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EXECUTION Building an Accountancy Practice

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Bradlad9

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Hey everyone.

It has been a while since I initially posted and introduced myself and in those 4 years, I have grown so much from a personal standpoint.

This post will be a bit more of an introduction post to catch up to the current day and following that my plan for the year.

I plan on posting update posts once a week and chatting in between if people are here.

Introduction (part 2)

I was one of those kids who *wanted* to be an accountant because he loved numbers and money… I took an accounting course in college alongside business studies as well because I always thought I would want to run my own business.

I tried just hard enough to get B’s throughout college whilst also spending a lot of time on football manager. The night before results day I told my family I wouldn’t be going to university and I wanted to go straight into work.

Through a friend, I managed to get into a top 10 accounting firm in the UK. I flew through the AAT course level 3 and level 4 completing these in 6 months each and then went straight onto the ACCA course. I finally became exam qualified in January 2020 before resigning from ACCA the day after receiving my exam results.

In 2018, I tried something different with web design with Fox (which failed for a couple of reasons, I didn’t put the effort in to generate sales, introvert, and also I don’t have a creative bone in my body right now). Following this, I moved to a team of management accountants, where it solidified what I wanted to be doing (working with business owners throughout the year rather than just at the year-end). In 2019 I got a new job with a tax specialist dealing with landlords who I knew from my time at the top 10 firm. This taught me a lot about the accounting/tax side of property investment, which is also something I have been wanting to get into when money allows.

In 2019 I also married the love of my life after just short of 10 years together we finally got married. The day was special and I would live it over and over if I could.

In January 2020 we decided to end the employer/employee relationship but continue on as a subcontractor. I would handle the accounts/personal tax for his clients while taking a % of the revenue. This was a win for me as it meant a fairly low-risk entry into being my own boss. It turns out, it also made me lazy as I didn’t take many risks and mostly just went along with the clients passed along and the work I was doing for him without trying to grow my own business.

In September 2020 we welcomed our baby daughter into the world, who is just the most amazing little girl I could ever have hoped for and has given me a renewed sense of purpose for my business.

So here we are at the start of 2021 - with the personal tax deadline at the end of this month.

Business overview

I run an accountancy practice with myself as the sole employee. Last year I turned over £25,000 and won a couple of new clients for myself. Towards the end of the year, I let the work get on top of me and was consistently running right up to the client deadlines.

Plan for 2021

Overall goals:​

  • 50% revenue increase from £25,000 to £37,500.​
  • 10 new ongoing monthly clients based on Q2 rebrand.​
  • Automate/Outsource as much admin as possible.​

Quarterly targets

Q1 - get at least 3 months ahead of accounting deadlines and have all June deadlines under control/finalised by 31st March 2021.

Q2 - rebrand the business into a business offering bookkeeping and management accounts for landlords offering ongoing support.

Q3 - take-on my first bookkeeper to manage the new clients bookkeeping (how many clients can a bookkeeper handle)

Q4 - publish an ebook/course on bookkeeping for landlords to target the landlords who are not using my service and also build credibility for my business.


Thank you for getting this far, and I am happy to chat with anybody that is here and reading and I hope you enjoy the journey with me. If anybody has any tips along the way, please feel free to post them, I am always looking to learn more.

Brad​
 

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MJ DeMarco

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@CareCPA might have some tips for ya, I think he's been trying to "Fastlane" his practice, not sure how that is progressing.

Thanks for sharing your journey and welcome to the forum.
 

CareCPA

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Thanks for tagging me in here @MJ DeMarco

We haven't fully productized yet, but we do have a lot more staff and we've automated a bunch so I'm not doing as much of the actual work these days.

My first concern from reading through the intro post is that your revenue is $25k (I can't figure out how to get the "pound" sign, sorry), and you're looking at bringing in employees/outsourcing already. If your goal for this year is $37.5k, does that support wages for yourself and another employee?
Are these monthly clients? Annual compliance?

I'm guessing you may not be charging enough - we've all been there. I started on Upwork at something stupid like $30 an hour. That wasn't even enough to equal out to the salary I had previously gotten, but for some reason I felt like if I charged more people wouldn't hire me. That turned out to be wrong.
Heck, sometimes I still don't charge enough.

