How to Start a Successful Bookkeeping Business in 2025 (Brick & Mortar and Virtual)

You’ve decided to open a bookkeeping business, but you might be wondering how to get started. In this article, we’ll outline the steps to build your business so you can get up and running and build a full client roster.

But first, there is one action to take before you do anything else.

Naturally, getting paying customers is the most important part of starting any business, and this is also true for your own bookkeeping business. Getting your first client means you’ll have someone who can back your claims of offering high-quality and cost-effective services.

While the steps outlined below need to be completed at some point as you establish your business, getting your first bookkeeping client should be the first thing you do. This way, you’ll be growing your reputation alongside building your business. 

(Note: You don’t need to complete the steps below in this order)

15 Steps to Start a Successful Bookkeeping Business

1. Choose Your Target Market

First, narrow down your target market and the types of clients you plan to serve. Doing so helps guide the rest of the setup process and how you plan to operate your business. It informs which bookkeeping services you offer and how to market yourself. 

Virtual bookkeeping firms have the benefit of being able to work with anyone regardless of their location. But do you have a specialty? Are you knowledgeable about specific types of businesses?

Here are a few things to consider when selecting your target market: 

• What’s your area(s) of expertise?
• What are your existing skills?
• What are the demographics of your local market?
• What are the growth prospects of your desired market?
• What types of clients do you enjoy working with?  

Limiting who you work with by niching down may sound counterintuitive when launching your business. However, it allows you to hone your skills in your area of expertise and focus your attention on the clients you’d like to serve. 

Over time, you also build credibility with that specific type of client and distinguish your bookkeeping business from others in your area.

Plus, by becoming an expert in a particular area, you will complete your work more efficiently – which frees up time for you to work on getting more clients. 

Sometimes niches are created organically. If your current clients start referring you to other businesses in the same industry, you might end up in an unexpected niche 

2. Establish Your Company

You should figure out the business structure you want to create. Many bookkeepers start as sole proprietorships, meaning you work alone and provide all the services yourself. But you may also think about forming a limited liability company (LLC) or corporation.

The ideal business entity type for your bookkeeping services will depend on your long-term goals and revenue expectations. Each state also has different rules for business taxes, so you’ll need to consider how state taxes would apply to your business.

Among the many benefits of forming an LLC is that it establishes your business as a separate legal entity and offers liability protection for your personal assets. 

As a result, if your business makes an error for a bookkeeping client or is found liable for some wrongdoing, creditors can only target your business assets. 

Plus, the LLC membership and management structure is flexible, so it’s easy to scale and add employees or new members as your business grows. Operating as an LLC may give your business more credibility with prospective clients than a sole proprietorship or partnership. 

To make your bookkeeping business an LLC, these are the essential steps to complete: 

• Choose the state where you’ll form your LLC, which doesn’t necessarily need to be the state where you do business
• Select a name and registered agent for your LLC
• Create an LLC operating agreement
• File LLC formation documents with the proper Secretary of State’s office

If you are starting the company with a partner, make sure a partnership agreement is part of your business plan. This agreement ensures you are both on the same page concerning business operations.

Lastly, part of this process is picking a business name, which you should do with care. You’ll be using the name for years, so be sure it’s a professional and accurate description of your work.

3. Get the Necessary Licenses and Permits

On top of forming your LLC, partnership, or sole proprietorship, there’s some additional administrative paperwork to handle before opening your doors. This step can be tedious, but ensuring you’re operating as a legitimate business is vital. 

Permit and licensing requirements vary by state and locality. 

If you’ve established a corporation or LLC, the entity needs to get registered with your state. Sole proprietorships do not require formation filings, though they often require business licenses.

Once you’ve formed your entity, you must apply for an employee identification number (EIN) with the Internal Revenue Service (IRS). The EIN identifies your business and is separate from your social security number (SSN). An EIN is optional for sole proprietors, but it allows you to receive 1099s at the end of the year from your clients without giving them your SSN. 

You are required to register for a business permit in most locations. Fees vary from a few dollars to a percentage of revenue, depending on your business location. You should consider the licensing fees when deciding where to locate your bookkeeping business.

If you plan on operating under a fictitious business name or several different names, you may need to file a “Doing Business As” (DBA) statement. DBAs can usually be filed with your county or parish.

You should also set up a business bank account to separate your personal and business finances. The bank you use for your personal accounts may offer business banking services. 

Consider shopping around to see which bank offers better options to support your operations, like business credit cards or small business loans.

4. Get Insurance

Business insurance will protect you from claims against your business, but you need the correct types of insurance policies. 

