Bookkeeping Business Plan & Bookkeeping Business Blueprint
Looking for information regarding how to make a bookkeeping business plan or Bookkeeping Business Blueprint in 2023-2024 to start your own bookkeeping business? You are at the right place. Keep on reading ahead to know more.
What is a Bookkeeping Business
Don’t know what exactly is a bookkeeping business, well let me tell you a bookkeeping business consists of tracking income and expenses, processing payroll, maintaining business accounts books, ledger, cashbooks etc. and preparing tax returns for business clients.
It is an excellent home-based business which is easy to start with very little investment but require necessary bookkeeping and accounts skills, if you are are good in numbers and financial terms, procedures you can easily start this home based bookkeeping business.
If you don’t have these skills and knowledge, no worry you can start theses after successfully completing short-term financial account and bookkeeping course with the help of little practice nowadays various online courses entrepreneurship courses are available on this subject which can train an individual to purse a career as a bookkeeping professional.
No matter if you are looking for extra money, or simply want to grow a business to support you and your family, you can consider working as a bookkeeper in the future.
In this following article on bookkeeping business plan, we are going lay down some eminent steps for you by following which you can work as a bookkeeper with ease, so without any further ado, let’s get started.
Start by Creating a Bookkeeping Business Plan
Before starting any business a solid planning or home work is necessary which brought all nitty-gritty, assumptions, projection of a business on paper , thus writing a business plan is crucial for any kind of business, this will serve as bookkeeping business blueprint and help to start and establish your business in right direction, so you should also start your business journey only after by writing a bookkeeping business plan first.
While a business plan can be used to obtain funding for your business, the real value is the thought that goes into the process of writing a proper business plan.
While writing a business plan, you should think about every aspect of your business, such as what products and services you will sell, how will you market those products and services, and who is going to be your competition. You should also create a well thought financial plan that should include a 12 month profit, loss projection, projected balance sheet and the projected cash flow.
Some key items that should be included in your bookkeeping business plan are given below:
- Cover page
- Executive summary
- Company overview
- Competitive analysis
- Marketing plan
- Startup costs
- Financial projections
Identify your target market
You should decide in the very beginning, who are going to be your target clients. In this section of bookkeeping business plan, we are going to tell you how can you identify them.
You should never limit yourself to your surrounding area, or if you are going to offer online services to your clients. It might feel tempting for you to offer your services online to a worldwide audience, but it can also add a lot of complexity to your operations.
You can plan on paying for help with online advertising, web design, search engine optimization, or website content management.
Your next step should be to decide whether to focus on a particular small business niche or offer services to all small businesses. It is much easier to become an expert in accounting for a particular business niche than it is for all businesses in general.
Do note that, the best niche to consider are those that have unique bookkeeping challenges.
For example, construction companies compute their profit by project, truck drivers have special tax rules for computing travel expenses, and restaurants have a very high volume of relatively low-value inventory items to track.
Decide what services are you going to offer
As a bookkeeper, you should decide what services you are going to offer to your clients.
You can also add more services later on, but knowing your initial offerings are important so that you can choose the right certifications and software.
Here is a list of some of the common services which are offered by bookkeeping businesses, they are named as:
Basic bookkeeping includes entering banking transactions, classifying payments, and reconciling the bank statements as well. The result of basic bookkeeping is typically a set of financial statements at the end of each month.
Some bookkeeping businesses prepare and mail invoices to their client’s customers, this comes under Invoicing. Even if you do not prepare and mail the invoices, you could collect, deposit, and track the customer payments.
Avoid losing track of the bills. You can provide value to your clients by tracking their unpaid bills and submit payments to their vendors or simply provide a list of bills that need to be paid.
Make sure to only provide tax return preparation to your clients if you have tax expertise. It is not at all difficult to learn how to fill out tax forms, but there is much more to know to adequately advise your clients. If you ever decide to prepare tax returns, be sure to get a professional liability insurance.
Earn the relevant certificates for bookkeeping businesses
The best way to gain credibility with potential clients is to prove that you have the relevant knowledge to run your bookkeeping business.
If you are a certified public accountant (CPA), you probably won’t benefit from becoming a certified bookkeeper, but you might still consider becoming certified in whatever accounting software you choose to use.
