How to Start an Accounting Firm and Bank 6-Figures Your First Year

Recast Episode: This episode was originally published on September 27, 2018, but it’s a favorite among our Growing Your Firm Podcast community, so we’re bringing it back. Tag us in social to tell us if you’ve been listening to the podcast since the original airing of this episode.

Hannah Stricker always wanted to be her own boss after 25 years in the accounting field. Finally, she gave her notice and went off to start an accounting firm from scratch.

WIthin 12 months, she had banked 6-figures in revenues and she’s ready to show how she did it.

Summary

  • What services she offered as a 1-person firm
  • The steps to pricing that generate up to 85% profit
  • How to start an accounting firm with zero clients
  • Special Update From Hannah

Resources

Breaking Through the Fear and Starting an Accounting Firm

Hannah Stricker, Founder of Bookkeeping Solutions of Traverse City, knew she didn’t want to work under the overlords forever. For 25 years, she toiled in major accounting firms and a decade in the local sector. But, her destiny was CEO of her own accounting firm, and she needed to make it happen.

“It’s a scary leap,” she said, and you can’t blame her. Casting out to the unknown shouldn’t be taken lightly. For two years, she thought about making the jump. At her local firm, it was a cushy job with benefits and a near 6-figure salary. She loved her colleagues, her clients, the work, her pay. All she was missing was the sweet taste of entrepreneurship.

Finally, in September 2017, she started her own firm. Before she left, she had 6 months of savings set aside. So, even if she didn’t make a dime for 180 days, she’d be okay. Because after 4 months, she would know if it would work. If it didn’t, she had two months to try and find a new job. On top of that, she saved $12,000 for office supplies, software, a computer; basically everything she’d need for an office space.

Her first few months were nerve-wracking. But, once she covered her mortgage and bills, she settled in. By her first anniversary, she had made $70,000 in profit and paid herself a salary of $35,000 (giving her revenues over 6-figures). Her 5-year goal was to have profits of $150,000 with up to $60,000 in salary. However, due to some new clients, she may hit that by the end of her second year!

Update: Not only did she meet her 5-year goal; she beat it within her first three years!

The growth is impeccable, and here’s how she organized her services.

Services to Offer as a New Accounting Firm

When starting an accounting firm, it’s important to know full-well what services you’re going to offer. That allows you to market yourself the right way. Hannah’s bread-and-butter were accounting and write-up services.

The key to finding what services are best for each client is by setting up a 4-hour meeting when you first meet them. That sounds daunting, but blocking out this time allows you to be thorough as well as not worry about other appointments.

To make the meetings most productive, Hannah has the prospect bring in at least one full bank statement and access to their Quickbooks. From there, she’s able to determine what services would best help them. She always pitched first with her accounting and write-up services, then built up from there.

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Pricing to Keep Clients Coming Back Again and Again

Hannah’s firm is modeled on a fixed fee engagement. It’s basically like a subscription to work with Hannah. And the monthly fees are all-inclusive:

  • Quickbooks review
  • Monthly statement production
  • Unlimited access for questions
  • Tax planning
  • Business tax return

With this, clients aren’t worried about the big bill coming in the mail. They know exactly what they’re paying and what they get.

Her price is based on how much Hannah estimates they will utilize her. This is a risk to estimate, but you can always raise the price later. She looks at their Quickbooks and bank statements to determine how deep she will be each month. The more she’s doing, the more she charges.

One client wants her to touch their books every business day. For that, Hannah charges $3,500/month. That’s cash rolling in each month like clockwork.

Normally, she’ll close 80% of prospects and rarely gets pushback on price. For the most part, prospects aren’t leaving their old firm because of price. It’s more due to service. That’s why Hannah will send gifts and notes to clients to show her appreciation.

However, if they do balk at your price, Hannah recommends a secret. She tells them all of the services that are excluded at the low rate. When she does that, the prospect realizes what they could be missing out on and typically agrees to the regular, higher price.

Push your service and how you will take care of them, and they’ll be a client for a while. And they won’t push back on fees.

How to Get New Clients when Starting an Accounting Firm from Scratch

Right now, Hannah doesn’t anticipate taking on new employees. She’s pretty happy with her client roster. Right now, she has around 19 clients. Her goal was to get to 20 so she’s right at that point. She’s also working the number of hours she wants and making good money.

That’s all because she’s adapted one of the most unusual, but effective, ways to bring in new clients.

Hannah does admit she’s been in her town for most of her life, so it does give her a leg-up, but don’t disregard what she’s about to reveal:

She volunteers, and that’s where most of her clients come from.

It’s pretty incredible; we hadn’t heard this before. She volunteers at her church (where many wealthy people attend charity events). She also volunteers for her local hockey teams (she loves hockey). She gets to meet people in the NHL and business owners tied to those owners. She estimates 14/19 clients came from volunteering her time.

Then, as you volunteer more, people recognize you around. They ask what you’re doing, and you tell them you’re in accounting. Suddenly, these people know someone who knows someone. It’s pure genius networking.

She’s used over 300 business cards because in town people are connecting with others.

Look around for a volunteer opportunity in your town. It might be the missing link for finding new clients.

Hannah says she’s growing faster than she thought, and it’s incredible to see.

Update From Hannah

Since we’re nearing the end of tax season, here’s a tip to keep in mind:

Don’t get so busy during tax season that you can’t talk to new potential clients.

This is the time of year where business owners are looking for help, switching accountants, tax compliance, etc. Don’t get so busy that you don’t have time for those potentials. Remember, clients generally switch accountants due to non-communication, so don’t give the impression right off the bat that you’re going to be just another non-communicative firm. Take the time, impress them immediately, and you can have a life-long client.

For more words of wisdom like these, listen to the full episode!

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