Benefits of Starting Bookkeeping Business From Home

Every business whether big or small has to maintain their financial records. Therefore, almost everyone with sufficient bookkeeping experience,skills and interest can start their own bookkeeping business from home. Check out the following benefits and see whether the business is for you:

i) Low start up capital – the cost of opening your own bookkeeping business can be very low. You need only a personal computer, a printer and a user friendly bookkeeping software. These items may cost you from $1,000 – $3,000 depending on your budget.

ii) Work at your own hours – you can work at your own hours especially if you are a stay at home mom. If you start your business from home, you can choose as long as you want because you are building your own business. In addition, working from home means you don’t need to spend time traveling to and from your office and hence saving time and money.

iii) Make more than working for others – if you were to provide bookkeeping services to small business owners, you will be easily earning more than $25 per hour compared to perhaps $15 per hour if you were to working for other bookkeeping or accounting firm. So starting bookkeeping business from home gives you the opportunity to earn more than what you are getting from working 9 to 5.

iv) Demand of bookkeeping services – the demand for your bookkeeping services is huge as every business whether it is big or small has to maintain proper financial records either for tax filing purpose or for management purposes. Hence, if you were to start bookkeeping business from home, it will be easier to get clients compared to other types of business whether getting enough clients can be hardest part of the business.

If you are an experienced bookkeeper and thinking of starting bookkeeping business from home, you should give it a try as the it is considered on of the most profitable business on account of the low start up capital.

How to Start a Bookkeeping Business – Two Important Things That You Need to Consider Before Starting

There are lot of guides and e-books on teaching us on how to start a bookkeeping business in view of the high demand of bookkeeping services. However, before you decide to start one, you are advised to consider the following factors first.

Do you have the required practical bookkeeping experience?

It is almost sure that when you start approaching your potential bookkeeping clients, 9 out of 10 will ask your practical experience in handling bookkeeping in the past. This is because as a business owner they wouldn’t want their business records are kept by those who don’t have real life experience.

What I would suggest is, go find some part time bookkeeping jobs in a CPA office if you are a stay at home mom. By taking up this part time assignment, you will have opportunity to expose yourself to different business entities and in the meantime enhance your ability to maintaining full sets of books for a business. Practical bookkeeping experience is fundamental if you want to start a bookkeeping business.

Do you have the minimum capital outlays?

Although a lot of so called expert will tell you that you do not need a high start up capital to kick off your bookkeeping business. However, you are always advised to have a minimum of 6 months cash flows in order to sustain your living before you start generating enough income.

In addition, to start a bookkeeping business, you are required to invest in bookkeeping software, payroll software, laptop, printer, stationery and papers. These items might easily cost you few thousand dollars other than your business registration. Therefore, having a capital budget is important because it helps you to figure out what is the minimum capital requirement for your bookkeeping business.

Obviously there are other equally important factors that you have to take into consideration such as how to find your first client, am I proficient in using bookkeeping software and etc before you decide to start a bookkeeping business.

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.