Want to be your own CEO?
Starting your own accounting business or accounting firm can be an extremely profitable endeavour. Not just in terms of money but in your lifestyle as well.
You won’t have to answer to any boss. You get to decide your own raises. Simply put, as the owner of an accounting firm, your income is only limited by the number of clients you can get.
And with businesses all around the world making bookkeeping mistakes – there is plenty of opportunity for you to acquire new clients.
But as you know, this is no easy venture. You’ll need extreme determination, persistence, and hard work. Ups and downs are inevitable and you’ll go through some of the toughest moments in your life.
While facts like “8 out of 10 start-up businesses do not succeed” might scare you, having the right team and access to the right information will significantly improve your chances of success.
But in order to employ the right staff, hire the right advisors, and invest in your business skills – you need funding.
Here is a list of some of the ways you can go about funding your new accounting business:
Bootstrapping is one of the most effective ways of financing when you’re setting up your business. This is especially the case for service-based businesses, like accounting firms.
It’s difficult for first-time entrepreneurs to get funding without showing proven traction, along with a well thought out business plan.
Instead, you can dip into your own savings to start with. If you’re comfortable with it, you can also ask your friends and family to contribute. This form of funding is easier as there are fewer compliances, formalities, and fees. In most cases, you won’t have trouble figuring out an agreeable interest rate with your family and friends.
Because of these advantages, self-funding and bootstrapping your business should be your first funding option. When you put your own money into the business, it ties you to the business. Investors will see this as a positive sign when they come in at a later stage. However, this form of funding is only a good choice when smaller amounts of money is required.
Bootstrapping is not the right option for businesses that require large amounts of capital to begin.
#2. Small business loans
In cases where bootstrapping and self-funding isn’t sufficient, taking out a loan may be your best choice.
While going to a venture capitalist or angel investor might not work, there are other alternatives. This could mean going to a lender that focuses on startups and small businesses just like yours.
But, even when approaching niche lenders, you need to have a solid business plan and evidence to support your ability to repay the loan.
This becomes much easier if you already have a few clients and you’re turning a profit. With this, you’ll be able to show profit projections and other related data. If you can, bootstrap your business before applying for a small business loan.
#3. Personal Financing
It’s risky to start your own accounting business. In many such cases, traditional lenders shy away from funding new businesses as they are deemed to have very high level of risk.
The case for funding becomes even more difficult when the owner of a start-up doesn’t have any of their own money in the business. It’s not easy to ask a third party to lend money for your business if you haven’t invested any of your own money.
If you don’t have any liquid funds to invest, there are other alternatives. According to equity release experts Maxiron Capital, if you own your home you are able apply for an equity release, noting that “instead of waiting months for funding, equity release is a quick process that can get you the money you need within days. This is the perfect solution for business owners willing to release real estate equity to grow their business”.
In addition to equity release, there are options such as refinancing or taking on a second mortgage. You should seriously consider these options if bootstrapping and applying for a small loan doesn’t work out.
Starting your own account business can be one of the best decisions you make in your life.
There are a lot of benefits financially, as well as in your lifestyle, and your overall happiness and fulfillment. However, there will be hurdles you’ll have to overcome before reaching prosperity. One of which, is funding your firm.
Since accounting is primarily a service-based business, options such as bootstrapping, small business loans, and personal financing are excellent choices.
But on top of funding, you’ll also need ways to scale your business. One way is to use automated accounting platforms to streamline processes. This way you’ll be able to save time and money – while providing your clients with a better service.