How to Start & Open Your Own Bookkeeping Business
Recast Episode: This episode was originally published on July 14, 2016, but it’s a favorite among our Growing Your Firm Podcast community, so we’re bringing it back. Comment below to tell us if you’ve been listening to the podcast since the original airing of this episode.
- Starting MCJ
- Why Recurring Revenue Is So Important
- Bean Ninjas & MCJ: What’s the Difference?
- How to Grow Your Client Base Quickly
- Find a Community and Be Active
- Content Creation as a Means of Adding Value
- Quick Insights Into the 7-day Start-up
- Bean Ninja
- Meryl Johnston – LinkedIn
- Dan Norris (7 Day Startup)
- Innovative Accountants & Bookkeepers Facebook Group
- Jetpack Workflow interview with Edward Mendlowitz
Meet Meryl Johnston
Meryl is a Chartered Accountant who worked in commercial accounting roles and as an auditor and lecturer before a friend and fellow entrepreneur playfully challenged her to redefine the future of bookkeeping. Seven days and a thousand dollars later, Bean Ninjas was born and has since gone from strength-to-strength. Along with Bean Ninjas, Meryl also runs her own consulting business, MCJ Consulting, where she helps implement cloud accounting into businesses who need to make the transition.
Meryl had been working in commercial accounting roles and as an auditor and lecturer. She was tired of working late nights and weekends really no matter what she did. So, she started MCJ Consulting to help meet the needs of her lifestyle. “The first year after starting MCJ was great,” Meryl said. “Lots of surfing and fun projects, but then I wanted to scale up MCJ.”
In her line of work, she did a lot of project management type projects. For example, she would work with a company that had acquired a new payroll software and Meryl would help ensure that it integrated with the rest of the financial systems and then train the rest of the staff to use it properly. So, it was hard finding the right staff due to the varied nature of the projects that she did. Meryl visited India to see if she could outsource some of the back office work. She built a small team of dedicated professionals there in India and got started on a recurring revenue/subscription-based business.
She would take on clients one at a time, and the onboarding consultation process could take time in order to get those clients switched over to the Cloud-based tools, Xero and other add-ons, that she was using. Then, she would have her back office team doing the monthly reporting. But that would take several months to get clients from the onboarding stage to the point where the team was processing their reports.
Why is Recurring Revenue so Important?
Meryl says that prior to switching over to a recurring revenue approach, “Cashflow was unpredictable. It was hard to manage the sales pipeline—finishing up one project and already having another one lined up and ready to go.” So, from a cash flow perspective, recurring revenue services were more predictable, and it also meant more consistent work for our staff.
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While MCJ is a consulting agency, Bean Ninjas is a bookkeeping business. Meryl and Ben met in an online mastermind group, not even dedicated to accountants specifically. Both of them had been following Dan Norris’ “7-day Start-up” movement, which proposed that you could start and launch your own business in just 7 days and be successful. That drew Meryl and Ben in.
When Meryl started MCJ, she didn’t have a business partner and really wasn’t expecting to have one. Meryl’s parents ran an engineering business and one of the first pieces of business advice that her father gave her was to never have a business partner. However, she has been very glad to have had Ben as a co-founder. They had similar dreams, skills, and visions, and were far-better-off together.
“Ben and I had only met face-to-face once, but we had been working together for some months prior.”
They shared some clients and worked together on some of their projects, so they knew how well they worked together. They also took the time to have the difficult and detailed conversations ahead of time and signed a co-founders’ agreement.
Bean Ninjas launched in 2015. Though Meryl and her business partner, Ben Mcadam, are accountants, they decided that bookkeeping is a repeatable process that they could train their people to do.
How to Grow Your Client Base Quickly
In their first six months, Bean Ninjas had 15 clients, but over the next four months, they gained nearly 40 clients. In the first 10 months of operation, they gained more than a client per week. What was going on in those last four months that helped their client base grow that much?
A large portion of their work was coming in by word of mouth referrals. It takes awhile to build the kind of trust that’s needed to earn recommendations like that. Most of their client work comes from online communities, which is their target market. Meryl spends quite a bit of time trying to add value to those communities. The best thing you can do when you’re trying to build your client base is to think about how you can add value to your community.
For example, Meryl would see people in her online community asking for feedback on the new website they had built. She would visit their website, take a good look at it, and give them feedback on what worked and what needed improvement from her perspective. Similarly, if someone posted their new book online and asked for reviews, she’d read it and then tell them both what she loved about it and the things that could be improved.
Find a Community and Be Active
Where does Meryl find the most valuable, lively communities? She says that she’s part of several paid communities. One is a Facebook group—Dan Norris’ 7-day Start-up Program, and another is called the Dynamite Circle—where she met Ben. She’s also part of several Facebook pages for bookkeepers and accountants. She isn’t an idle participant either. She is extremely active, dedicating an hour per day just to corresponding with these groups. She has also started her own group that’s focused on bringing accountants and bookkeeping professionals together.
What’s important about these groups is that she didn’t just join and immediately start talking about her product. She joined and took the time to build relationships. Building client bases takes time, because you have to build individual relationships first. Cold calling? Door-to-door knocking? Cold emails? Those just didn’t work for Meryl. She just focused on building relationships, one conversation at a time.
Content Creation as a Means of Adding Value
One of the ways you can add value to your community is by providing desirable content. Meryl does this by writing articles/blog posts. Her typical process involves ideating and using Trello in order to keep a log of her blog ideas. If you’re interested in content marketing, the first thing to do is create a content strategy for what you’ll be writing. For Meryl, her strategy/focus is either educating others concerning accounting and bookkeeping or general business growth.
One of the most successful pieces of content Meryl puts out is Bean Ninjas’ Business Report, in which they report how well the business is performing. The report details their recurring revenue, churn rate, customer satisfaction rating, etc. The report is an honest and transparent assessment of what’s going well and what isn’t.
Quick Insights Into the 7-day Start-up
- Let your pricing evolve as you learn more about your clients’ needs.
- Try to create what you’re doing in a way that’s interesting (i.e., starting in 7 days, reaching $100K in recurring revenue in 8 months, etc.)
- Start documenting your processes now.
- Set up metrics connected to certain hiring triggers.
- Hire early!
We covered a ton of great information in the podcast. If you want to dive even deeper, be sure to check out the full episode! If you want to learn more about Meryl, her company, and the 7-day start-up, you can connect with her on LinkedIn!