Discussion:Starting out as a side business

My name is Dave, I am based in New York City and just starting out for myself in the tax business.

I'm a Chartered Accountant in England (ACA) and currently studying for the EA qualification. I will hopefully be qualified by this fall.

I spent 7 years in a Big 4 audit practice and for the past 5 years I have been the Controller for a public company. However I am looking to go out on my own and start a tax business on the side. If it's successful I would like to quit my job and do it full time.

For the past few years I've done taxes for friends and family on the side, and this year I had five paying clients.

I've been reading the posts here for a couple of months now and have picked up a lot of tips already. My eventual goal is to have a practice with a good balance of individuals vs. businesses.

Now that tax season is almost over I would like to start promoting my services to business clients, however as I am not yet an EA and doing this on the side, I'm struggling with what my sales pitch should be. Any insights would be much appreciated!

Cheers Dave

1.) increased profits 2.) reduced taxes 3.) improved cash flow 4.) time savings from chasing bookkeeping and tax details You can help with any one or all of these benefits.

There is an accounting services presentation video on the web that a company called NCI (New Clients Inc) uses as the standard boilerplate pitch they use to present to prospective clients. If you go to their site and putter around enough, then you might find it. Watching it will give you a good base from which to build your own presentation in your own style.

Hope you find this helpful, and good luck!

Like much of the tax work, small businesses are largely doing their own bookkeeping using Quickbooks. However, there is an art to setting up the chart of accounts, original entries, depreciation, etc. The do it yourself Quickbooks people usually end up with a mess of their chart of accounts using the Quickbooks suggested accounts. I find that during the off season, there are a TON of these people who need help setting up their Quickbooks and training on how to properly use it.

Michael

I have found it's not hard to sell at all--if you offer pick up and delivery service or some kind of prepaid postage service. That way your home office location doesn't matter. Clients don't want to "stop into" your location anyway for monthly bookkeeping services, at least not until you have built a long term relationship. I started out at home and now have an office outside the home, so I've been down this road a little ways.

There are still plenty of businesses that don't want to bother with the never ending flow of bookkeeping details, even though Quickbooks ads make it seem as easy as taking out the trash. I'm a certified QB Pro Advisor. I find that doing the data entry (bookkeeping or QB input) for clients isn't as profitable per hour as QB consulting (training, setting up Chart of Accounts, quarterly 'check-ups', etc.) However, the QuickBooks engagements are one time here and one time there... versus monthly revenue from bookkeeping services. So the regularity of income that comes from doing their books on an outsourced basis, though less per hour, does help our cash flow.

My .02 worth

Although you've prepared returns for yourself, frinds, family and a few clients, you have not been exposed to the myrad of different tax situations you will encounter in preparing individual and small business tax returns for the general taxpaying public. You might consider taking some practical tax courses from The Income Tax School. After studying tax preparation, you can take a review course to prepare for the EA exam.

Chuck

One thing that I found while starting out exactly like you have--especially sans the taxation experience--is treat each client like a case study. Start with a very good client organizer that encompasses all of the areas of taxation that might need further investigation. Once you have that, research each item on the return. For instance if the client has moving expenses, go to the IRS publication and become an expert in it. That's how I kept myself from going crazy worrying whether I correctly had prepared my client's returns. As a result, I am very well versed in moving expenses, adoption credit, and minister accounting.

You will find that you spend an inordinate amount of time learning on your own dime and your hourly rate falls but in a year or two it all comes together.

Michael

Then, you have to consider the New York area. That's shark infested waters if there ever was any.

I think you will be appalled at what your going to find, however, there's always the chance that your are used to dealing with such folks to begin with. Frankly, it's getting where the Mafioso mentality has risen from the streets to the boardroom, speeded up by the ways of Bush and Cheney, of unhappy memory. (See, for example, Halliburton).

So, perhaps your experiences with much larger business combinations will come in handy. In conclusion: my advice is that you buy two cases of Budweiser in cans, and drink them over the next week (out of the can; ice cold). If you can do this with no problems, you might have a chance. A slight one.

Michael- you and I are on the same wavelength. Treating each new client like a case study works really well. I met with a potential client last week who had gifts coming in from overseas. He wanted to know if there are gift tax implications. I told him that there are some complexities involved and I would have to research it. When I called him back with the answer he hired me on the spot!

Good luck

Pete