One of the most critical steps to take in your bookkeeping business is to invest in professional liability insurance, also known as errors and omissions (E&O) insurance. This insurance will cover you against claims you made a mistake in preparing a client’s books. The amount of coverage you need will depend on your client list. 

Professional liability insurance will protect you against errors, negligence, and omissions that may occur during your bookkeeping engagements. Your premiums will vary depending on what type of services you offer and your projected revenue. 

For a bookkeeping business just beginning, an insurance policy costs less than your daily cup of coffee. You should request quotes from several agencies to ensure you get a good deal.

You should also consider health insurance as an added expense, especially if you previously had health insurance through your employer. Replacing employer-sponsored coverage can be one of the most expensive costs of going into business for yourself. 

Many states require residents to have some level of health insurance coverage. Health insurance is a much sought-after benefit if you plan to hire employees. If your virtual bookkeeping firm has employees in several states, you may want to work with an insurance agent to find coverage that works for all your employees.

5. Decide Where You’ll Set Up Shop

Where will you run your day-to-day operations? 

A home office could keep start-up costs low. When you need to meet with clients, you can choose a setting you both prefer, such as a virtual meeting or at their place of business. 

If you’d prefer not to work from home, consider sharing an office with other professional service providers or coworking spaces. 

As you expand and add more employees, you could hire remote workers or find a workplace with room to accommodate your growing team. 

Initially, where you decide to run your business will likely depend on the startup costs you’re willing to invest. If you’re bootstrapping operations and want to invest more in your client acquisition and software programs, maybe a home office is the safest bet.

Once you begin onboarding clients and generating cash flow, you can reassess your working situation to determine whether renting another type of office is affordable. 

6. Create a Web Presence

Websites are essential for both virtual and brick & mortar bookkeeping firms. Without a website, your business may appear to be fly-by-night. 

You do not need an expansive or expensive website to get started. You can create a simple website for less than $50, including the domain name. If you don’t have experience, you can find many predesigned websites online or have one put together for less than $500.

Building an online presence offers several benefits as your bookkeeping business grows. It lets you showcase your expertise and can be a great source of client acquisition. 

This step ties into your overall marketing strategy. 

You can use your presence in online communities or social media to generate interest in your firm and connect with potential leads in your target market.  

Meryl Johnston drove this point home during her interview on our podcast. She explains how being part of several paid communities and Facebook groups helped her expand her network and grow her client base significantly. 

Try joining groups within your target market and with other business owners in your field. 

Actively participate in these communities; interact with and educate others to build genuine relationships.

Instead of immediately offering your services, focus on relationship-building because that’s how you convert contacts into clients over time. 

Extra: Building your accounting or bookkeeping firm remotely or have remote employees? Download our Definitive Guide to Remote Work for Accounting to ramp up the success of your remote firm.

7. Get Equipment

Today, starting a bookkeeping business doesn’t require ordering a bunch of office supplies – especially if you’re going virtual. 

But that doesn’t mean that there aren’t any startup costs. You will need a complete office setup, including a good scanner and possibly a printer. You’ll also need a reliable internet connection and a computer that can run accounting software quickly. 

Virtual bookkeepers juggle several files constantly. Having multiple monitors is key to working efficiently. You should also consider a reputable webcam and headset for client meetings. Sign up for meeting software such as Zoom or Teams.

8. Get Bookkeeping and Business Software

Before you start on client work, be sure you have the proper bookkeeping and business software to help you manage your client-facing and back-office tasks effectively. 

First, your business needs bookkeeping software like QuickBooks Online or Xero to manage clients’ books. Both are popular options for small and large businesses, though plenty of alternatives are available. 

Also, consider a workflow management system like Jetpack Workflow. The right workflow management system can save you hours and allow you to monitor your team without micromanaging it.

When overseeing a team, this can be especially beneficial since it gives you visibility over what each team member is working on and what still needs to be done before a deadline arrives. 

Consider other software options like an invoicing app to make client billing easier or a file-sharing app to collect and manage client documents and e-signatures. 

And as your client roster grows, a dedicated customer relationship management (CRM) tool could help you manage client relationships and nurture prospects to keep your pipeline full.

9. Standardize Your Workflow Processes 

Client bookkeeping typically requires completing recurring workflows and tasks. Standardizing these processes with custom templates can help you be more efficient. 

It lets you spend less time on tedious and repetitive administrative tasks and focus your energy on billable client work. 

Building your own custom workflows and process templates is very time-consuming. 

Instead, check out our 32 free pre-made accounting workflow templates for standard bookkeeping projects and tasks to keep you organized and on track. 

