WHY THERE IS A NEED FOR INDEPENDENT BOOKKEEPING:
Most business owners know they need to keep accounting records in good order; however, their focus is mainly running a business itself and they simply don’t have time to maintain their books on a day-to-day basis. Also, they only have a little knowledge of bookkeeping or accounting;
WHO CAN BE AN INDEPENDENT BOOKKEEPER:
An independent bookkeepers need to be thorough, dependable and accurate as well as skilled in using accounting and sometime spreadsheet software. He must paying attention to details. Honesty and integrity are important qualities of an independent bookkeeper. If you'd be tempted to go along with a client who asks you not to report or to hide income, it's best to look for another business because you won't last long in this one. A client who'll ask you to use questionable practices may have no compunction about not paying your bill.
A Certified Bookkeeper who has a depth of knowledge of bookkeeping and demonstrates professional competence can access greater opportunities to enhance personal and career growth.
STARTING YOUR BUSINESS AS BOOKEKEEPER & ACCOUNTANT:
Once you decide to start your business as a bookkeeper and accountant, you need to remember you are no longer just a bookkeeper. Now, you are an entrepreneur, therefore, you have to start thinking like a business person. You have to become familiar with various business aspects such as finance, marketing and management. Also, you need to deal with not only the needs of different clients, but also with a whole lot of various individuals.
PLAN FOR A BUSINESS:
One of the most important thing while starting a business is planning. Without planning, you don’t know which way your business is going and you can not measure your progress. A lot of small businesses fail because of poor planning. You need to consider the management, operating and financial plan for starting up your business.
Market & Competitor analysis are key parts of any business program.
The objectives of the market analysis section of a business plan are to show that:
- you know your market
- the market is large enough to build a sustainable business
A competitive analysis is a critical part of your company marketing plan. With this evaluation, you can establish what makes your service what attributes you play up in order to attract your target market.
You need to consider the following while analyzing your competitors:
- Who are your competitors?
- What products or services do they sell?
- What is each competitor's market share?
- What are their past strategies?
- What are their current strategies?
- What are each competitor's strengths and weaknesses?
- What potential threats do your competitors pose?
- What potential opportunities do they make available for you?
MAKE A BUDGET
To determine how much money you need to start, you must estimate the costs of doing business for the first months. Some of these expenses will be one-time costs such as the fee for incorporating your business (Business registration fee), Rent deposit (if you rent an office)
Some will be operating costs, such as the cost of utilities, inventory, insurance, etc, Salaries (yours and staff if you have any), Rent (if you rent an office),Phone and fax, Office supplies, Computer and programs, Filing Cabinets, Advertisements, Other
You’ll also want to consider a basic budget and how much you will need to charge in order to meet your financial goals. How many hours a week do you want to work? You should also take into consideration the “overhead” expenses involved, such as insurance, taxes and vacation time. How much you can charge depends on your location and the level of work you do, ranging from minimal record keeping to the tasks leading up to preparation of financial statements. Some bookkeepers also prepare financial statements and do tax work as well.
MARKETING YOUR BOOK KEEPING BUSINESS:
The most difficult part for any business is marketing to get a steady flow of customers and this is no exception for bookkeeping businesses. Most important thing while starting a business is to maintain a client base and develop very strong relationship with your clients. You can do this by printing your company’s brochure and distributing them in law offices, IT offices, financing firms, advertising agencies. You can deal with any organisation that deals with start up businesses in order to have idea of businesses, business links in your area.
A proper follow up through phone calls and personal visits to the offices would help in solving queries.
SELECT THE NAME OF YOUR BUSINESS:
Naming your business is an important branding exercise, but if you choose to name your business as anything other than your own personal name then you’ll need to register it with the appropriate authorities.
This process is known as registering your “Doing Business As” (DBA) name.
A DBA is needed in the following scenarios:
- Sole Proprietors or Partnerships – If you wish to start a business under anything other than your real name, you’ll need to register a DBA so that you can do business as another name.
- Existing Corporations or LLCs – If your business is already set up and you want to do business under a name other than your existing corporation or LLC name, you will need to register a DBA.
Note: Not all states require the registering of fictitious business names or DBAs.
HOW TO FINANCE YOUR BUSINESS:
Now you have all prepared for the basic needs, now its time to decide on the means to finance your business. You will be needing some form of capital either it comes from your personal savings or debt financing. For staffing business, a small term loan would serve the purpose. This is the type of loan that is generally used to finance day-to-day expenses such as inventory, payroll, and unexpected or emergency items. Short-term loans are usually for a one-year term or less, and can include revolving lines of credit or credit cards.
CHOOSING A LOCATION FOR YOUR BUSINESS:
One of the important step is to choose a location for your business if you don’t want to run it from home. You need to do an area check whether it is business friendly. Further you also need to understand the laws and regulation that are going to be imposed on your business in that area. You need to do your research, talk to business proprietors, and consult the small business community.
You will need insurance for your bookkeeping business as you are providing an essential service for small business owners and errors do happen so it's best to insure against problems which could occur. Professional Indemnity insurance protects you against claims made by dissatisfied clients and employees of your business. Whereas Public Liability Insurance covers you for claims against you from third parties for personal injury, or property damage eg: an accident at work caused by someone tripping over a computer cable.
Some business types require registration with your state government:
- Set Up An LLC
- Register General Partnerships or Register Limited Partnerships
- File A Fictitious Name
Obtain Your Federal Business Tax ID:
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online. You must check with your state to determine if you need a state number or charter.
Business Licenses & Permits
To run your business legally, there are certain federal and state licenses and permits you will need to obtain. These resources will help you understand the requirements for your small business.
This article is written for the informational purposes only and you cannot consider the contents in this article a legal advice. The author has shared her opinion , not InfoTaxSquare.com