Accounting services are essential to every business, it is difficult for any business to operate without the help of a professional accountant or bookkeeper. Accountants play a role in bookkeeping, auditing, tax preparation services and organizing of financial related information for businesses and individuals of all types. This is a guide on how to start an accounting firm in South Africa.
Starting an accounting firm or bookkeeping business is actually not that different to starting any other business. If you are going to start this business solo then you will need to have all the relevant papers and accreditation with you. If not then you will need to hire or partner with people who have all the necessary requirements.
Business operations of an accounting firm
These are some of the start-up and ongoing costs that you will have to bear if you want to run this business.
1. Operating premises
You will need to have an office or a professional working space for your business. It is not uncommon to see accountants work from their home but getting professional operating premises will work well for your business. With that being said; things are changing and evolving, there are some accountants that work completely online as freelancers. These accountants never have to meet their clients, so they don’t have to rent an office.
2. Utilities
These are trivial expenses your business will have to pay every month, these are things like electricity, water, and stationery. Including your coffee, how much coffee will you buy? It’s important to think of these when costs for your business when you are still at the planning stage.
3. Equipment
Equipment will include things like desks and computers and software. A lot of your equipment costs might depend on how many employees you have, will you hire a receptionist? Then add all the relevant equipment your receptionist might need.
4. Salaries
It’s difficult to not hire anyone, especially if you are renting an office space, you will at least need someone to clean the premises. It might be very difficult to hire a receptionist when you are starting out, but it’s very important to get someone who will clean your working space. If you can’t afford to hire someone full-time then you can get them to work part-time.
Marketing your accounting firm
This is where most entrepreneurs struggle, you will need to spend a lot of money on marketing. Here is a guide on how to go about business marketing, there are multiple ways to market your business. Research shows that a lot of people who have just opened up a business don’t invest much into marketing, yet it is the most essential part. Marketing is the bridge between you and getting clients; I highly recommend doing digital marketing, you will get a lot of value for your money.
Setup a website
Get a professional web designer to design a website for you, here is an example of what you should get. A website like that costs only R1 200 when getting it from Promta, it is not a high price to pay for your business. A website just helps with establishing credibility with your potential clients, if used correctly it can bring a lot of value to your business. A lot of entrepreneurs don’t know how to use their websites effectively. They treat a website as some form of portfolio but it is much more than that, businesses that invest on their web presence get 60% more clients on average that businesses that don’t.
The biggest investment any business can make that will bring leads in the future is Search Engine Optimization. SEO is basically optimizing your website to rank and appear on Google for relevant searches. There is a high chance that you came to this article through Google or Bing. The disadvantage to SEO is that it can take time, a really long time, it can take anywhere between 8 and 18 months before your start seeing results. But it is always worth it, a lot of entrepreneurs just aren’t that patient. Your goal for your accounting firm should be getting 5 000 organic (free) visitors from Google or Bing each month. This website gets hundreds of thousands, but getting 5 000 visitors for a small website is more realistic.
Those are 5 000 leads; those are 5 000 potential clients. A good SEO campaign will only bring you people that are interested in your field, people that might be your customers. The average lead conversion is around 3%, this means that you will likely convert only 3% of your leads. In this case it works out to be 150 people, even if you perform well below average and only convert 1% of your traffic, you will still get 50 clients. You will get 50 – 150 clients for free every month.
Digital marketing
You can run both Facebook ads and Google ads, for an accounting firm it’s better to run the latter. Google ads perform better but they are still very expensive compared to ads for other types of businesses. Google might charge you more than R50 per click, but this can be worth it, the nice thing about Google ads is that you generally get people who are prepared to buy your services. If for example, someone searches “accounting firms in Vereeniging”, that person is likely looking to work with accounting firms, some may just be doing research but there is a very high intent on the searcher.
Contrast this with Facebook ads, Facebook ads are cheaper but don’t have a high user intent, a person doesn’t login to Facebook with a credit card on their hand. You might get more people from Facebook and the law averages says that some of them will turn to your clients, Facebook has a lead conversion rate of 9%! That’s a lot, a lot more than the average 3%. Here is a guide to Facebook advertising in South Africa.
Conclusion
This was a brief guide into how to start an accounting or bookkeeping firm in South Africa. Some things like the necessary accounting software use and accounting bodies to join were not explored in detail because this content assumes that you are already an accountant or bookkeeper, you should know those things. Come up with a marketing strategy and you will do well, it will be difficult for you to succeed without the right marketing.
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