A bookkeeping business has many advantages, including the fact that it requires less start-up money than many other home-based businesses. It is also much less expensive than other home-based businesses, so it is a great choice for new entrepreneurs. Here are some tips to get started:
Less Expensive than other Home-based Businesses
If you have a knack for numbers and enjoy working with books, a Bookkeeping business might be right for you. Not only does it have a low start-up cost, but it also provides tax benefits and deductions. You can charge between $30 and $60 per hour for your bookkeeping and accounting services. You can also join a Professional Bookkeeper(TM) program, where you will learn how to earn a good income helping businesses manage their money.
Low Start-up Costs
As a bookkeeper, you will need to invest in some basic tools. You will need a computer and printer. A scanner will come in handy, especially if you plan on scanning receipts. You will also need a dedicated workspace and a way to keep everything organized. You may even want to invest in a phone, but the price is minimal when compared to the potential earnings.
A website is important to reach potential customers online. A website can help you create a brand for your business and increase your visibility in the eyes of your target audience. Other than a website, you can also distribute brochures and flyers to local businesses, small businesses, and stores. A bookkeeper must also know how to manage a company’s finances and should consider adding a few more verticals. You should be ready to deal with multiple projects at once, so it is important to learn how to manage several different types of companies.
A bookkeeper generally charges an hourly rate or a monthly fixed fee for her services. Setting fees can be difficult because you may be tempted to set too low a rate just to attract clients. However, this strategy will ultimately end up attracting the wrong kinds of clients. Pricing yourself too low will not guarantee success. You should also have a clear idea of what your ideal price range is.
Social media can be a good way to expand your network. Many bookkeeping companies publish their fee scales on their websites. By reaching out to business owners, you will increase your chances of getting clients. Using LinkedIn, for instance, will help you grow your network. And you can use Instagram to target restaurant owners. Your network will surely grow as you continue working and building your brand. However, you should always remember to set realistic rates for your services.
Moreover, bookkeepers must continue to update their skills. It is important to keep up with the latest changes in the industry. You may even want to consider training in accounting. Earning certification will give you more opportunities and increase your earning potential. Besides, you can offer additional services and charge higher fees to your clients. This business does not require a lot of initial start-up costs.
Choosing a Legal Entity Type
Choosing a legal entity type for your bookkeeping business is the most important decision you’ll make as a business owner. This choice will have long-term effects on your business, including protection under the law and income tax regulations. Therefore, it’s vital to have solid reasoning behind your decision. You should also think about the future of your business when choosing this type of entity.
The types of business entities you can choose from are sole proprietorship, partnership, limited liability company, and corporation. Each type has its own tax requirements, legal liability, and advantages and disadvantages. By choosing the right entity type, you can minimize taxes, reduce your legal liability, and allow for growth. It is important to understand the requirements for each type of business entity before you choose the right one.
If you plan to be a sole proprietor or a partnership, you will need to file with the state and pay any required fees. The type of business entity you should choose will depend on your goals, how many owners you have, and the location of your office. If you’re going to be working alone, a sole proprietorship or LLC is likely to be the best option. However, if you plan on hiring employees in the future, you should also consider an LLC.
Offering more Services to your Bookkeeping Business
Despite the benefits of diversified service offerings, bookkeepers should start small, with a few core services. These services should be easy to implement, and the use of standard tools makes training new clients and adding support staff easier. In the long run, bookkeepers should aim for fair fixed monthly fees. Here’s how to grow your bookkeeping business. You can add more services to your bookkeeping business in the future.