Transcription
Ever considered starting an accounting firm? Thinking about leaving the profession altogether? Check this out. Here's 15 things I wish I knew when I was in your shoes about how to start an accounting firm.
Number one, if you're thinking about it, you just got to start. The beauty of most accounting work is you can just pick up a couple jobs on the side, not to make a pile of money, but to learn about whether you actually want to do this, whether you want to do tax accounting, consulting. Worst case, you learn you don't like it, you can put all this wondering behind you.
Because number two, you're overthinking it. I just haven't quite decided yet. I, I talked to some friends who did it and yeah, I don't know. I'm still thinking about it. You should go get that credential first. What about insurance? You should knuckle down. Yeah, let's go find those forever clients. No, just stop. Because your first clients, they're not going to be your forever clients. The reality is, a good firm is always evolving. You're getting more specific in the people that you work with. You're probably moving up market to folks with more money who will pay you more to do the same thing. And this is good news because it means you don't have to overthink who those very first clients are. You just have to start.
But you don't, you get derailed because it is more fun to play house. Yeah, I just haven't found the right web designer yet. You don't have the money for that. Let's save up. In a few months, we can get a proper logo design. That'll really make a difference. It really doesn't.
And I'll tell you what else probably won't make a difference. Number five, your credential. If you want to do tax work, sure, audit reviews, you'll need a CPA. But most small firms, they don't do that type of work. And you can build a plenty profitable business without any credentials. If you want to do accounting or advising, just start. In the US, a few states do have restrictions on whether you can call yourself an accounting firm if you don't have a credential. Which doesn't mean put all this on hold to go get the credential. It just means you can't call yourself an accounting firm yet.
Now, if you want to do tax work, the requirements in each state are going to be a little different. But many states, like Oregon where I am, have a tax license that's actually pretty quick to get, way easier and cheaper than a CPA. Now, I got my CPA and I do think it opened a few doors. But right now, now we just need to get started. If you're thinking about it, you need to sort out whether this is something you actually want to do rather than waste years thinking about it or get this big costly credential only to learn that you don't enjoy it.
Oh, because the real struggle, it is, it is up here. It's confidence. I don't have confidence problems. Good one. Real convincing. Tell that to the notes you're still getting from your senior. They'll all find out who you really are. It's just a matter of time. Welcome to adulting, where we put on our pleather pants, puff up our chest, and pretend we aren't scared little baby children on the inside.
But the way that I overcame this was just learning how to play the game. Learning everything I could about running accounting firms, making friends with a bunch of other firm owners. You're going to learn a lot, but you're also going to be very sure of yourself when it comes to making hard decisions about your business, when it comes to setting boundaries with clients. That confidence comes from a place of knowing what you're doing. So start learning, start making friends. There will be hundreds of firm owners watching this video. Engage in the comments, see if you can meet somebody. I've got over 150 episodes on my podcast just talking shop about running firms. So invest in getting to grips with best practices, and that confidence will come.
But that is not to say that it won't still be scary. It'll probably be fine unless it isn't. In which case, hello darkness, financial ruin, being smack in the middle of your career without a plan or direction. Okay, this is totally normal. It's actually why I tell everyone to start with a side hustle. Don't quit your job without any revenue. Don't go like full YOLO send on this firm. The reality is, building a firm, building that client base, probably going to take some time.
But what is the worst-case scenario here, really? You learn you don't like it, you struggle to build a business out of it, and where does that leave you? Uh, where you are today, with more experience of what it's like to be an entrepreneur. Is that so bad? You really think you won't be able to find a job in accounting? Firms will still take you back. Private will still be there. It's really not the end of the world. So let's get tactical. Enough woo-woo stuff.
Number nine, you got to get your tech right. At the center of your small accounting firm is your practice management system. If you're coming from a big firm, this is going to look very different, but in a good way. Like, oh, this looks like something that was made in the last 10 years sort of way. Your PM is where you manage the work, recurring tasks, oftentimes how you coordinate getting info in from clients. It is the brain of your firm. Do not build this in a spreadsheet, you weirdo. Just don't.
Finding the right tool will actually give you confidence because it help helps you to begin building systems. Now, we put out a huge report last year on the top 14 practice management systems to consider. I'll put that in the video description. Will save you a ton of time doing your own research.
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Now, the blocker for most people here when you're getting started is still paying the bills. And it's why I recommend you consider doing some contract work for other firms, like the one you want to build. Financially, it'll float you for a bit. And it's really helpful to actually see into the systems of those other firms. You're going to pick up some ideas and can implement it in your own practice. And a really fun aspect of running small firms is folks are generally super collaborative. How many big firm partners are out there running YouTube channels telling people how to run accounting firms? Yeah, no. In the world of small firms, making friends is truly the best thing that you can do.
