Congratulations, you’ve survived your first 12 months in self-employment. By all means, celebrate, but pause and reflect too.
We’ve spoken to three accountants to find out what lessons they learnt from their first year in business: what went well, what could have gone better and what they would have done differently given the chance.
Rebecca Trudgett, who founded SwitchFoot Accounting in September 2017, admits the first year was definitely not plain sailing.
“At first it went really well, with a lot of support from my business friends. Then I got to the new year and things went quiet – I was clearly out of the honeymoon period. I had to do consultancy work for other practices and one-off Xero consultancy to supplement my income.
Some clients took 12 months and longer from initial conversation to sign up and start paying. I did have doubts, I had to hustle and bootstrap, and to make compromises.”
Adrian Markey set up his practice two years ago but continued to work in other roles, before going fully self-sufficient last August. He also found the process of getting clients onboard slow and frustrating.
“Of course I secretly hoped it would be a tsunami of new clients straight away, although I was being realistic to the fact that this probably wouldn’t happen. To an extent, however, I did think that once I started marketing, the emails and calls would just start coming in, but that wasn’t the case.”
Markey soon realised that he should focus more on building up his brand and reputation rather than on building his client base.
“One was bound to lead to the other. From the potential client perspective, I was unheard of and unproven. I took the approach that I had to hold myself out as the expert on something specific, put out content that supported this and then hope it would resonate with people who wanted to continue the conversation.”
In late 2017 and early 2018, Markey started advising in the niche area of cryptocurrency taxation.
“The cryptocurrency market was booming and people were beginning to consider how it impacted their taxes, so I put out what I considered to be the stance that HMRC would (eventually) take.”
He says this one blog post that he created changed everything. “Clients were now coming to me rather than me seeking them out.”
But he didn’t rest on his laurels and spent most of 2018 continuing to market his expertise in that area.
From side hustle to new business
Zoe Whitman started her bookkeeping practice But the Books, as a side hustle whilst on maternity leave and then returned to work part-time running the business on the side. She also spent the first 12 months building her brand, networking and marketing.
However, she admits: “I didn’t push for new business as much as I could have done, so it was another six months before I was confident enough to leave my job, hire a team and take the business full time last August. If I’d started out again, I’d certainly have taken these steps sooner. We now have a very clear process for tracking new business and pursuing leads.”
The first 12 months of self-employment are certainly a steep learning curve.
“I also had to quickly address other knowledge gaps. I’m now a CTA Tax Pathway student, which is the best decision I made.”
“I thought I knew a reasonable amount about business development from my previous role, but it turned out I still had a lot to learn,” Rebecca Trudgett says.
All the right moves
Trudgett knew she could have built the practice initially much faster if she’d taken on anyone and everyone.
“But I didn’t want to take on clients whom I’d later have to orphan, I only accepted those who fitted the practice I wanted to build,” she says.
She adds: “Early on I decided not to charge low fees. I wanted to attract clients who understand that having a qualified accountant is an investment. I don’t offer discounts or mates-rates either, as this would also undermine the quality of the service I offer.”
Trudgett also quickly realised that the only way she could continue financially was to bill in advance and move all clients onto monthly payment plans using GoCardless.
From day one, both Trudgett and Markey have worked to fixed fees, too. “The clients definitely appreciate the certainty,” Markey says.
He also stands by his prices. “The specialist cryptocurrency work is currently priced at a premium given that only a handful of firms are actively marketing themselves in this area of taxation. So, for the most part, I will pass on potential new clients who feel the service is overpriced.”
Zoe Whitman started out charging an hourly rate, but moved to fixed fees as soon as she established a clear value proposition. “For some clients we were able to set a fixed fee very early on, but certainly by the time we were 12 months into business, we had a very good idea of what our packages would include for a typical client.”
Fine-tune for success
18 months on, Trudgett’s business is generating referrals without her having to force them, so she’s busy doing some fine-tuning.
“I’ve always used templates to reduce the time-consuming engagement processes, but soon I’ll also be using Practice Ignition to streamline my processes further,” she says.
She’s also reviewed her networking to see which activities are the best use of her time:
“Networking and having a support group is essential when you start out and I couldn’t have done it without them. But in the last 6 months I’ve become more selective about the type of networking I do and now choose to do more community-based networking.”
Setting the standards for clients and your business
Markey has decided to be more selective about the work he takes on.
He’s also going live with a new website shortly. “It’s much more attractive and promotes the practice better. The original one was a bootstrapped, homemade project.
“In the last year, I’ve grown to appreciate what I actually like doing. I’m now happy to pass on work that I don’t really want to do or on clients that I don’t think I click with.
It wouldn’t be worth it in the long run and it’s freeing up capacity for the work that I do enjoy.”
For more on starting a business check out this article.
Iwona Tokc-Wilde is a business journalist.