What is an accounting software certification?
One of the best small business accounting software providers offer a certification program so that bookkeepers can be demonstrate they are proficient with the software.
Register and organize your business
This step is no doubt important as it establishes your business as legitimate and help to limit your personal liability if your company is ever sued.
Whether you are doing part-time, or not, you do not want to skip this step.
Start by selecting a business name
In this section of bookkeeping business plan, we are going to tell you how can you select a business name?
Still not sure, how should you name your business, you can read our article on How to Name a Business.
Naming your business can be a fun and stressful activity both, but it must convey your brand since that is what a potential customer will see before they sit down with you for that initial consultation. While naming your business, make sure that the business name says exactly what you do.
The first thing you should keep in mind before naming a business is that you should always aim for clarity. Your business name needs to tell people what you do. If you are focusing on a particular niche, do not forget to include it as well.
You can use a term with an established brand. For example, you can use the name of the city where you are located, such as Oakland Bookkeeping.
Do not forget to get relevant input from your family and friends. Make it fun for them and put it out on your social media that you are looking for suggestions on what to name your business in the first place. You could also offer a prize to the winner.
Now try it out on potential customers to see what they think of it. You can also compare your name to competitors’ name to see if it stands out enough or not.
How to choose a business structure
There are in total four common business structures you can choose from, such as sole proprietorship, partnership, limited liability company (LLC), and corporation.
The structure you are going to choose will determine your personal liability if the company is ever sued, your tax liability, and your ability to raise capital.
Our team recommends you to get an introduction to the four common business structures by reading about them on the internet.
A number of people operating a part-time bookkeeping business with no employees will operate as a sole proprietorship, which generally works fine.
However, if your business ends up growing to the point of hiring employees, you will need to consider becoming an LLC or corporation.
Do note that, in addition to tax consequences, your personal liability in the event of a lawsuit can vary dramatically by business structure, so make sure to consult with an attorney.
Set up proper business operations
Now that you are done with organizing your business, you can get started with the operations, like getting the right business insurance and opening a separate business checking account.
Do note that, it is important to separate your business operations from your personal finances to make your accounting easier and potentially affect your liability in the event of a lawsuit.
Set up a telephone number
Acquiring a unique phone number for your business is incredibly easy and often free. You can also get a free Google Voice number that includes a local area code, voicemail, texts, and unlimited calling.
Make sure that you also explore other options available on the internet to get the best business phone systems.
Hire an answering service
In this section of bookkeeping business plan, you are going to learn how you can hire an answering service.
If you are going to handle all the operations by yourself, you may find it quite hard to get back to clients right away, especially during tax season.
You can send voicemail to your customers when they need your services. Go Answer is a bilingual answering service that connects your customers to live customer service agents via phone, text, web chat, or email 24/7.
If you are not sure about this platform, you can take their 30 days free trial to satisfy all your queries regarding this business.
Set up a bank account for your business
Please note that, it is very important to separate your business finances from your personal finances at all costs.
While most of the people think they should wait until the business starts to generate cash flow, it is important to track expenses immediately, so that they can be deducted as startup costs.
Establish a mailing service for your business
In this section of bookkeeping business plan you are going to learn about how can you establish a mailing service for your business.
If you are planning to lease office space, then your mailing address will be wherever your office is located, but if you plan to set up a home office, you will need to obtain a business mailing address so that you don’t have to use your home address.
This will make your business look more professional and maintain your privacy accordingly.
There are some steps that you might have to follow in the beginning. First, you should begin by renting a post office box from your local post office.
On an average, you will have to pay them $60 for six months or $120 for the year. This price can vary based on your location.
Another step is to rent a UPS mailbox instead, and the UPS Store will give you a real street address to use. A benefit of using a UPS Store will give you a real street address to use.
Another benefit of using a UPS mailbox is that some merchants won’t deliver to P.O. boxes and might require a street address.
As a bookkeeper, you should have liability protection in case you get sued for a mistake on your client’s books.
Insurance can both cover the cost of getting a lawsuit and the lawyer fees to defend against a lawsuit.
