Most professionals dream at least occasionally of starting their own firm or practice. Starting a solo accounting firm, for example, is a dream for many current and future accountants. However, starting a business in any sector can be risky. When starting a solo accounting firm, there are three things that every accountant should consider: incorporation, business plans and office spaces.
Whether or not an accountant should run as an individual or as an incorporated practice is the first and probably most important question. Remember that running an accounting firm of just one person is incredibly simple — the accountant only has to manage himself, his work style and his schedule. What are the risks to flying solo and unincorporated? Aside from the added costs and maintenance a corporation requires, the legal protection of Limited Liability is a huge benefit. As an individual, the accountant is personally liable for general debt, vendor contracts and real property or equipment. As an incorporated accounting firm, however, the accountant is not personally liable. Remember, however, that the accountant is always personally liable for any professional negligence.
The second question an accountant should ask himself is whether or not he has a business plan that is viable; if he doesn't have one, perhaps hiring an adviser to help create one is in the accountant’s best interests. A business plan can include a vision, mission statement, estimated costs, target markets and audiences and marketing strategy. Without these, an accountant may have an extremely hard time fuelling and operating a business that’s very free floating. If the accountant doesn't feel comfortable drafting a business plan, seeking the help of a professional adviser may be well worth the cost in order to create a viable, realistic outline. The accountant should use his attention to detail to his advantage when drafting a business plan.
The third thing that an accountant looking to start a solo accounting firm should consider is office space and staff. Though the firm may be running solo, some accountants find that hiring an assistant or administrative secretary can save him a lot of time and headache when it comes to answering calls and emails. Likewise, the accountant needs to decide from where he plans to work. Remember that renting office spaces adds to the overall estimated cost, so to begin the accounting practice, the accountant may find his best option is to work from a home office.
Starting a solo accounting firm can be a daunting task, especially if the accountant is still fairly new to the workforce. However, by creating a business plan that allows the accountant to set clear goals and factoring in questions like office space and possible incorporation, accountants can make starting their own accounting practice a reality in no time.
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