Della Hudson is a UK-based accountant who started her own accounting practice in 2009. “This is the manual that I wanted when I first set up my accountancy business is 2009,” she writes.
There was no manual to create a successful accounting practice, so Hudson went ahead and wrote it herself.
This is essential reading for anyone in private practice.
She kicks off with an exploration of the reasons for starting your own business:
- To make and keep more cash for yourself
- To have a better work life balance
- To have flexibility for family or other commitments
- To be your own boss.
Every accountant will have slightly different motivations. Hudson’s motivation for starting her own business boiled down to this: she wanted interesting, professional work that fits around family life.
But there are some pitfalls to avoid: make sure, she suggests, that you have enough cash to survive 12 months; listen to advice, but embrace it only if it advances you towards your own personal goals; and never waste a good idea (even if you can’t use it now, keep it filed away for later use).
You’d be amazed how much work can be automated
She then looks at what services can be systemised, such as accounts production, tax returns, bookkeeping, payroll and management accounts. But don’t stop there. So many activities today can be automated using sometimes free or sometimes low-cost tools. Such functions include onboarding new clients, event planning and follow-up, marketing activities, nudging clients for information, template letters and emails.
It takes a bit of time and effort to get this going, but the savings are huge once your systems are up and running.
What’s superb about this book is that Hudson provides real-life examples from her own practice, so you can get a sense of what to avoid – and what to embrace.
As many South African practices are discovering, the switch to online delivery and virtual meetings opens up a universe of opportunity beyond our borders. Servicing clients abroad may mean collaborating with overseas accounting partners or simply understanding local accounting rules and compliance issues. The weak rand is an opportunity to start scouting the globe for new clients. You may also need legal advice, which (as members of the SA Institute of Business Accountants) you can get through Legal Sense.
Start getting on the network circuit
Hudson is a great advocate of networking – this is where you get new clients and build relationships that will help expand your practice. Don’t make this a one-way flow: in other words, help set up introductions for others and you will reap the rewards yourself. Giving is better than receiving.
Get onto network groups outside of the accounting profession, and closed networking groups that admit one member from each profession. Present your case professionally and eloquently and you will position yourself as an opinion leader in the profession. Business shows and exhibitions are also excellent places for making contacts.
When setting up your own practice you will need to pay attention to the pricing of your services. Avoid hourly rates since you get penalised for efficiency. Hudson has some interesting viewpoints on firing budget-conscious customers – these are also generally the most problematic. Also turn away business that is not right for you. You want to deliver a premium service and charge handsomely – but fairly – for that service.
How to cut costs
Hudson also has some useful ideas on how to cut costs by, for example, outsourcing the personal assistant function, or getting a more senior accountant to perform some of the trickier work (at a high hourly rate, it is still worth it).
When it comes to building your team, it is better to stay small than take on the wrong people. You can often get good hires straight out of school and let them get a taste for the life of a professional accountant.
The book goes into some detail on what software to choose, whether Xero to QuickBooks Online (and Hudson is agnostic on these), Receipt Bank, Expensify, Mailchimp (for newsletters – oh, and don’t forget newsletters – a vital way to keep in touch with clients and reach new customers).
There’s also a great chapter on marketing, something that many accountants neglect. You’d be staggered at the tools that exist to help you get your message out. There’s two types of marketing: push (such as advertising and sponsorship), and pull (such as networking events and speaking engagements). Hudon argues that pull events tend to bring in better quality customers and commands higher fees.
Fortunately, there are companies out there designed specifically to find new clients for accounts. See this story we recently did on Jason Feldman and his company Accounting Clients Accelerator (ACA).
There are also chapters on marketing via social media, the pros and cons, and how to exit your business once you’ve built it up into as decent size and decide it’s time to cash up.
What I really enjoyed about this book was Hudson’s plain-speak and her willingness to share experiences on her own journey. Every accountant will identify with some of the joys and horrors of going it alone in practice. Hudson is now a regular speaker at Accountex events and writes for Accountingweb.
Give this book a read and share in her incredible journey as an accountant and (initially reluctant) entrepreneur. You can order it here.