{Still} Thinking about a Business Idea

start a businessStarting up a side business is still definitely on my mind. As I mentioned last week I am considering offering accounting and tax services. I’ve spent a lot of time researching and working on a business plan. I think it would be challenging and rewarding to run my own business. I’ve always had the entrepreneurial itch. This would be a great way to combine my technical skills with my passion. Too fun!  I’ve had some significant realizations about starting a business. I’m still not sure if I will end up going for it. I’ve managed to roughly estimate the start-up costs and they are not terrible but there are a lot of other things to consider. Here’s what I’ve determined so far:

1) It’s all or nothing

Should I decide to start this business, I would need to form an LLC, obtain insurance and register with my state board of accountancy. Working as a CPA is no joke and it has risk. In my research I discovered that many self-employed CPA’s have liability insurance to protect themselves from existing and emerging exposure. I couldn’t really get an estimate for the actual cost of this insurance. I would probably have to call an insurance company to get an actual quote.

The CPA firm industry is regulated. Obviously I plan to comply with all the laws upfront. If I start this business I would need to register with my local start board of accountancy and comply with their rules and regulations as well. From what I can tell, compliance is going to be the largest start-up cost associated with this business. Not going to lie either – this process is intimidating!

2) Marketing 

I think I took one marketing class in undergrad and to be honest I am not sure how to do this whole marketing thing. From what I’ve gathered, most CPA’s get their business by word of mouth. They don’t seem to spend a lot in this area. However, as a newbie, I will need to do something my first year. I would definitely develop a nice website for starters. I’ve researched a few of the local firms around me and I’ve been shocked when I see their websites. A lot of them are very dated and don’t provide a lot of value in my opinion. Maybe that’s just not what they use to bring in customers? I don’t know but seriously, most of the websites I’ve seen are professional but they look like they haven’t been updated in 10+ years. Dated layouts, graphics and feel.

I know I will need to do something more than just a website. Some other suggestions I saw were place an ad in the newspaper, send out a local mailer and join your local chamber of commerce. I really wonder how difficult this is going to be to acquire new customers.

3) Will this conflict with my day job? 

This is an area that I need to explore more. I have no idea if my current employer has a policy for employees pursuing other interests? I don’t think it would be an issue per se, but I do sometimes wonder if they would have anything to say about it. Could I get in trouble for starting a business like this? Would I need to disclose this business venture to them? This will require further research on my part.

In addition, I wonder how much work I could take on before it would interfere with my day job? While I love the idea of self-employment, I am in no rush to get there. I have a good job, with good pay and benefits. I need to have a long-term plan of how to determine when that “right time” would be to leave my current job if that day ever came. That’s assuming my business is a major success and growing rapidly.  Obviously I don’t expect that to happen but I want to have a plan in place so that the decision will be easy.

Decisions, Decisions!

 

Photo Credit: Freedigitalphotos.net

Comments

  1. I think having a simple wordpress based website should be easy to do and have up and ready in no time. Have your friends evangelize your business by telling them to mention what you do to their family and friends. It’s tough getting those first couple of projects, but after that it gets easier. Good luck!
    Tonya@Budget and the Beach recently posted…My Perfect DayMy Profile

    • Thanks Tonya! I’m living in the same city I grew up in as a kid so I feel like I know a good number of people. I could definitely advertise to them and hope they spread the word. That is probably a great place to start.

  2. My wife is a CPA but works for a local firm. They derive most of their business from word of mouth. Treat the customers well and they will tell others. They also though are heavily involved in our local chamber of commerce. My wife loves going to these and networking…she is very outgoing.

    Have you considered doing bookkeeping work for small businesses instead of the CPA track? There may be less regulation to jump through, like not having to form an LLC. The businesses my wife interacts with are always looking for quality bookkeepers. That might be more flexible for you and allow you to see on a smaller scale what running a business would be like. Just a thought.
    Brian @ Luke1428 recently posted…Teaching Kids About Money: 4 Age Appropriate LessonsMy Profile

    • I could definitely do some bookkeeping work without becoming a CPA firm. I think it becomes an issue if I start prepping tax returns. This is a service I would like to offer and as a CPA I have to follow the rules of my state board.

