Starting Your Own Accounting Firm

Ever find yourself dreaming of breaking out from the rigid confines of your accounting role? You're not alone. Many of us get into accounting with a passion for business development or a love for numbers, only to feel boxed in by the relentless chase for billable hours. Let’s dive into why more accountants are starting their own firms and how they're doing it successfully.

But before we jump into the content it’s time for a quick word from our sponsor, who supports so many people running their own practices.

Building the Ideal Team at Your Firm

Ready to future-proof your accounting firm? Jason Blumer covers approaches on building a rock-solid practice that's as proactive as it is profitable by focusing on these 6 key areas of your firm's operations. (Hint: It isn't all about embracing technology.)

Through The Big 4 Transparency Podcast, I’ve been interviewing a very large number of firm owners, and I’ve become fascinated with the traits they have in common. In this newsletter I’m looking to share some of those common threads I’ve found in speaking with people.

So, Why Are Accountants Starting Their Own Firms, and Who Is Doing It?

1. Breaking Free from Constraints:

Take my story, for instance. I was passionate about business development but constantly found myself limited by a role that measured success by billable hours alone. Many of the people who went out and started firms were finding themselves searching for a way to make their role feel more fulfilling and bring their whole selves into what they do. Starting a firm was the best answer many of them found.

2. Lifestyle Improvements:

Imagine working fewer hours and still making over $200k a year. Sounds like a dream? Well, it's becoming a reality for many solo practitioners who have scaled up. The allure of more freedom and better work-life balance is hard to resist, and although there are hard times in entrepreneurship as well, many looked up at the lives partners were living at their firms and realized that they were not building toward the outcome and lifestyle they wanted. Once firms have scaled and started to hire staff, firm owners have shared with me that they are making as much or more than the partners at the large firms they left, while maintaining more control over their lifestyles and hours.

3. It’s Not About the Accounting:

Surprisingly, many successful firm owners admit they didn't love the accounting work itself. They weren't necessarily the best at it either. The key to their success? Shifting focus from being a top accountant to being a savvy business operator. Your first few hires can make or break this transition, but it’s possible to find success in the accounting firm space without necessarily being passionate about the accounting itself.

When Is It Time to Jump?

Working at a small firm can be a huge advantage. Just like a Big 4 name on your resume can open doors, small firm experience can give you a holistic view of client management. This hands-on experience is invaluable when you decide to start your own practice, helping folks with small firm experience make the jump a little earlier. Typically though, it’s managers and above who are finding success because they go in prepared to handle the client file from end to end, and have hopefully already built out a network that can get them started.

Advice for the Early Days

1. Pick a Niche:

Specializing in a niche offers numerous advantages. You can develop tailored processes and technologies, focus your advertising efforts, and build a reputation as an expert in that area. This niche expertise often leads to increased referrals and a more robust client base, as well as an advantage over less specialized firms offering services in your space.

2. Build a Strong Network:

Never underestimate the power of a solid network. It’s essential for referrals and direct clients, and it helps you connect with other firm leaders who’ve faced similar challenges. On the technical side, your network can provide second opinions and additional expertise when dealing with complex client issues.

3. Hire Smartly, And Probably More Senior Than You Think:

Consider hiring someone more senior than you initially think you need. An experienced manager can take ownership of client relationships and oversee preparation work with minimal oversight. This strategic hire can free you up to focus on growing your business. If you decide to hire too many junior people to keep your costs low, you’ll often find yourself drowned in client work and interactions leaving yourself no further ahead than become partner at a traditional firm.

Final Thoughts

Starting your own accounting firm is a bold move, but it’s one that offers incredible rewards for those willing to take the leap. Whether you're driven by a desire for more control, better work-life balance, or simply a new challenge, the opportunities are out there.

Starting a new firm is also not for everyone, and many people are more suited for the more traditional route. That’s totally okay as well and many people find fulfillment working in a Big 4 or top regional firm as well.

A little something for my Canadian Readers

I recently partnered with Minted Search Group to create an awesome Canadian salary guide. The guide covers salaries at all levels and is based on the data collected by Big 4 Transparency. Minted Search Group provided their own expertise to share a description of what is expected at each level. Check out the guide here.