Get the right software
Determining the right software to manage to your business can be an overwhelming task for you.
To get you started, the following is a list of the areas of your business for which you will need to decide which software tool to use.
What is a client software?
You will need to decide what accounting program you would like your clients to use. This does not necessarily have to be the same platform that you need to manage your bookkeeping business.
There are some things that you have to consider while selecting a software to recommend to your clients, such as:
- Can you access the client’s books remotely?
- How much will it cost each client for basic bookkeeping?
- How much will it cost to add client payroll?
- Is it easy for your client to learn to use?
- Does the software offer a certification program or partnership program for bookkeeping firms to help attract clients?
Practice management software
A tool that you can use to make your life easier is accounting practice management software. This can help you in organizing and tracking the progress of the client work and, in some cases, also provides a portal access to your client’s books.
Xero and QuickBooks both offer practice management software that are integrated with their accountant software.
What is electronic file sharing software
Do note that a documents sharing program will allow you to share information, such as bank statements, copies of receipts, invoices, and accounting files, with your clients no matter where you are working.
Dropbox is a popular document for sharing program. You can also create a Dropbox for each client, and they can start submitting their information.
This system is much more secure than sending files via email or using a USB. To access such information, you need a user ID and password. All the files can be stored in the cloud, so no backup is required.
How to fund your bookkeeping businesses ?
In this section of bookkeeping business plan, you are going to learn how can you fund a business.
Now that you are done with making a proper bookkeeping business plan, you must have a good idea of what your estimated startup costs will be.
In general, the startup costs for a bookkeeping business can be low if you work out of a home office as opposed to leasing office space.
The experts say that you should always have at least six months’ worth of expenses in the bank. Also, even though your business is brand new and has not generated any revenue yet, you may still qualify for startup business financing.
Apply for a business credit card
If you want to go far in this business, you might want to open a business credit card account soon.
A business credit card is likely to be the first form of financing you will be qualify for, and it can be a great financial tool to help you with cash flow or necessary expenses early on your business.
A business credit card can also be a good way to track your business expenses easily. This will go a long way toward making tax time a breeze.
New bookkeeping businesses will use a credit card to float working capital expenses, earn rewards, and manage employees.
How to set up a home service for your bookkeeping businesses
Do mention in your bookkeeping business plan what are the services that you are going to offer to your clients.
In the beginning, you should always keep your costs low by setting up a home office. If possible, you can plan to meet your clients at their offices or virtually.
Our team does not recommend that you invite clients to your home office unless you know them very well and have a private room where you can work.
Do not forget to take those home office tax deductions. You can deduct repairs and maintenance to the area used for business and a portion of utilities, real estate taxes, and insurance on your home.
If you cannot make a home office work, you can look into virtual office space or office sharing. Typically, this includes a mailing address, local telephone number, receptionist to answer calls, physical office space, and access to a conference room that you can rent by the hour.
What should be your marketing strategy
In this section of bookkeeping business plan, you are going to learn more about what should be your marketing strategy.
Do note that, marketing is one of the most difficult things for accountants and bookkeepers to master. Whether this is your side gig or a full-time business, you can get a website customized for your business with a company that offers specialized marketing services, like CPA Site Solutions.
It will have one its webmasters reach out to you for a quick 15-minute conservation before it goes on to create your website fitted with your logo, images, and content.
It will definitely focus on designing a website that increases revenue, improves client loyalty, and drives brand awareness. It even offers a free 60-day trial so that you can see if it works for your business.
In addition to a website, there are a number of ways to market your bookkeeping business, such as becoming a business advisor with the Small Business Development Center (SBDC).
You can also work as an adjunct instructor, get certified in accounting software, sign up with bookkeeper freelancer websites, join a local meetup group of bookkeepers and accountants, establish a client referral program, professional social media accounts or you can target a niche industry and join their industry association.
Now that you have a clear roadmap to get your bookkeeping business, you can pick a date for when you would like to take the first client. If you will follow the steps mentioned above, you will be able to create a proper bookkeeping business plan.
So, this was our article on bookkeeping business plan. Make sure to comment down below and share it with your friends.
Not sure, from where to start? You should check out our article on Startup Ideas for Students.