But you may not have experienced this yet because people like to gatekeep, especially your employer. Well, they're right. When you're doing your own thing, I mean, you got to, you got to go out and buy insurance. Insurance. Um, nobody's going to set your alarm clock for you, you know? It's, it's just you. Okay, Dad. There is some truth to it. Being a different type of challenge. But if your employer is the one who is scaring you away from doing your own thing, it is because it is in their best interest for you to stay. Great employers will be transparent about the pros and cons of doing your own thing. They might even let you leave in a way that lets you take some stuff with you. But the bad ones, they'll just try to scare you into staying.
But here's the thing. When you are working for yourself, the good news, you don't have to go big to be successful. You don't have to build a 100% firm. And this is really important. You don't have to prove anything to the people who you are leaving. Please do not set up a firm and sacrifice everything to prove something to the people you used to work with because I'll let you in on a secret. They don't give a about you. Do what's best for you. And often times, that's something small. I had a couple of kids and realized, oh, this is what matters. Not that overbearing client, not building a big impressive thing. Finding work that I could enjoy, that would pay the bills and give me greater flexibility. It really doesn't need to be any more complicated than that.
Now, a few more tactical things to find better paying clients and some tricks that traditional accounting firms are actually not capitalizing on at all. Number 13, do not be afraid to follow what you enjoy. This may sound woo-woo, but you are going to be at your best when work doesn't feel like work. And a great thing about accounting, it's everywhere. On my podcast recently, we ran through a bunch of different ideas for specialization, from microbreweries to marine conservation nonprofits to esports orgs to pet hotels to comic book publishers. These people all need an accounting firm. And the best firms, the most profitable firms, are specific. They solve specific pains for specific people. Please don't make another landing page that says, "We provide peace of mind." Make a landing page that says, "We're the best accounting firm for multilocation in pet hotels between 1 and 5 million in revenue." And it is okay if it is something you love.
There's this weird framing that work is suffering and your hobby is the escape. Never make your hobby your job. Imagine that, going through life not pursuing the things that you enjoy. I'm pretty sure if you follow the things that you enjoy, you will find other things that you enjoy along the way and actually have a good time while doing it. That whole way of thinking that is like legacy employers suppressing employees, except the fact that work is suffering. When you're doing that thing you love, that thing you geek on, right now, somebody's doing those people's accounting at taxes. Why shouldn't it be you?
Now, how do you get on their radar? This is something 99% of accounting firms have not discovered yet. Here's the thing. These days, people spend their free time scrolling algorithms all day long. It's how they learn. It's how we entertain ourselves. It's not the youngs, it's not the olds, it is just about everybody now. Podcasts, newsletters, influencers. This is the future of media. It's what we consume now, right? This is how you're going to get in front of a very specific type of entrepreneur. Do you want to work with, uh, fitness coaches selling online coaching? Work with the software platforms they're using. Develop some partner content with them. We're looking for ways to get in front of these people. Find the podcasts talking about the business of athletic training. Be a guest or sponsor the pod. We are all consuming this stuff. There are niche creators for everything now, goodness sakes. We're here talking about how to run small accounting firms. You want to talk about questioning life decisions? Get your firm out into new media. And when that esports org hears, "Oh, an accounting firm for esports orgs," I'm going to be like, "Where do I sign up?" Imagine running an esports org and walking into an accounting firm and being like, "Yeah, so, so here's what I do." Those people hear about an accounting firm that is just for them, they will be pumped and they'll pay top dollar to work with you.
Now, one more point that I want to super stress. Don't go it alone. There are so many cool, collaborative people in the small firm space. There are so many people just like you watching this video thinking about it. You don't have to do this by yourself. It is a, a really unique like kinship having friends that do this stuff. I can get home at the end of the day and my wife's like, "You're doing great, you're so good at this stuff." And I'm like, "Thanks, but do you really know if I'm any good at this stuff?" And when you sit down with somebody else who runs firms, who understands the ups and downs of all this, maybe somebody who's considering doing the same thing as you, man, that is so energizing. Because this stuff can be isolating, especially if you don't know anybody else that does it. Building these relationships can shave years off of your learning process, shortcutting mistakes, being able to be like, "Hey, I'm thinking about moving to this other software platform," and being able to talk with five people who have already made the switch, so you're not making decisions based on what a salesperson's telling you. Man, that stuff can genuinely like accelerate your firm's development by years. Those relationships are gold.
It's ultimately what led me to sell my firm and just focus on creating spaces like this where firm owners can come together and build those relationships, make this stuff feel more accessible. I get it. The notion of starting a firm, it is scary. You probably don't know anybody else right now who's done it before. Or the people around you at the big firm are like, "Why is that a, that a thing you would ever even do?" Listen, gang, it's a pretty good gig, especially once you found some cool people to share the journey with.
Now, couple resources. I shared my podcast. We're closing in on like 200 episodes just talking shop about small firm stuff. But you'll also love this video. Logan Graf does this every single year where he runs through how much money he made starting his firm from scratch. Here's year one. He's since released years two and three. And it might honestly shock you, but in like the very best way.