I am in the process of re-taking i.c.b quailifcations after shelving starting a bookkeeping business a few years ago due to other commitments although i have had lots of bookkeeping / accounts experience.
Just wondering how many clients most people have, I would add that i'm looking to work from home for tradesmen type businesses and not work for a few businesses where i might do 1 or 2 days a week work at their premises, would feel too much like an employee.
Hi Newleaf As I am sure you realise, working as a sole practitioner bookkeeper is time limited, so first you probably need to work out how many hours each week or month you want to work on the business. This should include time for the fee earning work, non-fee earning client work and marketing and admin tasks. For each client, consider how much time you will spend chasing for paperwork, asking and resolving queries, training your client to prepare and provide paperwork in your preferred format and issuing invoices, as well as how many hours fee earning work it will generate. Then, consider how much time you want to spend on your a business admin - your own books, sorting out insurance, CPD, marketing (marketing hours will probably reduce as your client base grows). Collecting and delivery paperwork (if you intend to offer this|) is also worth considering - how much time do you want to spend on the road?
Lastly - think about the peaks and troughs. You will be busier as VAT deadline approach, and if you offer payroll you might be busier around month end/RTI time.
The more clients you have, the greater the number of letters of engagement, fee invoices, query lists and outstanding paperwork you will have. So a few of high volume regular clients, together with some low volume flexible clients is a nice mix.
So you probably want a mix of clients - some with larger batches of paperwork, some with smaller; differing VAT quarters; different update frequency - weekly/monthly/quarterly.
How many will depend on the volume of work.
It's unlikely you will be able to pick and choose your clients in this way to start with, but by setting out how you want your workload to "look" you can monitor your client base and your workload, and when you start to see a pattern emerging you can target specify markets to fill in the gaps.
__________________
Sheelagh Lyons Bookkeeping Clarity Making Bookkeeping Clearer
The answers I provide are meant as a general guide only and do not constitute advice.
Thanks for your detailed reply, i know it is a bit of a how long is a piece of string question. I'm lucky in one regard in that i am already self-employed and so don't need this to be my main income to start with and i can pick and choose when i work to fit in with my existing business. What i am trying to do before i set up is get an idea of what to aim for in terms of number of clients to build up to. I appreciate that there are many different variables and that doing the books for a retail business with five shops (i actually used to own five shops and did all the bookkeeping) will take considerably longer than the local window cleaner with a 100 clients. Whilst i aim initially to target the smaller one man band's which might not take me long to do i appreciate that i might need a fair few to earn a decent income and that i may have to take on larger businesses like you say to have a balanced mix of clients to achieve my ultimate goal of building up to a full time business.
If you are going self employed it is up to you. If you have no other commitments (work, children etc.) the average is around 30 clients, but you could take on 5 big ones, or 50 small ones. So really it is down to you to decide how much work you want and when you get to that level stop taking on clients, or hire staff/sub contractors.
You do not have to take on a client, if they require you to work at their premises and you don't want to do that then don't take on the work. Obviously you would be reducing your potential income and client base, but there should be plenty of small businesses that do not have premises and are happy for you to take the work away to complete at home.
The largest ICB practice has over 800 clients, so there is no real limit as long as you get good staff to help you with the work.
Out of interest the largest ICB member that has 800 clients, how many staff do they employ?
If you are in a situation like alot of people on her with children and can only really work school hours, whats the amount of clients that you reckon is fesable for them?
As mentioned in my other post the number of clients is not so important. You may find 1 client will take you 2 days work, so get a couple of those and that is all you have time for.
On the other hand a more straight forward client may only take a couple of hours a month, so you could have 10 or 20 of those to get the same income.
However, if I was to guess I would say between 10 and 15 clients would be the average for people with children.
You've been missed on the site. You're really going to have to stop all this success of the ICB getting in the way of forum time.
800 seems an awful lot. Is it a franchise rather than a traditional practice?
Also, would they be calling themselves bookkeepers or accountants? (I note from the video that 5% of ICB bookkeepers say that they are accountants.... Nope... pulling back... not... going... to... touch... that... debate...).
I would tend to agree that a kitchen table business with 10-15 stable clients seems to be many peoples ideal scenario especially where people have other commitments. But at half a day per month per client (being generous as many only need 1-2 hours per month) at £20 per hour (doubtful that you would get anywhere near that in my area but appreciate that going South (or North!) prices rise) then that at best is £14,400 per year before costs.
or £960 per client per year.
I find the average small client yield closer to £700 per client per year which would equate to a more realistic return of £10,500 on 15 clients.
There's not question in there, just a pointer for the poster to be thinking about the yield rather than concentrating on the number of clients divorced from the return per client.
As you indicated James. One or two larger clients may be much more lucrative than a couple of dozen micro businesses.
kind regards,
Shaun.
__________________
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.
Hi Shaun, yes sorry, must get my priorities in order
It is a large practice, we have quite a few with over 100 clients. Check out the ICB Practice of the Year 2012 finalists and winners http://www.bookkeepers.org.uk/News/1746 some of them have staff. The winner has 3 staff helping her, so I guess an average of 15 staff each and that is 60 clients.
It then enables the main person to concentrate on getting new business and meeting clients, which can lead to quite large growth by taking on staff as you grow.
I think a lot of practices refer to themselves as bookkeeping and accountancy, or something like that, because there are still people out there who think bookkeepers are just data inputters (not helped by a bookkeeping body giving membership and a practice licence to level 1 qualified students ).
The 5% who call themselves an accountant would be with ACCA, ICAEW etc. as ICB rules state they cannot do that unless they are with an accountants body. We know from that survey that (from memory) 4% of ICB members are also with ACCA.
I work on the principal it is not the number of clients you have but how much work is involved with each business as they can all be different. I have had 15 clients and was not as busy then as I am with only 9 now. It is useful to have some small quarterly clients to boost income and fall back on but at busy times there are not enough hours in the day.
.
