How to Start Your Small Home-Based Accounting Business
Do you wake up in the morning energized about going to work? Are you passionate about your day job? Does it fulfill you? For many of us, the answer is no. We make choices in our teens and early twenties and then find ourselves in a career we don’t love. But life is too short for that!
So, how do you get out of that rut? For me, it was all about focusing on what I was already doing that brought me joy. What kept me going through the day was helping people. While working in finance for a nonprofit in the education sector, I noticed I was spending more and more of my free time preparing taxes for friends and family. I enjoyed helping and encouraging others to create a better future for themselves.
That gap between my day job and my passion led me to a career change. I went back to school and became a Certified Human Resources Professional—a job that was centered around helping people achieve their goals and find their own fulfillment at work. All the while, I was expanding my small home-based tax business to help people in the business sector.
You may be reading this and thinking, "Wow, that sounds like a lot of work." But when you find that thing that you’re truly passionate about, it’s not work. It’s fulfilling.
Where to Start
Start with what you’re passionate about. For me, it was helping others through their taxes and business planning, but there are tons of opportunities out there that don’t require you to be full time but still allow you to take advantage of all the tax credits associated with having your own home-based business.
Once you find that thing that gets you up in the morning, don’t worry about incorporating your business until you’re making at least $500,000 a year. Many people think they need the protection of an LLC in case of a lawsuit, but the truth is that if you have really good insurance, specifically liability insurance added to your home-based business, you’re already protected. There’s no need to spend all that extra money, time, and hassle incorporating your business.
Choose Your Niche
As my small business has grown, it’s been as important for me to know what I don’t want to do as it is to know what I do want to do. I don’t do bookkeeping because I feel that it’s important for people to know where their money is going, especially small businesses. So, I teach people how to do their own bookkeeping and I help them on whatever system that works for them.
A lot of time people hire bookkeepers because they don’t know how an accounting system or financial software works. But the truth is, anyone can be a bookkeeper as long as they know how to put like things together. So, instead of handling their day-to-day finances, I consult with my clients to make sure that they’re sticking to whatever mission or vision they’ve created for themselves and their business.
Outside of tax season, I help clients with their hiring strategy, write employee contracts, policy manuals, and define smart processes. This keeps my business humming along all year long and allows me to lean on my HR background and training to add value wherever I can.
Use Technology to Your Advantage
One of the biggest concerns many people have when starting a home-based business is that they just won’t have enough time. This is especially big if you’re starting an accounting business. Taxes are cyclical, and during tax season, it can feel like there aren’t enough hours in the day to get everything done. But the fact is, you don’t have to do everything.
Last tax season, I had the opportunity to beta test a new Wolters Kluwer cloud-based tax software, CCH iFirm Tax. In the past, I’ve used Profile, QuickTax, and even good old-fashioned paper and pen. These old ways worked, but being in HR, I’ve come to understand the importance of being a change agent. Profile and QuickTax are structured in a way that is very beneficial for one type of learner: the person who already knows every form, every little thing they need to do, and they can walk through step by step on their own. But in Canada, our tax act is over 3,000 pages. Nobody is ever going to memorize that!
I’m a kinesthetic learner. I learn best from just doing, trying things out, so Profile and QuickTax just weren't for me. CCH iFirm Tax is cloud-based so I’m able to use it from anywhere at any time, and learn on my schedule, even if I’m waiting on my kids at hockey practice or between errands.
CCH iFirm Tax also digitizes all the necessary forms; everything I need to do is electronic. The more I can do electronically with clients, the less I need them actually sitting in front of me. Now we can email and text information back and forth, and my clients can be in the comfort of their home and me in mine, working together without having to be restricted to specific office hours. Plus, I no longer need my clients to sign a paper authorization form, mail it in to Canada Revenue Agency (CRA), and then wait three weeks just so I can access their financial accounts. This instant authorization feature has saved me an enormous amount of time.
This, along with the other time savings I’ve experienced through this new software, has not only allowed me to serve my existing clients more efficiently, but it has also given me the opportunity to grow my business.
When I was first getting into HR, I took a business course on how to find work-life balance. One of the assignments was to write down what we did every day and the time it took us to do it. So, at the end of the week we had a pie chart that illustrated how much time we spent on personal stuff, work, and the things that we liked. After completing my own chart, I started to think that’s not a true indication of work-life balance, because if you really love what you do and you enjoy getting up to go to work every day, then how is that work?
I’ve also made conscious choices in my life to promote a work-life balance, like moving to a house within two kilometers from my day job. Now, if I have to leave work because my kids need me for something, I can do that easily and quickly. It’s these little things, combined with the joy of helping people achieve their financial goals, that produce my work-life balance. And as you take the steps to create your own small home-based accounting business, I hope you find the same joy, passion, and balance that my business has given me!