10. Set Pricing

One of the first questions potential clients will ask is about your prices. You need to be ready to answer! Start by deciding how you are going to price your services. 

If you got into virtual bookkeeping for the freedom and flexibility, you might want to work off retainers, but you also have the option to bill hourly. You should consider the following questions when picking a billing method.

Do You Want to Track Your Time?

Billing hourly has been standard practice in the bookkeeping industry for decades. It can be a very profitable way to bill your clients. But there is a downside: You need to track how all your time is spent. 

There is also no reward for working efficiently since fewer hours means less billing. As a virtual bookkeeping firm, you’ll need to determine a reasonable rate for your clients, even if they’re located in other areas.

How Will You Handle Scope Creep for Fixed Payment Clients?

If you’d prefer not to bill hourly, you can set a fixed fee or retainer bill for each client. This method rewards you for working efficiently as long as you’re getting the work done. When you finish your work, you can stop for the day or focus on getting more clients.

The tricky aspect of this type of pricing is that it’s easy for the scope to expand. You need an engagement letter with your clients that clearly states any request outside the scope of your work comes at an additional cost. This way, your clients don’t monopolize your time.

Do You Have the Time to Bill Your Clients by Hourly Invoices Each Month?

Hourly billing is a lot of work. You need to review the hours billed to each client and invoice based on those hours. Make sure you have time to complete the invoicing each month if you decide to bill hourly. 

We spoke about bookkeeping pricing with Meryl Johnston, a chartered accountant and founder of the bookkeeping business Bean Ninjas, on our Growing Your Firm podcast. 

She shares how a recurring revenue approach can be a great model for earning predictable monthly revenue and keeping work levels consistent throughout the year. 

11. Track Your Expenses

Don’t forget to maintain your own books. It’s easy to get caught up in client work and neglect yours. Think of all you recommend to your clients and implement those same procedures for your business. 

Have an expense log ready, and track expenses paid through personal accounts. Set up separate accounts for your business, just like you’d want your clients to do. 

Keeping your books in good shape means you can spend more time working on your client files, especially at the end of the year when you’ll be extra busy!

12. Build Your Team

Most bookkeeping firms – especially virtual firms – start with the owner as the sole employee. But as your business grows, you’ll need more team members to support your clients. 

When you launch your business, be aware of people you meet who could add value as employees. Don’t limit yourself to only bookkeepers; you should consider adding administrative assistants or marketing specialists to your team. 

To preserve your time for expanding your business, think about how to outsource tasks to other team members. Outsourcing tasks might cost some money upfront but frees up time for running your business, working with your clients, and acquiring new ones. 

Don’t wait until the last minute to add a new team member. If you suspect you’re getting close to expanding, start looking! Give yourself time to find the right person and get them up to speed.

13. Advertise Yourself

Think about various ways you can reach out to potential clients or get your business in front of them. Every contact with a business owner is an opportunity to land a new client. 

Business cards are a bit old school, but they still work well when trying to land a new client. Cards are great for in-person meetings if you have a local client. 

For virtual bookkeeping companies, your focus should be on online advertising. You can use Facebook or Google Ads, but consider social media options such as TikTok, Instagram, Twitter, and Pinterest, which have also proven successful for some firms.

For more ideas, check out Jetpack Workflow’s suggestions on how to market your virtual bookkeeping business.

14. Network

Often, the first clients for a new business come from within your network. 

That’s because you’ve likely already built some level of trust with one another, so you don’t have to spend as much time and resources converting them into a client.

Josh Bauerle, founder of CPA on Fire, offers evergreen insights on his Growing Your Firm podcast episode on getting the initial clients for your new business. He attracted his earliest clients by tapping into his network of other business owners. 

When taking this approach, you don’t want to be too pushy and damage the professional relationships you’ve built. However, you can still assess who in your network falls in your target market and inform them about your new business and services. Based on their current needs, they can decide whether they’re interested. If they don’t need your services, they may know of someone else who does and refer them to you. 

Once you’ve onboarded your initial clients, we have an in-depth guide with helpful tips on getting more clients for your business.

Credentials can also help you advertise your business. You should consider joining the American Institute of Professional Bookkeepers (AIPB) or the National Association of Certified Public Bookkeepers (NACPB).

15. Enjoy Your Success… But Keep Hustling

Get excited about your first client, then get back out there and find more. Keep your long-term goals in mind, and keep working towards them. Having a five- or ten-year plan allows you to track your progress and make adjustments along the way.

Keep looking at what’s working and what’s not. Check in with your team, and evaluate your software. Watch out for trends and new opportunities.

Be proud of your success, but keep moving forward!