Accounting Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their accounting firms.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write an accounting business plan step-by-step so you can create your plan today.
How to Write a Business Plan for an Accounting Firm
If you want to start an accounting business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your accounting business plan.
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of accounting business you are running and the status. For example, are you a startup, do you have an accounting business that you would like to grow, or are you operating an established accounting business you would like to sell?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the accounting industry.
- Discuss the type of accounting business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
Company Overview
In your company overview, you will detail the type of accounting business you are operating.
For example, you might specialize in one of the following types of accounting firms:
- Full Service Accounting Firm: Offers a wide range of accounting services.
- Bookkeeping Firm: Typically serves small business clients by maintaining their company finances.
- Tax Firm: Offers tax accounting services for businesses and individuals.
- Audit Firm: Offers auditing services for companies, organizations, and individuals.
In addition to explaining the type of accounting business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of clients served, or the amount of revenue earned.
- Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Accounting Firm Company Overview Example
Accurate Accounting Solutions is a new Accounting Firm/Services serving customers in Portland, OR. We are a local accounting firm, poised to fill the gap in the market for high-quality local accounting services. Our presence in Portland is not just about offering accounting solutions; it’s about establishing a firm that prides itself on precision, reliability, and customized service for each client. The realization that there are no high-quality local accounting firms in the area motivated us to launch our services, aiming to be the go-to solution for individuals and businesses alike.
At Accurate Accounting Solutions, we offer a comprehensive suite of accounting services tailored to meet the needs of both individuals and businesses. Our offerings encompass bookkeeping, payroll, tax preparation, and more, designed to streamline financial management and compliance for our clients. Our approach is rooted in understanding the unique needs of each client, ensuring that we provide solutions that are not just accurate, but also strategically aligned with their goals. Whether you’re a small startup looking for bookkeeping support or a growing enterprise in need of comprehensive accounting strategies, we’re here to help.
Based in the vibrant city of Portland, Oregon, Accurate Accounting Solutions is strategically located to serve customers within the Portland area. Our choice of location is deliberate, allowing us to tap into the local market and build strong, face-to-face relationships with our clients. This local presence is crucial for us, as it enables us to offer personalized service and support that’s just a phone call or a short drive away.
Our firm is uniquely qualified to succeed for several reasons. Firstly, our founder brings invaluable experience from previously running a successful accounting firm. This background provides us with a deep understanding of the industry, as well as insights into best practices and innovative solutions. Secondly, we are committed to offering higher quality accounting services compared to what’s currently available in the market. This dedication to excellence is evident in every aspect of our operations, from the services we offer to the personalized attention we provide each client.
Accurate Accounting Solutions was officially founded on 2024-09-02. Structured as a Sole Proprietorship, our firm has made significant strides since its inception. Our accomplishments to date include the development of our brand identity, evidenced by our professionally designed logo and the strategic selection of our company name. Additionally, we’ve secured a prime location for our operations, ensuring that we’re accessible to our target market. These milestones mark the beginning of our journey, laying a solid foundation for the future growth and success of Accurate Accounting Solutions.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the accounting industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the accounting industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your accounting business plan:
- How big is the accounting industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your accounting business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Accounting Firm Industry Analysis Example
The Accounting Firm/Services industry in the United States is a significant market with an estimated size of approximately $160 billion. This industry encompasses a wide range of services, including auditing, tax preparation, payroll processing, and financial consulting. With the increasing complexity of financial regulations and reporting requirements, the demand for accounting services continues to grow.
Market research indicates that the Accounting Firm/Services industry is expected to experience steady growth in the coming years. The market is projected to expand at a compound annual growth rate of around 4% over the next five years. This growth can be attributed to factors such as the increasing number of businesses seeking professional accounting assistance, the rise in outsourcing of finance and accounting functions, and the growing complexity of tax laws.
Accurate Accounting Solutions, as a new Accounting Firm/Services serving customers in Portland, OR, is well-positioned to capitalize on the positive trends in the industry. With a focus on providing high-quality and reliable accounting services to businesses in the region, Accurate Accounting Solutions can benefit from the growing demand for professional accounting assistance. By staying abreast of industry trends and offering tailored solutions to meet the needs of clients, the firm can establish itself as a trusted partner for businesses seeking financial expertise.
Customer Analysis
The customer analysis section of your accounting business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, organizations, government entities, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of accounting business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
Accounting Firm Customer Analysis Example
Target Customers
We will target a broad spectrum of customers in Portland, OR, with a focus on local small to medium-sized businesses. These businesses often require comprehensive accounting services, including bookkeeping, tax preparation, and financial planning, to effectively manage their finances and remain compliant with regulations. Our personalized approach will address the unique needs of each business, ensuring they receive tailored solutions that promote growth and sustainability.
Local residents will also form a significant portion of our customer base, particularly those who need assistance with personal tax preparation and financial planning. Individuals seeking to optimize their tax returns and manage their personal finances more efficiently will find value in our services. We will offer guidance on budgeting, retirement planning, and investment strategies to help residents achieve their financial goals.
In addition to businesses and individual residents, we will target start-ups and entrepreneurs who require support in setting up robust financial systems from the onset. By providing expertise in financial forecasting and strategic planning, we will empower these clients to make informed decisions that foster long-term success. Our services will include assistance with business formation, funding strategies, and financial projections to ensure a solid financial foundation.
We will also engage with nonprofit organizations, understanding their unique accounting needs such as fund accounting and grant management. Our services will help these organizations maintain transparency and accountability in their financial reporting, which is crucial for maintaining donor trust and securing future funding. By supporting nonprofits in achieving their mission-driven goals, we will contribute to the broader community impact in Portland.
