I remember the time I decided that I wanted to be my own boss and start my own practice.
Back in 2001, things were a little different to now, for instance:
- The internet was nowhere near as widespread and sophisticated as it is now
- Social media didn’t exist
- Nobody had heard of the cloud
- Internet access was making the transition from “dial up” to “broadband”
- It was still commonplace to file accounts and tax returns in paper form
- Payroll year end was a once a year paper exercise
When I took the decision to make this change in my career, it was a huge step especially as I was making the transition from industry to practice. I had a very steep learning curve to make this change. The first thing that I had to do was take a good hard look at my knowledge, not just of my accounting skills, but also of all of the things that happen in the periphery of an accountancy practice (practice management) and so my initial CPD plan that would help me take this forward was born. My research consisted of many visits to the local library, speaking with colleagues and mentors, checking out as much detail as possible from the AAT website and visiting my local branch.
The first few years of running my business were challenging but with some determination and some support from colleagues and my family, I made it through the crucial stages that are the first couple of years in the life of a business.
Many start-up businesses fail in the two years for one or more of the following reasons:
Starting the business for the wrong reason
In my case the main incentive was more family time by achieving a favourable work/life balance. I factored this into my plans by ensuring my pricing was at a sufficient level to be able to sustain me, without over-stretching my working hours. It is also important that you have the right frame of mind to work for yourself with the required passion to continue, in what can feel like a very isolated existence.
This can be the case whether you are working for yourself or managing a team. In my experience, my will to succeed along with the passion for my career was a sufficient motivator to help with my success. It’s not just about people though – systems, hardware and software also need careful management along with the ability to spot a mistake, before it is too late.
Lack of planning
This follows on from poor management. You need to be focused on the strategy that you will need to ensure that you can meet your goals. You also need to be aware of changes in rules/legislation etc. Here is where your CPD plan can help to ensure that you remain ahead of the game allowing you to make your ongoing training focused on your business plans. There is the phrase “fail to plan and you plan to fail”. This is very true, so I ensured that I had a clear and flexible business plan.
Lack of capital
This is especially important if you are making a transition from employment to financial self-sufficiency. Your business plan should help you not to run out of funds prematurely. There also needs to be sufficient cash to enable you to invest in the required hardware/software/unexpected costs.
Even though the internet was still not as big as it is today. when I started out I made a point of having a website from day one. It is no use having a business if your customers cannot find you online. Your website is part of your armoury here. I set up my own very basic website which meant I could populate many trade and other directories to help businesses find me – things are even easier and more cost-effective now with the advent of WordPress websites that allow you to maintain and update websites yourself.
Where to work
A majority of businesses will initially operate from home and this is something that should be factored into the planning process. It would be foolish to invest in expensive office space until your business grows steadily and you can sustain the appropriate location. In my case, we went from spare bedroom, to converting the garage and finally into rented office space, on the High Street, where we still are. I guess I must have done something right because here we are 15 years later and still going strong. A little older but hopefully a little wiser.
If I had my time again, would I do the same? Definitely. Would I advise others to do the same? Without a doubt.
So, how have things changed and what should you consider before starting out on your own?
I guess the biggest difference is the fact that more and more of our work is done online now, for instance:
- The vast majority of accounts and returns are now filed in a digital format
- Cloud accounting packages are starting to become the norm
- The government is in the process of “making tax digital”
There is now a huge amount of information, guidance, discussion forums and CPD at our fingertips so doing your research is much easier. You have the choice of general reading, webinars and organised courses. But the changing accounting landscape is something that should be seriously examined by the potential practitioner.
With the advent of cloud accounting, many business owners are taking on their own bookkeeping. Whilst this may appear to be taking some of our work away there are some advantages, for instance:
- We can look at their data in real time – no more waiting for a backup
- We can make year-end adjustments for our clients
- We can train them in the effective use of the software
- We can assist them in making the best use of the package, for instance cash-flow forecasting and other management reports
The biggest change on the horizon, is “Making Tax Digital”. This is one of the biggest changes to affect our profession since the advent of self-assessment. Again, there is some worry that this will take away some of our tax return compliance work. But there is a positive outlook here, in that many of our clients won’t be in a position to meet the reporting requirements themselves so we will be able to assist by implementing and operating an accounting system that will make them compliant and with the rise in cloud accounting this should be a much easier task for us to undertake.
Finally, there continues to be an increase in people working for themselves. All of these people will need assistance in one form or another, whether it be advice on business structure, taxation or general help with maintaining records. These are all areas where we can become their “go to experts”, to help them to make the correct early decisions for their businesses along with being a guiding hand through those early difficult years.
So what skills should AAT members have to be ahead of the game in the profession?
Up to date knowledge is everything
It is essential that AAT members continue to make sure that their skills are up to date. There are many tools that you can employ here. I use the various means that AAT supply, such as podcasts, webinars and AAT Comment. I also use a focused approach on Twitter by employing Twitter lists which filters my feed with posts that are relevant to my business. There is also a wealth of information on the Gov.UK website.
Take a wide view of the world of accountancy
Make sure you are up to date with changes that are in the pipeline. This can be achieved by focusing your research on the appropriate sites such as AAT, Accounting Web, HM Treasury along with targeted twitter feeds/lists.
Be “business aware”
Take an interest in the changes that are being faced by businesses because this will help you to become a valued adviser. Whenever we take on a new client we always do some background research into their business as this will help us ask the correct questions and offer the correct advice on an ongoing basis.
Try to become an expert in a particular field of business or niche
This will help to make you a go to person for businesses or work colleagues to approach for advice. In my case, I focus on small/micro business start-ups and compliance. You could also focus on things that interest you or a particular field of business that you have had involvement with. This doesn’t mean you should only work on the specialism however it is good to have a focus.
Work on your people skills
Make sure that you have the competence as well as the confidence to be able to deal with others effectively. A potential client will become very nervous if you don’t appear to know what you are doing or saying. Here it is important to only undertake assignments that you are fully competent in because with this will come confidence. Better to be honest and tell a potential client that you don’t know than to take a chance and risk making a fool of yourself and the profession.
Use social media wisely
Make sure you have an up to date and comprehensive LinkedIn profile. Interact with people/businesses that you want to work with and let them know that you’re there and all the services you offer.
Build up your network with contacts that can help you and those you can help. Your network will be invaluable if you encounter problems that need to be discussed, for verification and confidence building. Always try to return the favour when possible. It will also help if you can work with other businesses where work can be referred between yourselves.
Actively search out opportunities whether you are working for yourself or someone else make the effort. Don’t be afraid to contact colleagues/contacts from previous work situations, to let them know what you are doing. I did this with an accountant that I used to have dealings with in a previous job and I was rewarded with a large amount of work, which he happened to be looking to outsource.
And finally remember, you can have a fantastic career in front of you. As long as you have the desire and focus to make the most of all of the knowledge and support that is out there you can make it happen.
Henry Cooper FMAAT was AAT's 32nd President.