Picking a niche is definitely key, and it looks like you've done that with landlords. I imagine courses and books are great as lead funnels, probably not a significant revenue source by themselves (but I could be wrong, I don't have empirical evidence on that in our industry).

What metrics are you trying to track? $$ per hour? $$ per employee? Clients per employee (this one seems less helpful)?
 

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Can't say that I like one bit of your plan.

Almost no landlords need a book keeper. Accountants simply set up xero, sage etc and job done. Like paralegals for lawyers, they are disappearing like the clappers

Moreover they do not want to read some book about it. Not in the UK anyway.

Your figures are worrying too.

You aim to add approx £12k a year revenue with an additional 10 rolling clients.

So that is £100 pm per client. This seems very low end and again tech will do a mediocre job so you need to be better than mediocre.

Have a strategy re-think.

For a smallish company ie £1 million to £5 million turnover, most have no real Finance Director and no clue what to do with the figures the software spits out hence all of their lurching from one financial hole into another.

I would think something in that role for clients.

99.9% you could do way better than what you propose.

Dan
 
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Bradlad9

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End of Week 1 Update
I ran the numbers today and there are 33 self-assessments to complete by the end of January and 1 set of accounts.

By the end of February there are 5 sets of accounts that need completing.

By the end of March there are 10 sets of accounts that need completing.

In addition to this, for April/May/June - there are an additional 11 sets of accounts leaving a total of 33 self-assessments to be done in January and 27 company accounts to be done by the end of March.

Planned timeline:

January
33 self-assessments & 1 set of accounts

February
13 sets of accounts

March
13 sets of accounts

Then I will be 3 months ahead - which should be easier to keep ahead of.

I have planned this week out and providing clients get back to me quick enough, I should get through 14 self-assessments this week leaving 19 for next week.

The company accounts due in January is already nearly completed, I am just waiting for queries to be returned.

Thank you, everyone, for your replies, they have all really given me something to think about (when I get a chance - already have some strategy time scheduled in the calendar for early February).

@MJ DeMarco

Thanks for the kind words.

@CareCPA

You are 100% correct about not charging enough, that is both on existing clients and also any new clients I took on last year. My average fee per client is £600 per year at the moment. I have definitely low-balled just to win a few clients and give a bit of security. I think I need to really sit down and consider the value I am bringing to the table for these landlords and what value I can add on top of that. If I had something special to bring to the table then I could obviously charge more.

I am not billing by the hour, I am working on a fixed fee basis, but I have recently started tracking my time spent on each client which will help show profitability going forward and if I do need to be increasing prices.

Do you have any suggestions on metrics to track which will get me pointing in the right direction and asking the right questions of myself?

@Stargazer

I was mainly looking at the bookkeeping as a way to work closer with the landlords and show them what properties are performing well and maybe any that need to be disposed of.

My goal of £37.5k was really just a 50% increase, I run the numbers based on my current clients plus taking on 10 new monthly clients beginning in July/August with the average client fee being £300 per month. If it was to work out then it would be roughly £9k this year (due to part-year) but then would be work £36k per year going forward - which would cover the cost of at least one bookkeeper.

@ragnarcallan

It has recently been taken down due to the upcoming rebranding and outdated information on the website.
 

CareCPA

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@CareCPA

You are 100% correct about not charging enough, that is both on existing clients and also any new clients I took on last year. My average fee per client is £600 per year at the moment. I have definitely low-balled just to win a few clients and give a bit of security. I think I need to really sit down and consider the value I am bringing to the table for these landlords and what value I can add on top of that. If I had something special to bring to the table then I could obviously charge more.

I am not billing by the hour, I am working on a fixed fee basis, but I have recently started tracking my time spent on each client which will help show profitability going forward and if I do need to be increasing prices.

Do you have any suggestions on metrics to track which will get me pointing in the right direction and asking the right questions of myself?
I still look at revenue per hour, even if I am flat-fee billing. We haven't really done "value-billing" because I can't figure out how to sell it. It's hard for me to convince someone that we're adding $10k of value to their business, so they should pay us $2k even if it takes me 10 minutes to do. Extreme example obviously, but hopefully illustrates my struggle.

