and when to involve a professional accountant. By following the principles Angie Mohr outlines and using the worksheets that accompany this book, you will be well on your way to owning a successful bookkeeping business. You will learn how to: assess whether running your own business is right for you decide whether to work from home market your services cost-effectively manage your workload and cashflow Whether you are just starting your own business or wanting to expand an existing business, this book will show you how. It includes chapters on hiring and managing employees, staying competitive, and planning for business growth.

Product Details

ISBN-13:	9781770408043
Publisher:	Self-Counsel Press, Inc.
Publication date:	02/24/2012
Series:	Start & Run Business Series
Sold by:	Barnes & Noble
Format:	eBook
Pages:	192
File size:	997 KB

About the Author

Angie Mohr CPA, CA, CMA is a chartered accountant and certified management accountant who has previously written four books in the Self-Counsel Press Numbers 101 for Small Business series. She is the managing director of Mohr&Company Chartered Accountants and Business Consultants. Mohr can be heard regularly on radio with small-business survival tips, and she is also a newspaper business columnist. Angie is the author of these books from Self-Counsel Press: * Bookkeepers’ Boot Camp * Financial Management 101 * Finance&Grow Your New Business * Start&Run a Bookkeeping Business

Table of Contents

INTRODUCTION xv 1 GETTING STARTED 1 Assess Your Skills and Goals 1 Why Bookkeeping? 4 Approaches to Starting Your Business 5 Building a business from scratch 5 Buying an existing business 6 Setting Up Your Own Books 7 Choosing Your Accounting Software 8 Level of support provided by the local firm 9 Developer’s track record of performance 9 Software’s ability to fit the business 9 You’ll Need a Business Plan 10 Consider Your Exit Strategy 12 CONTENTS v Selecting External Advisers 15 Questions to Ask Advisers 18 Finding a Board of Directors 18 Know Your Competitors 19 2 FINANCING YOUR BUSINESS 21 How Much Money Do You Need? 21 Start-Up Costs 22 Cash to Provide Liquidity 23 Get Your Personal Finances in Order 27 Credit History 27 Debt Management 28 Retirement Goals 29 Insurance 29 Sources of Financing 31 Internal Resources 31 External Resources 31 Your Relationship with Your Banker 33 3 PRICING YOUR SERVICES 35 Provide a Menu of Services 35 Clients’ Fear of the Clock 38 Pricing Strategies 38 Cost-based pricing 39 Pricing based on your competition 39 Pricing based on the market 40 Pricing based on value 40 “Productize” Your Services 41 4 CLIENT MANAGEMENT 49 Tracking the Work 49 Work In and Work Out 50 Handling Client Records 51 Tracking Turnover Time 52 Managing Peaks and Valleys 54 vi Start&run a bookkeeping business Contents vii Planning for Time Off 54 A Word about Client Confidentiality 55 Tracking Your Clients 56 Add Up Your Clients 57 Compute Frequency of Visits 57 Calculate Average Billing per Client 58 Assess Client Quality 59 5 BUSINESS TOOLS AND EQUIPMENT 63 Communication Options 63 Telephone system 63 Fax machine 64 Cellular telephone 65 Personal digital assistant (PDA) 66 Computer System 66 Computer 66 Software 67 Printer 68 Scanner 68 Photocopier 68 Filing System 68 Office Furniture 69 Vehicle 70 Resource Library 71 6 WORKING FROM HOME 73 Financial Considerations 73 Nonfinancial Considerations 74 The neighbors 75 The on-call syndrome 75 The convenience 76 Willpower 77 Tracking Your Home-Office Expenses 77 Step 1: Calculate business use 78 Step 2: Apportion your expenses 79 Repair and Maintenance Expenses 80 7 ORGANIZING YOUR OPERATIONS 83 Setting Hours of Operation 83 Booking Appointments 84 Quoting Jobs 86 Managing Work-in-Progress 88 Invoicing Clients 89 Establishing Credit Policies 90 Terms of sale 91 Credit decisions 91 Payment methods 92 Handling Collections 93 8 MARKETING AND PROMOTION 95 Finding Your Niche 95 Pricing Is Key 97 Competing on price 97 Competing on value 98 Presenting Your Best Self 98 How you dress 99 How you answer the telephone 99 How you decorate your office 100 Advertising with a Purpose 101 Should You Have a Website? 103 Keeping Your Current Clients Happy 104 9 HAVING EMPLOYEES 107 Hiring 101 108 Building a job description 108 The laws of the land 109 Attracting quality employees 111 Interviewing potential candidates 112 Employee Compensation 114 viii Start&run a bookkeeping business Contents ix Determining market rates 114 The importance of benefits 115 Performance-based compensation 116 Firing Employees 118 10 FINANCIAL MANAGEMENT 125 Budgeting 101 125 Projecting revenue 125 Projecting expenses 126 Fixed and Variable Costs 128 Fixed expenses 128 Variable expenses 128 Why Is Cost Behavior Important to My Business? 128 Break-even point 129 Capacity 130 Basic Ratio Analysis 131 Solvency or liquidity ratios 131 Asset and debt management ratios 133 Profitability ratios 135 Key Performance Indicators 136 Receivables Management 139 Payables Management 140 Tracking due dates 142 What to do if you fall behind 142 11 GROWING YOUR BUSINESS 145 The Three Methods of Business Growth 146 The Concept of Leverage 147 Tracking Your Business Growth 148 How to attract new clients 148 Ways to sell more to clients 149 Sell to clients more often 149 12 PLANNING FOR SUCCESS 151 The Planning Cycle 151 Step 1: Make a plan 152 Step 2: Get control 153 Step 3: Focus on growth 155 Step 4: Fine-tune your business 155 Step 5: Plan some more 157 GLOSSARY 161 SAMPLES 1 Business Plan Outline 13 2 Cash-Flow Report 25 3 Cash Inflows 26 4 List of Services 44 5 Client Termination Letter 61 6 Fixed Price Agreement 87 7 Client Satisfaction Survey 106 8 Process Documentation 110 9 Employment Advertisement 113 10 Employee Evaluation Form 120 11 Weekly Flash Report 154 12 Monthly Planning Meeting Notes 156 13 Performance Highlights 157 14 Management Discussion and Analysis 158 WORKSHEETS 1 Skills Assessment 3 2 Evaluating Accounting Software 11 3 Planning Your Exit Strategy 16 4 Vehicle Expenses 72 5 Home-Office Expenses 81 6 Budgeted Income Statement 127 x Start&run a bookkeeping business