The great part about starting a bookkeeping business is that it requires little startup capital and can be almost immediately profitable once you have a few clients.
The potential market is broad and is generally made up of small business people who do not have the time or bookkeeping skills to perform the task for their business.
The typical bookkeeping business can be started from home with minimal costs. Required equipment includes a computer, basic software, and simple office supplies.
The most common functions performed by a bookkeeping service are:
- Monthly Financial Reports including a profit and loss statement, cash flow analysis, and general ledger balancing.
- QuickBooks® services including bank balancing, credit card management, and daily transactions. This bookkeeping software is the industry standard and you need to be very familiar with all functions and features before you begin your business. There are various bookkeeping courses available that teach this software.
- Banking management and the reconciliation of records can be tedious. It is also time consuming to investigate and dispute charges. Many small businesses are eager to have professional help in these tasks.
- Backup Documentation of computer and financial files is vital for small businesses but few perform these tasks regularly on their own. This service will provide your client with piece of mind and is a high profit item.
- Tax Records and preparation for auditing are often completed for small businesses by consultants. Free courses offered through the IRS may help expand your expertise in this area.
Starting A Bookkeeping BusinessFinding your initial clients will take some legwork and a lot of meeting time. When starting out from a home office your biggest advantage is price. Low overhead will allow you to beat or meet any price and you can increase your rates as you become established.
However, don’t go too cheap or prospective clients won’t trust the quality they are being offered. A good rule of thumb is to charge no more that 30% below the average of the competition.
There are some disadvantages to choosing a home office when starting a bookkeeping business.
- Clients are generally distrustful of home office situations. Since it is likely that all your clients will visit your home office it is important to have a quiet, professional space to meet.
- Once you start a home office, you will work at all hours of the day and never be able to completely get away from your job, no matter how many times you try and set “working hours”.
- You will have clients come by unannounced and have strangers in and out of your home. This can be a bit uncomfortable.
- Clients will call at night and expect you to answer – especially as you continue to work with them and they become more comfortable. Set office hour boundaries and try to stick to them when starting a bookkeeping business.
- Check the job listings for places looking for part-time bookkeepers.
- Check for small retail shops and businesses advertising grand openings.
- Monitor recent DBA filing announcements in the paper. Also check for new members to local business associations.
- Send promotional materials to businesses that move into retail space.