That being said, don't discount the amount of knowledge it takes to do what you do. I have clients say things like "this is a short form, so it should take 10 minutes." And it may be a short form, and it may take 10 minutes to fill out, but I may have done days or weeks of research to become an expert in that form so it only takes 10 minutes in the future (US forms are notoriously ambiguous).

I also like to look at revenue per employee (and gross margin per employee) since we're doing flat fee. This is just another gauge of whether or not we are charging enough, if we have enough documentation for each person to be efficient, etc. There will be some natural fluctuation here as people naturally work at different speeds.
 

Bradlad9

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End of Week 2 Update

This is the first full week update and I think it went pretty much as planned.

I have submitted 9 returns and have 3 out with clients waiting to be signed and a further 3 with clients where I have queries. This week was completing and finalising the big returns which take time, the majority of remaining returns are simple enough and should be completed quite quickly.

I have been using my spare time in the evening to catch up on emails and plan the next day so that I can focus 100% on completing the tax work during the days when clients are available. It feels so much better starting the day ready to go rather than having to spend time planning in the morning.

As I mentioned last week, I haven’t had a chance to think about the strategy side of things for my business just yet - my head has been all-in with these returns. I am looking forward to sitting down and considering all the options and putting some plans together.

As January comes to a close it is looking like January revenue will be at least £4,150, which is my biggest month yet! Once all the remaining personal tax returns are complete I should be able to push this to around £5k. Hopefully I can keep it up and get the work in and out to keep the monthly income high.

I am also currently living my admin life on excel, I am looking at software to automate as much as possible of my admin. If anybody has any resources they use to ease the burden of general business admin I would love to know what you use and how it has helped?

Thanks for reading again everybody!
 

Bradlad9

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End of Week 3 Update

Trying to build a bit of structure into it this week to take forward, let me know what you think of the new structure.

Summary

Did not hit the target of getting all tax returns out, the deadline was extended so it is not the end of the world. I did manage to get the accounts out which had the deadline of today.

Managed to get my first £5k month with my invoiced income at £5.6k - (£333 outstanding) - net profit before tax £3.8k.


Positives

First £5k month of income

All deadlines met

Positive conversations with clients

Good to be part of an accountability group


Negatives

Behind on planned work - future plan adjusted

Absolutely exhausted yesterday


Next Month Plan
  • Business strategy meeting
  • Complete all personal tax returns
  • Complete all February & March accounts deadlines

Next Week Plan
  • Personal tax returns complete (5 with clients nearly complete, 1 to start, 1 waiting for information)
  • Strategy meeting on Friday

Overall comment and something to live by - More action taking, less action faking!
 

Bradlad9

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End of Week 4 Update
Poor week overall in terms of productivity and getting things done.

Summary
I am currently waiting for information on all the remaining tax returns, these are out of my hands though so while my plan has not gone perfect, at least they are not with me.
I had a deadline on Friday which meant the strategy meeting has been put back. Currently I have it in the diary for Wednesday.
I purchased the book “Show your work” yesterday and have started reading it - I have wanted to start a blog for some time, I think this will likely push me over the edge to start. Would likely mean that I will be posting updates over there while keeping the weekly update here.

Positives
All personal tax returns are out and waiting for other people.
Really positive client feedback from a few clients.

Negatives
I didn’t get enough done this week to keep on track. I need a standout week next week to catch up. I did have a planned day off this week to spend with my family, but I have been distracted on other days also.
Very distracted and procrastinated on a big piece of work which turned out to not be so big!

Next Week Plan
5 sets of accounts due in February/March completed.
Strategy meeting on Wednesday.
 

Bradlad9

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Read Millionaire Fastlane
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Feb 15, 2017
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United Kingdom
End of Week 5 Update

Just a short update this week to check-in.

I had a strong start to the week and a strong end to the week, life got in the way of work mid-week, but I am happy with my priorities, and work definitely does not come first in certain situations.

All February deadline work is no longer with me, I am also making good progress on the March work.

I have still not had a sit down to consider my business strategy.

I hope everybody is doing well and is staying safe this year!
 

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