How to Start a Bookkeeping Business and Get What You Want
The best way to get started is to come up with clear answers to these two questions:
1. WHY do you want to work as a freelance bookkeeper?
2. WHAT does a freelance bookkeeping business mean for you?
There are no right or wrong answers here, but without these answers before you begin your business, you could end up frustrated and in a situation that you don’t want.
The reasons for starting a bookkeeping service business vary, but often it is sparked by a short-term situation. It might be that a job or other reliable income source was suddenly lost, or new household expenses arrived (such as a new family member). Regardless of the circumstances, oftentimes the primary motivator is a need for more income quickly.
If that’s the case for you, a word of caution is in order. There is a difference between creating a job for yourself so you can work from home, and starting a business – it’s a BIG difference. Starting a new business with your eyes open will determine whether you get the results you want, or struggle, sometimes for years.
This is not intended to discourage you from the idea of starting a freelance bookkeeping business. Far from it! It’s more about setting yourself up for getting exactly what you want right from the start.
When you think about WHY you want to become a freelance bookkeeper, is it because you simply want to work from home with a flexible schedule, possibly to be more available for your family? Or have you always wanted your own business and like the idea of providing valuable services to a variety of clients? Are thinking about building a team of bookkeepers? Maybe you’d even like to pass the business on to your children, or selling it when you’ve had enough of it.
Your first step is to take some quiet time, 30 minutes or so. Envision in your mind’s eye, vividly with as much detail as you can muster, what you see your life being like running a freelance bookkeeping business of your own. See yourself actually doing it. What would your daily routine be like? Would you work from home? Would you have a virtual staff? How would it fit into the rest of your life?
Do this type of daydreaming first, before you get down to the “practical” steps of wondering what services you’ll provide or which software programs you should use. Instead, compare that vision, that picture and feeling of what your business will be like, to where you are today. No matter how dramatic the difference between your vision and your life now, it’s just a matter of moving one step at a time from where you are to living your vision. Really.
Getting from Where You Are to Where You Want to Be – Quickly!
Now that you know clearly what your freelance bookkeeping business will look like, it’s time to take practical action to bring it into your life. How? With a basic plan, of course!
Laying the foundation and plan for your business is part research and part learning as you go along. So you will need a measure of flexibility. But always start with the vision of what your business will look like when you have “arrived” at how you want it to be.
Then it’s a matter of finding what will cause the results you are looking for. That is, what expertise do you have now, and what do you still need? Clients will pay you for the value you provide them. So, what value do you have to offer, or what could you develop? Do you have any specialized knowledge, such as is needed in a specific industry? An example might be if you have experience with bookkeeping for a non-profit organization.
You’ll also want to consider a basic budget and how much you will need to charge in order to meet your financial goals. How many hours a week do you want to work? Don’t forget to consider the “overhead” expenses involved, such as insurance, taxes and vacation time.
Finally, you’ll want to have a plan for how you will market your services and attract clients. Just being “ready” to offer bookkeeping services will not automatically attract clients. You need to get the word out to those who are looking for the specific services you have to offer. That’s what a marketing plan will do for you.
We’ve briefly touched on some of the setup work needed before you start looking for your first bookkeeping client as a freelancer. Without proper planning, while you may bring in some income reasonably fast, you won’t end up with the business of your dreams unless you are clear on what you want and how you plan to move in that direction first.
But putting it all together doesn’t have to take a long time or be difficult. In fact, if you’re ready to start your freelance bookkeeping business using the power of the Internet AND you want to know how to snag your first paying bookkeeping client quickly, check out my no-fluff audio book, Virtual Bookkeeping Secrets, and use the included business planning worksheets.
If you’re already running your bookkeeping service business, what do you wish someone had told you before you got started?
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10 Responses to “How to Start a Bookkeeping Business and Get What You Want”
Michael Cook on May 17, 2012
Thanks Gabrielle,
Thanks for this trip back to the basics of starting a freelance bookkeeping business.
Yes, it is important to have a firm vision of what it is we really want to accomplish and why. Everything else must grow from this place. Otherwise, we’ll end up with just another ‘JOB’ and plenty of dissatisfaction.
-Mike-
Gabrielle on May 19, 2012
Exactly, Mike! Being a business owner and knowing how to do bookkeeping are really two different things!
Paula on May 17, 2012
Hi Gabrielle,
I always appreciate the no-nonsense, practical advice in your articles and the gentle nudge you provide for newer independent bookkeepers & those already established!
I agree with Mike – the back-to-basics is well-timed and it’s always a good reminder to re-visit the vision we had when we started. Getting closer to that vision is true progress.
Thanks!
Paula
Gabrielle on May 19, 2012
Thanks, Paula. I’m glad it’s helpful. And I agree! Using that vision of where we want to be is an excellent way to check in every now and again to make sure we are still on the right path.
Briana Woody on May 17, 2012
Well put. My only advice to the brainstorming is, when you’re ready to hammer out the details and processes, to stay focused when doing on-line research and limit your time (the length it takes to do a task tends to expand to the amount of time you allot for it). There is so much small business, accounting, marketing information on-line that I wasted hours (probably days) just daydreaming about how I wanted my business to be structured and reading advice just because it’s exciting (Excuse the term “entrepreneurial porn”, but it’s so accurate!). Over time, I’ve learned to focus my research and planning to the task at hand – website development, learning tricks in the software, etc. I’ve enjoyed your website, webinars and articles because they are specific to our freelance bookkeeping community. When I need motivation, this site is a great place to light my fire.
Gabrielle on May 19, 2012
Great advice, Briana! Yes, Parkinson’s Law is definitely in force when doing research on the web. I actually use a timer sometimes to make sure I don’t get lost in the surfing! And too much research can also lead to info overload that can be paralyzing. Thanks for the sage reminder!
I’m so happy to hear that this site has been a resource for you, along my other programs. We’re definitely all in this together!
mark gerson on May 20, 2012
Gabrielle, thanks for taking so much time to create such a great blog and share your experience with all of us struggling bookkeepers. [comment edited]… your site will really help me build my practice. Thanks, and keep up the good work.
Gabrielle on May 20, 2012
Thank you for your good words, Mark. I have edited your comment, however, since you already get a link back to your site when someone clicks on your name. In general, it is not good web manners to attempt to draw traffic from someone’s website by leaving backlinks in your comment. Just so you know.
Don on May 24, 2012
Your articles are very resourceful and practical. After reading your articles on freelance bookkeeping I also need to do big changes and to have a good marketing plan to folow.
I have a question in Quickbooks probably you may answer. How to do the bank reconciliation in the first month of the new fiscal year after closing the books for the last fiscal year. Specially after making adjusting entries for expenses like utility bills. eg. we receive utility, telephone etc. bills in the new month which portions of that belong to last fiscal year. We do assumptions rounding figures like 100, 250 … like while preparing financial statements at the year end. But actual bills come with exact amounts like $103.28 , 257.12. In this case what should I do to do Bank recs where many such bills are paid through pre-authorized bill payments.
Thank you
Gabrielle on May 25, 2012
Hi Don,
To answer your question, I’m making a couple of assumptions: The adjusting entries were made so you could get accurate financial reports for the fiscal year ended. You are using the Accounts Payable function within QuickBooks. If that is true, then why wouldn’t you make reversing entries once in the new fiscal year, especially since they were only assumptions for reporting purposes? If you do so, it will zero out those “temporary” entries, which can be cleared, and present no problem for your bank reconciliation, which will not affect the actual bill amounts and amounts paid. Hope that clarifies it a bit.