Does an Accounting Practice Need an Office?
by AccountingWEB on
It’s obvious isn’t it? Working from home keeps overheads to a minimum and it sounds like an easy way to start up in practice, especially if you have yet to leave your previous job. Mark Lee, consultant practice editor for our sister site, AccountingWEB.co.uk, agrees. But there are other factors to consider too.
In this article I intend to explore some of the key arguments for and against starting up at home by highlighting some of the other options.
Physical vs. virtual
While you may not need a physical office away from home you may still want a virtual one. Most cities have facilities that allow you to have virtual office facilities that give your practice an address with more credibility than a residential one.
Virtual offices provide an address for the mail and many of these facilities will allow you to book meeting rooms when you need them. There are branded serviced offices in almost every city and also some more individual local facilities that can be traced through an Internet search.
A practical disadvantage though of a virtual office of this nature is the need to visit to collect your post – unless you pay to have this forwarded, which means you get it a day or two later than the sender might have expected.
Another option is to go one step further and to rent space on a short-term basis from a serviced office facility. This will often mean you have a secure room in an office building with its own reception, security and phone answering service.
Another option might be to start-up by renting space from another practitioner or in a hub of some sort for local start-up practices.
Alternatively you can arrange for a virtual answering service that will answer your calls as if they were your own reception. They then take messages or transfer calls to your mobile or landline number.
You need to include your business address on your website. What image will your address give to prospective clients? Will they pay any attention to it at all? I can’t answer that – nor can you, unless you ask some of them. What matters is the perception of prospects and clients. You would need to ask some to get a clear picture. As a rough guide it may be more important to established business clients than to start-ups and to pure tax return clients.
An accountant who started a practice a few months back told me that he has found out that his client base of professional people take him more seriously because he has a city address rather than a residential one.
The Google effect
Remember the power of Google. I’m not suggesting that prospects will use the streetfinder facility to zoom in to see whether your office is at home or in an office block. But some might I suppose.
I’m more concerned with the search engine optimization (SEO) issue: These days Google search results show local accountants on a map. Do you want your office to show up by reference to where you live or by reference to the area where you are targeting prospects? If the latter, you need to have an address there.
As a start-up perhaps you intend to work alone initially. Alternatively you may be quite happy for any support staff, colleagues, part-time staff, contract workers, or a virtual assistant to visit you at home. Or you may not.
Do you want to limit your expansion and the efficiency of your practice by virtue of your initial desire to constrain costs and start-up at home?
Is it too easy?
These days almost anyone can start a business or an accountancy practice at home. We would like to think that any qualified accountant choosing to do this would have the skills and experience to prepare at least an outline business plan beforehand, and that the accountant would have considered the practical, commercial, and strategic issues and made an informed decision about where to start their business.
One argument I have noted is that you can charge lower fees if you start-up at home as you have lower overheads to recover. This is true but it does rather tie you into servicing clients who are especially fee conscious. And what happens if your business is successful and you need to move out. Will you expect your initial clients to pay more because you now have higher overheads? Why should they care? They will be receiving the same service from the same accountant.
The contrary argument is that by incurring rental costs from the outset you are forced to consider a sustainable business model. This can also provide an added impetus to build the practice faster than might otherwise be the case if you were based at home.
Will you be lonely?
Some people who work at home find it lonely. This can also happen if you have an office elsewhere until and unless you have staff or someone else working alongside you.
Whether you find it more lonely working from home depends on your personality and your preferred approach to working. I quite like it. But I do notice that I tend to be more active on social networking sites (especially Twitter) on the days I work from home.
These days, there are ways to overcome the issue of loneliness. In addition to utilizing social media tools, you can attend more face-to-face networking events and build relationships that can replace those you used to have when you worked in a larger practice.
Working from home saves the cost of commuting – whether by car, train, trolley, or bus. It also means no time wasted commuting. But maybe that is productive time for you. For example, when I was in practice I did all of my professional reading on the train. Other people use the time to gear up and plan the day ahead and to unwind before reaching home.
Will your saved commuting time convert into more productive billable time? Or will it give you more non-work time? As part of your start-up plan you need to decide how many hours a day you are prepared to spend working.
Some people like the structure of having fixed office hours (as far as possible) and find this discipline easier if they work away from home. Similarly some people find it easier to focus on work issues in an office environment that does not contain the distractions of their home.
Then there is the issue of whether you want clients coming to your home – at all hours (as they know you’re there)?
Sounding Like an Accounting Firm
I suggested above that office facilities could give your practice an address with more credibility than a residential one. This may or may not be relevant and you may want to start-up from home regardless.
What you might choose to do then is to give your house or flat a business sounding name and to include this in your address. So, for example, instead of being Joe Soap, CPA, 5 Beehive Lane, your address might become: Joseph A. Soap CPA, PC, 5 Beehive Lane.
Mark Lee is consultant practice editor of AccountingWEB.co.uk and writes the BookMarkLee blog to help accountants build more successful practices more enjoyably. He is also chairman of the Tax Advice Network of independent tax consultants.
You may like these other stories...
For the first time in the five-year history of Vault.com’s rankings of the top 50 accounting firms to work for in North America, a firm has held the top spot as best accounting employer for two consecutive years....
With tomorrow being Tax Day, you might see some procrastinators at your office filling out forms, printing out paperwork, or getting last-minute tax advice from their accountant so they can meet the IRS’s filing...
You can read volumes on how to manage an accounting practice. But if you want the quick version, just read the following four points. Everything else is just commentary. (These points come out of the 1997 book, The...
Upcoming CPE Webinars
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.