How to create an accounting and tax services business plan

Putting together a business plan is hugely important if you’re trying to set up a new business. It provides a guideline for how your company should develop and operate in the future. If your business idea centres around providing accounting and tax services, you’ll particularly benefit from a solid business plan due to the complicated nature of accounting businesses.

This article will show you how to create an accounting and tax services business plan. We’ll cover a variety of important topics that you should cover in your plan, including:

• Market research
• Decide on your services
• Financial planning

A key part of writing a business plan is research and preparation. Without knowing a lot about the industry that your business will operate in, you’ll struggle with running your business effectively.

Market research is the process of learning more about the market your business will exist in. This means finding out information about your customers and their needs, as well as your competitors’ services. You need to know how to stand out amongst the crowd, whether it’s through unique selling points or impactful marketing.

Those offering accounting and tax services usually have an advantage here. Since accounting is an advanced subject and requires years of study to practice effectively, there tend to be few competitors in the field. That said, accountants in large urban areas might still have to deal with the strong competition due to the higher population.

In these cases, a good idea is to focus your market research on your competitors’ services. Once you know more, you can decide if you should start offering similar services or if you should direct your efforts elsewhere. Additional training may be required if you choose to offer a new service to attract customers. 

During market research, consider if you should offer traditional accounting services or if you should operate solely online. Online accounting is a relatively new service that differs from traditional accounting in a few ways.

A traditional accountant will usually need to meet with clients and speak face-to-face about their financial status. Clients will also need to hand over their financial information, which means delivering physical documents to you or emailing over digital versions.

An online accountant will conduct the entire relationship between themselves and the client over the internet. You may have the opportunity to speak with a client on the phone or in a videoconference, but much of the contact you have with your client will be via email or other messaging services. There is rarely (if ever) an opportunity to meet face-to-face.

Online accountants will also often have a software tool that makes uploading and transferring data easier. During your market research, try to find out if you’ll have more potential clients operating online and if you need any software or technology to do so. 

When you initially set up an accountancy practice, you’ll need to figure out what services you’ll actually be providing to your clients. Focusing on accounting and tax services is a good start, as business owners who need help filing a Self-Assessment tax return or want to reduce their tax bill will be a good source of income. 

‘Accounting services’ is a fairly general term though, so you may want to consider specialising further so that you can avoid competition. For instance, if you’re particularly knowledgeable about audits, you could help businesses prepare for them. Alternatively, you could use your accounting skills to provide risk assessments for companies expanding or diversifying their operations.

A target market is a specific group of customers that you think will be interested in your services. While deciding on the accounting services you’ll offer, keep a potential target market in mind. You might choose to specialise in a particular industry instead of offering a specific service.

For example: if you know a lot about small businesses and have a good understanding of how their finances work, consider only offering accounting and tax services for small businesses. You could specialise in even further than this: you might only do bookkeeping to retail firms or contractors. 

Like any business, you’ll need money to continue operating and serving clients. As such, you should dedicate a large section of your business plan to financial planning. 

This section will include things like the amount you’re going to spend on setting up your business and how much you’ll need to charge for your accounting and tax services. It’s a good idea to also list how you’ll budget for the different departments of your business. For instance, you’ll need to plan out how much you’ll spend on marketing.

This is standard planning that any company will need to do, but there are a few expenses that an accountant would need to explicitly plan for. Training is a big one: financial law changes frequently, and you’ll need to stay up-to-date if you’re going to provide an adequate level of service. This training may cost money, or you may need to budget for the time you’ll spend studying instead of helping clients. 

Another important expense for accountants is insurance. Professional indemnity insurance covers mistakes such as professional negligence, unintentional copyright or confidentiality breaches, lost documents or data, and defamation. Accountants deal with these kinds of issues frequently (particularly lost documents and professional negligence), so remember to plan for how you’ll afford these kinds of insurance. 

While you complete your financial planning, you might find that bookkeeping for your own business will take up a large portion of your time. 

You can save yourself time on manual admin and help your clients keep organised records with Countingup’s free accounting software. It is designed specifically for accountants working with smaller business structures. Practice clients get access to an exclusively great value business current account that takes the strain out of essential bookkeeping.

If you’re looking to receive structured client data in real-time, without continually chasing for boxes of receipts, you’ll find Countingup a breath of fresh air as a fully MTD compatible software that frees up your time to focus on running your business.

Discover more about the advantages of Countingup here.