Starting an accounting / bookkeeping firm as a side job

[Egert]

So, A little bit of background from me. I will turn 22 at the end of the month and I have worked as a equity sales trader for 10 months now. I got picked straight out of university (studied econ) and I continue my undergrad studies in business/econ, hoping to graduate in spring 2012. To make clear, I want to pursue my career in (commodities) trading ideally after graduation and thinking about moving abroad, since there aren't any real commodity business here... And I am looking for something as a side business that would generate me somewhat passive income or on what I eventually wouldn't work more than some 10-20 hours per week. There are no compliance issues with my day job. About a year ago, before I had a real job, I thought seriously about opening a small bookkeeping shop. Now, that idea has come back to my mind. Where I live, you don't need any public certificate, unless you do auditing, which I will not plan to do. As pretty much every bookkeeping company charges a monthly fee, based on the amount of entries, or they provide you a custom quote. I thought about charging purely on a single-entry fee, which will be lower than what you pay per entry with a monthly fee. So, some of competitive edge comes out of it. I can obviously cover all my work myself in the beginning, but bigger plan is to get some freelancers or even college students to do the job and offer them something like 75-80% per entry from what I charge. Since I can work from home and have no need to schelude client meetings in some office, I have almost no start-up costs, except registering a company. I did some freelance graphic design and web-based stuff when still in high-school, so I can probably make the website and everything corporate, like advertising materials, business cards, etc... Now, as it comes to real accounting, I have strong theoretical knowledge and a few accountants I know. One of them is a CFO of a medium-sized company and had the thought of going solo herself, but finally gave up on it due relatively good salary with no risk. However, strongly encouraged me back in the uni and is willing to help me out, should I run into any questions/problems. My idea was to start small and get 2-3 companies as a start and build from there, so I wouldn't overkill myself (still have a day job + university). Has anyone done something similar? This is just a short description of what's going on in my mind and I hope I didn't make a fool out of myself, as I am serious about it. I am open to suggestions, thoughts and shared experience.

 

[Aaron]

I would reconsider your pricing strategy. If you're just a little bit cheaper than everyone else you'll get overtaken easily by an experienced competitor when they discover your pricing or get really, really low quality clients that will be more of a headache than anything else.

I would also question time. If you are already going to university full-time and have a job where are you going to fit this in?

 

[Egert]

Originally Posted by Aaron

I would reconsider your pricing strategy. If you're just a little bit cheaper than everyone else you'll get overtaken easily by an experienced competitor when they discover your pricing or get really, really low quality clients that will be more of a headache than anything else.

I would also question time. If you are already going to university full-time and have a job where are you going to fit this in?
Thanks,

My pricing would be only a little lower, or rough equivalent of what the cheapest companies charge. I have no intentions to do dumping and smalltimers can not do it. And there are some cheap companies that turn down clients due extensive loads of work, so there is still room for another bookkeeping firm.

Even if I am doing 8-10 hours of work everyday and have over 40 ECTS this semester, my classes are mostly from monday to wed/thursday. And I find myself with tons of extra time on the second half of the week, which I would put into good use. My total for job/uni is less than 70 hours a week and I am pretty young with no family and tons of energy to spare (I even thought about picking up some charity work). And, I will start doing this 1 client at a time and should I hit my maxima, I'll find someone (even met with people who are interested and competent, when I had the thought firs time around) to gradually direct the work to.

 

[Egert]

bump

 

[level32]

It all sounds good though I have not much idea of what you'd actually be doing. However, I think it'd be hard for anyone to give you good advice unless they knew the market/demand in your area anyway.

 

[delightindisorder]

You may want to take a look at the IRS' unenrolled preparer initiative, if you plan on getting into returns. It's new for 2011.

 

[Egert]

Originally Posted by rich_202

I'd suggest that you start slow to see if you can manage the additional workload.
That was my plan

thanks for sharing