4 must-dos for new firm owners
Editor’s note: This article is the third in a series about starting or buying a firm. The first article is about entrepreneurial skills firm owners need for success, and the second is about financial aspects of firm ownership.
Almost two years after launching his practice, Fahmia Inc., Michael Fahmy, CPA, made his first official hire, taking on an accounting assistant to help with various tasks. Sadly, things didn’t go as planned.
“We didn’t have clear roles and responsibilities for that person, and they didn’t have an idea what they were supposed to do,” Fahmy admitted. After several months, the employee “got exhausted and made a run for it,” he said.
Fahmy, who was 22 years old when he founded his firm, learned plenty from that experience — namely, that he needed to give new hires clear direction. But it was only one of several challenges he faced early on. Among other things, new firm owners must also choose a location, create a business plan, and build a website to attract clients. (Review the AICPA Private Companies Practice Section planning checklist for more information on these and other aspects of launching a practice.)
Fahmy and other firm owners and experts discuss how they tackled these challenges and offer the following advice:
Choose your location wisely. Determine where you want to set up shop. Do you want an office in a commercial building? In your home? Your place of work should further your business.
“In general, better office space will help attract more affluent clients, larger businesses, and fewer fee-sensitive clients,” said Brannon Poe, author of On Your Own! How to Start Your Own CPA Firm, 2nd Edition, and founder of Poe Group Advisors, a Charleston, S.C.-based firm that helps CPAs sell their practices. The exterior visibility of your firm also can help in attracting higher-end clients and making a positive impression, he added.
“If you’re doing a brick-and-mortar you want to be centrally located so people can get to you,” advised Evan Hutcheson, CPA, who founded Nashville-based Evan Hutcheson, CPA, LLC, in 2012, at age 28. Hutcheson first rented an office for a low monthly cost. He has since moved twice and now rents space near downtown Nashville, in a commercial building designed as an old home. He advocates starting with a low overhead until your business increases.
Silicon Valley-based Ami Shah, CPA, launched her San José, Calif., firm in 2006 by renting an incubator cubicle in the building where, as she noted, Google and eBay got their start. The $250-per-month space came with a built-in receptionist, internet access, and conference rooms. “I wanted to have a professional space where clients could come by and meet me,” she said.
Fahmy hired a broker to find his ideal office in Torrance, Calif., close to many potential high-end clients. He lived about four blocks from the building, “so it was a perfect fit,” he said. Fahmy advocates hiring a broker to find a space, because “lease negotiations can be stressful,” he added.
Create a focused business plan. Business plans don’t have to be complicated, since they are simply a guideline for your eyes only. But these plans are necessary, as they help you jump-start, further, and manage your practice. (Visit the PCPS’s Creating a One Page Strategic Plan webpage for more ideas.)
“Start with your vision and then try to get tactical as to how you will achieve that vision,” Poe advised. “The plan helps you focus your efforts, and a lot of small practices don’t reach their potential because they lack focus.” For instance, he said, if you want to gain 100 clients in the first year, state that in your plan. From there, envision which types of clients you want, why they will use your services, and how you can successfully market to that audience.
Hutcheson advocates drafting a plan at the outset and adjusting it every six months, depending on your progress. He now serves about 200 clients, he said.
Build a website. One of the most valuable ways to promote your business is by creating a website that is not only attractive, but strategically smart. Many public accounting firm owners hire outside web designers, some specializing in professional services, to build sharp-looking sites. Shah hired a web designer early on and spent about $1,000 to build a sophisticated site, which included information about her background and the firm’s area of expertise, she said.
Fahmy initially tried to build his own website, but realized quickly he needed back-end coding to reach his target market. This coding is important because it can affect search-engine rankings. So he asked tech-savvy friends for tips and hired a firm to continue building and managing his site for about $100 a month. “I gave them the direction of where I wanted them to go and they took my lead,” he said.
Make intelligent hires. Hiring and retaining employees can be a challenge for any small business, so take this task seriously. If you find yourself getting overscheduled, it may be time to hire some help. But be sure you’re properly capitalized to handle payroll, Poe advised. Find an employee who not only can get the work done, but who is a good fit for you and your clients.
Hutcheson, who has two employees, finds potential hires via referrals and websites like Upwork.
“Do not hire someone just because they are a friend of a friend. You would still need to do your due diligence,” he said. “Make sure they flow with your future vision, because if they don’t, eventually stuff will go the wrong way.”
In addition, Fahmy said, create a contract that requires a 30- to 60-day notice if workers should exit. This can give you time to prepare if they leave during tax season. And, he advised, “have clear, defined responsibilities for the employees.” (Visit the PCPS Human Capital Center for resources that can help you hire and manage employees.)
Cheryl Meyer is a California-based freelance writer. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.
Research & References of 4 must-dos for new firm owners|A&C Accounting And Tax Services
Source
0 Comments