The rate charged varies from one service provider to another with often little relationship between the client charge and the hours actually done for the client. Especially in the first year where you are still getting used to the clients record keeping (or in many cases lack of it).

The rate that you can charge is often dictated by what the clients that you can attract believe that they can afford.

You will see some clients who see you as a pure overhead and hence look for the cheapest possible option whilst other look at you as a benefit to their business and are willing to pay that little more.

Now, bear in mind that the latter variant there is also more likely to opt for an accountant than a bookkeeper as they are unliekly to have the funds to afford both.

You will find a lot of competition in the market and you will also find that accountants do not want to talk to you via cold calling. The ONLY ways to get close to accountants are via networking or via clients who also have an accountant.

Lets assume that the bulk of your clients are small one man bands of varying sizes who would be happy to pay in the region of £30 to £60 pcm for you to look after their books.

What are your overheads excluding start up fixed costs? (Software/insurances/Memberships/licences/advertising/etc.). Lets say something around £900 (£75 pcm).

So to make £575 (lets round that up to £600 for simplicity and to give a buffer) you need sometwhere between 10 and 20 micro clients.

Now, with luck, skill and dedication thats quite doable within a year but you will not get that number of clients from day one.

Do you have any start up clients to at least cover your costs?

Do you have the time available to handle twenty clients a month in your spare time?

What happens if a client has an emergency such as an impromptu inspection?

How will you attract the clients over your more established competition?

Do you have the reserves not to be taking £600 a month? (i.e. are you in any way dependant upon that extra £500?).

On a positive note you are at least in the South East which is possibly the best area for businesses at the moment (I have a couple down in Kent myself).

The best time to attract new clients is the run up to self assessment where the self employed have the sudden realisation that they are likely to be fined if they don't pull their fingers out. These clients generall require a lot of work to sort out but are likely to stick with you if you do a good job for them.

Word will also spread amongst their freinds about what you did for them and that as well helps to secure new clients.

If you don't save them from a fine though its a double edged sword as they will want compensating for your failing.

Will your PII company recognise that you are experienced enough at filing self assesments as an agent to compensate you in the event of an issue?

Its often assumed that having PII alone is sufficient safety net to take risks but the PII companies are nt fools and there will always be a line in the policy stating that you will only perform work that you are qualified and experienced to perform. I'm not for one moment suggesting that you are not either, I'm just saying that PII alone cannot be depended on as a complete safety net in all instances.

What the above is eluding to is that when putting together your plan assume that everything will take longer than you expect, starting will be slower than you anticipate, competition will be more intense, rates will be lower and the hours will be longer.

The above said, imagine this as a snowball rolling down a hill with everything being slow and difficult to start as you build your reputation in the local community and then as time progresses it becomes much easier as faster and faster you grow in size.

As a footnote, once you are used to VT you will not regard it as an economy option because your budget does not run to Sage but rather the software that you would have chosen regardless of its price compared to Sage.

I wish you the very best with your new venture. Don't let anything written above deter you but just consider it as you develop your plan as its too easy to look at a new venture through rose tinted glasses building assumptions that cause issue further down the line.

kindest regards,

Shaun.

Shaun,

Awesome - I have considered most of what you have said, and I know that it will be a slow to start with. I have two clients (a self employed Sparky and Plasterer) currently in my line of work who do their trade in the spear time/time off due to our shift patens and therefore don't have the time to do the book work themselves - There is another 100 or so in my line of work who have a trade and doing it on the side in my county alone so have a lot of client potential. Therefore I want to do a good job for them and let them spread the word for me - But don't want to seam to expensive or under sell myself. I will have anything up to 90hrs a month spear which would still give me days/time off. And I was looking at client base of 15 to 20 clients so I wasn't far of the mark which is reassuring.

I have also been recommended to my local chamber of commerce for small businesses which is a great networking opportunity - The cold calling / referral fee was an idea which I wanted to sound out amongst those "In the know" to see if it was a worth while option.

The cash generated from this venture is not to be used / relied on as an income, I see it more like a holiday fund / rainy day fund.

Your advice has been greatly received and will be disgusted, I hope to share my experiences good and bad as I go.

Thanks again Tippers