Hopefully it won't be long now until I set up my business. I can upgrade to AICB once I have passed my Level 2 (comp) and then do the Self Assessment module.
I've been thinking a lot about my target clients, the services I want to provide, pricing and the best way to advertise.
I've decided that I would like to concentrate on micro sole traders, offering year end accounts and self assessment. Probably using VT and hopefully getting my clients to use the free VT cashbook. About pricing, how does £200 sound for this?
The reason I think this could work is that for the very small business ie self employed electrician working from home etc do they really require the bookkeeping done on a monthly basis? Do they really need management accounts?
Do you think this is a viable business plan?
I don't have any practical bookkeeping experience and I think this really shows when I think about the practical side of running my business. For example the ICB course is fine for producing final accounts but what if a small company wants management accounts on a monthly basis? What information would they be looking for? A monthly profit & loss or cash flow statement?
Any comments on my plans or any tips on the practical day to day of running a bookkeeping business would be really appreciated. Also any comments on my pricing plan?
If you are are member of ICB can you prepare final accounts? I am sure have heard on here that you you can only do certain things. Maybe you can do final accounts for a sole trader/partnership and it is just a limited company that you cant do.
Price will really depend on how much work is involved in preparing accounts and doing the tax return. For example someone who uses VT cashbook and maintains accounts accurately and only has self employment income on their tax return you would expect would pay less than someone who gives you a bag of receipts to sort out their accounts and who also has a portfolio of shares which they actively buy and sell together with a couple of properties that they rent out. But as a mimimum a basic set of accounts and a basic tax return an amount of £200 seems reasonable.
Not many small businesses would want to pay to just have monthly management accounts prepared. They may expect you to do the bookkeeping and as part of that process to prepare management accounts. This could be either on a monthly, quarterly or 6 monthly basis. I would suggest giving them a profit and loss account for the period and balance sheet with commentary explaining the major points and recommendations to improve their performance. Also would expect to give them a detailed list of debtors and creditors.
can you hear the sound of a thousand accountants out there reading that about ICB members being able to do final accounts and grinding their teeth!
You're right. Once you reach a certain level there is nothing to stop you from doing final accounts.
As for it being a viable business plan there's a lot to factor in.
software licences, memberships, insurances, travel, a salary, etc. The more clients that you can get the lower the cost to return ratio and the more viable it becomes.
My plan for the bank came in at 53 pages including sensitivity analysis, SWOT Analysis, Porters five forces analysis, the marketing mix, full ten year cashflow forecast, etc. and still at the end of the day at best it's just guesswork based on variables set in quicksand.
Good luck with the business. Once you've got the first few clients it will seem a lot less daunting.
Always remember that everyone here has been where you are and there a lot of success stories on this site.
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
That's great, a wee bit of encouragement goes a long way. Hope I can master VT transactions I think this would be best for the type of work I want to do.
