I am interested in buying a bookkeeping franchise that uses Sage 50 Accounts - does anyone know if there is a high demand for Sage bookkeepers from accountants in practice who need to outsource some of their bookkeeping/VAT work?
Wouldnt buy a bookkeeping franchise for say anything from £5k to £20k as there is no guarantee you will get any business.
Better just set yourself up on your own and go forward from there.
Re whether accountants need to outsource their bookkeeping work will all dependent on factors such as; where you are based, what your expertise in SAGE is, what your proposed charge rate is.
After all if you dont add anything other than say processing the invoices and squaring the bank and doing VAT return and charge say £15 per hour what is the incentive for the accountant to outsource the work if they have an accounts assistant who could do the same and their salary is say £10 per hour.
Why not before you do anything contact all the accountants within say a 30 mile radius of where you intend to work from and see what their interest is in outsourcing the work.
Other option is to by pass the accountant and offer your services straight to the client.
Thanks very much for your reply. I've contacted a lot of accountants in my area, & they say that they do not have the extra work at the moment, but that they will keep me on file. I did wonder if I had the backing of a franchise, if they would view it differently (maybe more reliable/less chance of making errors)?
I know what you mean about the cost of a franchise, but the help with marketing might be the boost I need. The franchise I am considering charges by the transaction so the fees are very clear, & accountants in practice would still get a decent mark-up.
It's a big step to take, & I appreciate any other viewpoints either for or against.
sorry, skipped by this one first time around as it had Sage in the title and I don't tend to answer those one's (not a big Sage fan myself).
For the last couple of years there has been more of a tendency by accountants to bring work back in house in order to keep staff employed rather than outsourcing the work.
Since the change of government there have been more people setting up their own businesses often on a shoestring and that seems to be the market where bookkeepers rather than accountants are winning out.
There is still work sub contracted from accountants but not in the volumes that it has been in the past and also the rates that accountants are willing to pass on for such work reflects the price squeeze that they are also having to endure.
At the moment if an accountant was willing to pass me a client I would suspect that there was something amiss with the client that the accountant didn't want to be bothered with them (normally too much work for too little potential return).
Personally I feel that whilst it might be good to pic some work up in this way I would not build my business plan on it as the volume does not exist to use that as your primary option.
Certainly I would not contemplate high investment level franchises.
Have a look at the Crunchers business model which has an option to be a franchisee without up front fee's.
Bob Harper is very much geared towards maximising the return to franchisee's so if this is the road that you wish to travel have a word with him.
kind regards,
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 really interesting advice, thank you. I will have a look at the Crunchers website, & maybe target my marketing efforts at sole traders/practitioners who want to keep their costs low.
I'm also trying to decide on a 'market niche' - marketing doesn't come naturally to me, so if I can narrow down my target market it might seem less daunting!
If you are determined to go down the franchise route you will need to be prepared to lose a lot of control of your business. Personally I would never be happy with someone telling me exactly how to attract customers, how to deal with them, how to charge them and then taking a cut for my troubles.
Yes, there are a lot of franchises out there which work, but I think if you are in any way entrepreneurial you might soon begin to feel suffocated. My other big concern is what if someone else damages the brand. Let me explain my thoughts, right now I am the only person who can make or break my brand, but as a franchisee you are sharing the brand with other franchisees throughout the country, what if one ends up in the papers for the wrong reasons, or starts upsetting customers? Bad news travels.
Not wishing to dampen your spirits but just taking a view from the other side........
I run my own accounting practice and have had a few letters from bookkeepers asking if I ooutsource and, obviously, the nice reply is that I will keep them on file. To be honest, the letters, once responded to, generally end up in the shredder.
The problem for accountants (being generalistic but in my experience) is that they are reluctant to outsource the bookkeeping for several reasons; one is the potential that they could lose a client and in this economy, no-one wants that. Also, by keeping the bookkeeping in-house, it speeds up time to be able to draw up management accounts, financial accounts, analysis reports etc. and these added value services bring more money in; last thing we need is a delay while the paperwork is with the bookkeeper.
Having said that though, I do know of some bookkeepers who are doing quite well, so persevere and good luck.
I've picked up clients via accountants in one area and have had no success in that field in another area. By area I mean geographical ones. WHen I was based in Somerset/Devon and just starting out I did a mailshot out to local accountants and got a fantastic response and some very good clients.
When I did the same thing in my new area (Gloucester) I received nothing but "thanks but no thanks" type responses. Perhaps this is one thing that has a geographical dependency. My mailshot letter emphasised my reliability, friendliness and that I was local, which seemed to appeal to the country accountants much more than it did to those in GLoucester.
I do understand where you are coming from with not wanting to do your own marketing and having the help of a franchise but to be honest with the up front costs being as they are (not Crunchers but most others) I wouldn't consider that route. There is also Kris' very valid point above about being dependent on others for the image of your business.
A good bookkeeper will not need to do a huge amount of marketing once up and running so although the franchise route can help in the beginning do you need to be paying someone else a proportion of your income for ever more when you don't really need those marketing services?
On the whole though I think it unlikley that you will pick up vast quantities of work from accountants for all the reasons given above.