Customer Needs
Accurate Accounting Solutions fulfills the pressing need for high-quality accounting services among individuals and businesses. Clients can expect precise and timely financial reporting, which is crucial for informed decision-making and strategic planning. By offering expert advice and comprehensive financial analysis, the firm empowers clients to optimize their financial health and achieve their financial goals.
Businesses in Portland often struggle with complex tax regulations and compliance issues, and Accurate Accounting Solutions provides clarity and guidance in these areas. The firm offers tailored tax planning and preparation services, reducing the risk of errors and ensuring clients take advantage of applicable tax benefits. This personalized approach helps businesses maintain compliance while maximizing their financial outcomes.
In addition to tax services, Accurate Accounting Solutions addresses the growing demand for efficient bookkeeping and payroll management. Clients benefit from streamlined operations, allowing them to focus on core business activities without the distractions of financial administration. The firm’s dedication to accuracy and confidentiality builds trust with clients, fostering long-term partnerships.
Furthermore, Accurate Accounting Solutions understands the need for ongoing support and accessibility. Clients have access to knowledgeable professionals who can provide insights and solutions at any stage of their financial journey. Through consistent communication and a commitment to excellence, the firm enhances client satisfaction and loyalty.
Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other accounting firms.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes CPAs, other accounting service providers, or bookkeeping firms. You need to mention such competition as well.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of accounting business are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
Concerning the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide options for multiple customer segments?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
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Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an accounting business plan, your marketing strategy should include the following:
Product: In the product section, you should reiterate the type of accounting company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide auditing services, tax accounting, bookkeeping, or risk accounting services?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place: Place refers to the site of your accounting company. Document where your company is situated and mention how the site will impact your success. For example, is your accounting business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions: The final part of your accounting marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to websites
- Distribute flyers
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your accounting business, including answering calls, scheduling meetings with clients, billing and collecting payments, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your accounting business to a new city.
Accounting Firm Operations Plan Example
Key Operational Processes
To ensure the success of Accurate Accounting Solutions, there are several key day-to-day operational processes that we will perform:
- Maintain accurate and up-to-date client financial records using advanced accounting software to ensure efficient service delivery.
- Perform regular financial analysis and generate reports to offer clients insights into their financial health and areas for improvement.
- Conduct bookkeeping tasks, including managing accounts payable and receivable, reconciling bank statements, and maintaining the general ledger.
- Ensure compliance with local, state, and federal tax regulations by staying informed of changes in tax laws and preparing tax documents accurately and on time.
- Engage in consistent communication with clients to understand their financial needs and provide tailored accounting solutions.
- Develop and maintain internal accounting processes and controls to ensure data accuracy and financial integrity.
- Offer financial planning and budgeting services to help clients achieve their financial objectives and manage cash flow effectively.
- Provide payroll services, including calculating employee wages, withholding taxes, and ensuring timely salary disbursement.
- Engage in continuous professional development to stay updated on industry trends and best practices in accounting and finance.
- Utilize cloud-based accounting tools and technology to enhance the efficiency, security, and accessibility of financial information for clients.
- Encourage client feedback and implement improvements to enhance service quality and customer satisfaction.
- Foster a collaborative team environment where staff members can share knowledge and skills to improve overall service offerings.
Milestones
Accurate Accounting Solutions expects to complete the following milestones in the coming months to ensure its success:
- Launch Our Accounting Firm: Officially open the firm by securing a physical or virtual office space, setting up essential technology infrastructure, and establishing an online presence through a website and social media.
- Obtain Required Licenses and Certifications: Ensure compliance with state and federal regulations by obtaining necessary licenses and certifications, such as CPA licenses for staff and any business operating permits.
- Establish a Client Acquisition Strategy: Develop and implement a marketing and sales strategy focusing on networking, partnerships, and digital marketing to attract and retain clients.
- Hire and Train Key Personnel: Recruit qualified accountants and administrative staff, providing them with comprehensive training to ensure high-quality service delivery and client satisfaction.
- Achieve Initial Revenue Milestone: Reach $15,000 in monthly revenue by securing a steady client base and delivering exceptional accounting services.
- Implement Robust Financial Controls and Reporting: Establish internal financial controls and regular reporting mechanisms to monitor the firm’s financial health and make informed business decisions.
- Build Strategic Partnerships: Form alliances with complementary businesses or organizations, such as local banks or business associations, to enhance service offerings and expand the client base.
- Develop and Offer Specialized Services: Identify niche areas or industries where the firm can offer specialized accounting services, thereby diversifying revenue streams and differentiating from competitors.
- Enhance Client Satisfaction and Retention: Implement feedback systems and client relationship management tools to continuously improve service quality and maintain long-term client relationships.
- Evaluate and Optimize Operations: Regularly assess the firm’s operational efficiency and make necessary adjustments to processes, technology, and staffing to ensure scalability and sustainability.
Management Team
To demonstrate your accounting business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing accounting businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing an accounting business or bookkeeping firm.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer discounts for referrals? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your accounting business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a accounting business:
- Cost of equipment and office supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes
- Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of your most prominent clients.
Writing a business plan for your accounting business is a worthwhile endeavor. If you follow the accounting business plan example above, by the time you are done, you will truly be an expert. You will understand the accounting industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful accounting business.
What Is an Accounting Business Plan?
A business plan provides a snapshot of your accounting business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan for Your Accounting Firm
If you’re looking to start an accounting firm or grow your existing accounting business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your accounting business to improve your chances of success. Your accounting business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Accounting Firms
With regard to funding, the main sources of funding for an accounting firm are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for accounting firms.
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