Owning your own practice can create huge opportunity – income, flexibility, asset value, work/life balance and more. But where do you start? In an ever more complicated world, what should you consider when looking at setting up on your own?
After helping hundreds of people start their own practice with TaxAssist Accountants, we think these are the key questions to consider:
1. Are you really ready for the realities of working on your own?
Moving from employment to self-employment can be a huge step. Most would say that the single biggest change for them was adapting to work on their own or as a part of a small team. We tend to take talking to colleagues for granted, but how will life feel without a support structure around you?
2. What key skills/experiences do you have and how will they influence your practice?
Our skills and experiences influence the way we work day-to-day, and they shape our work preference. It is also true to say that practitioners are generally more successful when they structure their business to play to their strengths – this usually adds more value for clients. So when you are looking at structuring your practice, think about those areas you are most suited to, and the gaps you may need to fill over time.
3. What types of clients will you try to service – and what will you sell them?
This will be partly influenced by your experiences to date, but you will need to give some thought to the types of clients you want to work with and what you can provide them. Larger, more complex clients with high-level compliance and advisory needs are attractive because of the potential fee levels involved. These sorts of clients can help grow a practice quickly, but you need to consider the amount of time these types of clients can demand, the internal compliance requirements they may
trigger and the risks often involved.
Running your own practice is about profitability, not top line so it may be better to keep things simple and focus on smaller clients with more routine compliance and low-level advisory needs. Yes, fee levels are lower, but it is easier to service and support these types of clients and they can often be more profitable in the long run.
4. How are you going to win these clients?
Probably the biggest single concern for practitioners – the fear of sitting behind a desk, wondering where the next client will come from.
Every practice, existing and new should have a marketing plan to help focus on winning new clients (as well as cross-selling to existing ones). This should cover digital marketing, traditional targeting, referral opportunities, networking and any other opportunities that may be available in the market. Remember that you need to allocate a realistic amount of time to this as you start building a practice to maintain that stream of new clients.
5. What role will technology have in your practice?
An ever more relevant question. We work in a world that is increasingly influenced by new technology: cloud accounting software, tax digitalisation, automation and AI. The sector has changed fundamentally in the past 10 years and we have to expect this pace of change to increase.
You need to consider where your practice fits into this ever-changing world. How will you incorporate technology and software into your practice? What services will this allow you to deliver? Many will see these changes as a threat. The successful practices of the future will be those that embrace change and see the opportunities it creates. But remember, you need to find the time to consider all of this while running your practice.
6. Where will you get technical support from?
Although technology is changing how practices deliver services to their clients, we still operate in a sector that relies on individuals having, or being able to access, a high level of technical expertise.
Practitioners will need to have access to affordable and responsive technical support to help them quickly deal with the huge range of client scenarios/issues/questions they will come across. You do not want to be spending unnecessary time looking up obscure technical references – time is money, and therefore, profit.
7. How will you find good staff and what will you do to retain them?
Staffing has become more challenging for practices over recent years. The demand for good quality staff has outstripped supply for some time now, meaning that salary levels have been steadily increasing. It is likely that you will need help fairly quickly, so think about where your staff will come from. Traditional recruitment consultants/agencies, online providers, social media or word of mouth?
You also need to consider what you need to do to make sure you retain your good people, as they will be approached with offers on a regular basis. Give some thought to working conditions, benefits, bonus arrangements and other incentives that may help.
8. How are you going to grow the practice and what will your role be?
If you look at how practices grow, you will see points they often become ’stuck’. In many cases this is a result of the role of the owner/practitioner. If you’re spending all of your time working with clients, you will not be able to get past a certain point – you only have so many hours in the day. Remember that it is all about that old adage – work on the business, not in the business.
9. What are your funding needs and how will you raise these funds?
Another common barrier to growth is funding. A new practice will need to fund any setup costs, but it will also need to consider longer term working capital needs.
Debtors and work in progress need to be funded, along with an early stage losses (and new practices will almost certainly make losses in the first 12 to 24 months). You also need to remember that you will need to fund your drawings/salary until cashflow supports this.
These factors can mean that new practices need a fairly significant amount of funding in the early stages, so make sure you start building relationships with banks/other external funders. Also bear in mind that you will need to have a detailed business plan in place to support any funding application.
10. What is your ultimate exit strategy?
It seems odd to think about an exit strategy when you’re first starting out, but it is important to have this in mind from day one. You will want to build a practice that can generate profits and income, but also remember that you are creating an asset that you will want to realise at some stage.
The value of practices are usually expressed as multiples of fees and the range of these multiples can
be wide. Think about why certain practices are worth more than others and what you need to do when building your practice to maximise this number when the time comes.
The Franchising Option
The alternative to going into practice entirely by yourself is to start a franchise, or take over an existing one.
A franchise is a self-employment business opportunity which provides you with a proven, successful business concept and an established brand name, plus the benefit of a team of support staff covering all aspects of growing your practice. As a franchisee, you are in business for yourself, but not by yourself.
The support you can expect includes:
1. A brand with a strong track record of success
2. Comprehensive training on running your business
3. Marketing assistance and advice
4. Easier to obtain finance than for a new business start-up
5. Reduced risk to your investment
6. Ongoing technical and operational support
7. An exclusive, defined trading area in which you are the brand’s sole operator
8. National brand exposure
This ongoing business support removes many of the hurdles of starting and growing your own practice, as is highlighted by research by the industry’s trade body, the British Franchise Association: around 90% of franchisees have independently reported a profit annually for well over 20 years consecutively.
Franchising with TaxAssist Accountants
As a TaxAssist Accountant, we will help you employ a team and become a focal point of your local business community. We are with you throughout your business journey, providing comprehensive guidance and full technical, marketing and business development support.
Our proven lead generation service, delivers the right prospects to grow your fee bank, while your own responsive website and digital marketing campaigns increase your visibility locally online.
And the TaxAssist Training Academy provides bespoke support for you and your team, ensuring your business remains the local market leader, operating to the highest professional standards.
There are three different ways you can join us and become a TaxAssist Accountants business owner:
- You can build your own accountancy practice as a new start-up. Our franchise fee in this scenario is £19,950+ VAT.
- You can buy an established TaxAssist Accountants practice which represents an excellent foundation upon which a new owner can further develop an established business with an income stream from day one. Our fee for a franchise resale is half of our franchise fee £9,975 +VAT, as well as the price for the overall business.
- You can convert your existing accountancy practice over to TaxAssist Accountants utilising the TaxAssist brand, support and systems to grow your practice to the next level. Your overall business start-up costs will depend on your current situation and is subject to the territory location being available. Our conversion fee is the same as for a resale, at half a franchise fee £9,975+VAT. Subject to a minimum fee base of £50,000 being involved.
The total investment required will be dependent on location, working capital and level of personal drawings required. We will work closely with you throughout the business planning process to establish the right level of investment.
The major banks fully support the TaxAssist Accountants franchise model and will typically lend 70% of your total investment.
And when you are ready to sell your practice, we can help you realise the maximum value, on many occasions achieving prices in excess of industry norms. More than one TaxAssist Accountant has sold their business for in excess of £1m.