  3. I had to get approval to run The Heavy Purse as an outside business, so definitely check to see if your employer or industry has specific requirements or an approval process you’ll need to go through. I would definitely recommend that you purchase liability insurance. You don’t want to be unprotected and innocent mistakes happen all the time. I don’t know if I would invest in ads in your local paper but instead I would offer a few local businesses the opportunity to work with you for free or a highly reduced price for a specific time period, provided a testimonial is part of the requirement. You want to find people who are respected in the community but also are referrers. Some people will happily work with you and love the work you do but never tell anyone, which is fine as long as they are paying you. When you’re starting a businesses, you want someone who will tell everyone how much they love you. 🙂
    Shannon @ The Heavy Purse recently posted…Get Disciplined: Take Control of Your FinancesMy Profile

  4. First of all, I think it’s awesome that you are covering all your bases before diving in. It’s very easy to just ‘go for it’ and then be crushed by all the stuff you didn’t plan for (insurance, time commitment, etc.). I think this business idea is also sustainable long term and seems like it would be a relatively consistent cash flow once you get off the ground. I’m excited to see where you decide to go with it!
    DC @ Young Adult Money recently posted…4 Ways to be Better Prepared for Taxes Next YearMy Profile

    • Thanks, DC. I really like the idea myself but we’ll see where it goes. I have a *slight* fear of failure so I’m going to do everything I can to make sure it’s a viable business…

  5. It’s great that you’re taking your time to dot the I’s and cross the T’s with your decision 🙂 It’s important to do that, especially since you do have to make sure you’re covered with all the liabilities. (my husband and my sister are both in commercial insurance and I hear their industry lingo all the time!)
    Have you thought about putting together a business plan to keep your ideas flowing and to make sure you have concrete goals for your business written out? I know it helps me when I have to reign in all the ideas floating in my head!
    Anneli @thefrugalweds recently posted…Frugal Reads Of The Week (ending 4/12/14)My Profile

  6. The important thing is that you are doing your homework first before jumping into this new venture. That is always smart. I was thinking that the firm websites you visited probably don’t need to update their sites because they get plenty of word of mouth referrals. That seems to be the case with small businesses so you probably don’t need to spend too much up keeping a fancy website.
    Raquel@Practical Cents recently posted…Car Insurance: How I’m Saving $428My Profile

  7. It does sound like it would take some work to get set up, but it would pay off in the long run. Once you get established, then you could really grow the business over the years. It’s great that you’re researching everything before taking the plunge!
    Lauren recently posted…Unplugging, and Getting Back Into the GrooveMy Profile

  8. I always wanted to have a side business when I worked for the banking industry, but because of all of the regulatory issues, it was not a great option for me. I love having my own business now and my best source of new clients is word of mouth. If you do a great job for people, they will want all of their friends to work with you.
    Shannon @ Financially Blonde recently posted…Music Mondays – Oops I Did It AgainMy Profile

  9. Miss Entrepreneurette says:

    I personally think it’s a fantastic idea! If you cater to bloggers and freelancers you will be able to conduct business on off hours and you will be able to bring in clients from this blog as well as word of mouth. I just know there are a lot of bloggers out there who would like help in the areas you’re a pro in. Especially since “old school” firms might not have as much knowledge about the online scene as you do.

    P.S. Because you have a full time job maybe cap it at 5-10 clients depending on how much work they need done each month and then increase from there.

    I say go for it! 🙂
    Miss Entrepreneurette recently posted…4 Ways To Blog More Efficiently (aka blog like a ninja)My Profile

  10. I think it’s good that you do your research before jump into it completely. Nevertheless, don’t think too much until you keep postponing to actually start it! All businesses start with action and they learn along the way. Also, personally I think it’s quite important nowadays to have a visually pleasing website if you just start your business. The ones that have dated website are probably have been in the business for a while so they only rely on word of mouth. Nowadays I think a nice looking website can give you better credibility and also a part of marketing strategy.
    Suburban Finance recently posted…Three Areas Of Your Home That Need a Deep Spring CleanMy Profile

  11. Liz, I think this is a great idea, and the fact that you know a lot of people in the town is a huge bonus. I totally agree about other biz websites too – we’ve looked at biz websites around here and they just make us cringe. As a consumer, a decent website would totally draw me in, where a bad one would easily making me turn the page, you know? Best of luck on your decision!
    Laurie @thefrugalfarmer recently posted…What’s Stopping You From Pursuing Financial Freedom?My Profile

  12. It’s refreshing that you are going this route because you are catering to a need that people have and that it cannot just be learned nilly-willy. I have some colleagues who have tried starting businesses based on their interests, rather than something that is a skill, that is difficult to imitate without the proper training or certification. Needless to say their ventures did not last long.
    Scott @ Youthful Investor recently posted…A Practical Guide to Socially Responsible Investing (Review)My Profile