How to Start a Bookkeeping Business – Do You Need a Business Plan?

When you think about setting up a bookkeeping business, one of the most important aspects is the creation of your business plan. It is amazing however that many people often miss this vital step.

Generally, the cost of starting a bookkeeping business is quite low, in comparison with other small business options, so often people feel that it is not required and go into their business with a hit or miss approach. This is not the best way t start any long term profitable business, as early planning can reveal many aspects about the business that you might not have considered.

For example, a business plan for your bookkeeping business will help you see where you are going and give you the road map of how to get there. As part of this process you will be forced to think about components of your business such as your rates, costs, options for premises, staffing, cash flow, budget, marketing needs and marketing strategies.

By thoroughly thinking through the different aspects of your business prior to starting, it will give you a better chance of success. A prime example of this is when you are setting your rate. Many people pick a low hourly rate to start with and find they have severely under estimated the true hourly rate they need for their business to survive.

There are major differences between being an employee and suddenly being responsible for your own business. In this change over, it is easy to forget that in setting your rate you need to factor in many costs that were previously paid by an employer or costs that were not necessary. Sometimes people select a low starting rate due to lack of knowledge, experience or even confidence. This however can not be used to cloud your business judgment as your rates are at the heart of your bookkeeping business.

It is vital to plan your starting rate and see if it is compatible with a long term future for your business. By creating a budget and cash flow forecast for your bookkeeping business, you will clearly see if your rate will create a profit quickly or if you will be struggling for months to keep ahead of additional costs in running your business.

If you research the components of your business plan thoroughly, it will be easier to see if you have a long term sustainable business model for your bookkeeping business. The more planning and information you can accumulate prior to commencing your business the more successful you will be in the long run.