The Ultimate Guide for Success in the World’s #1 Most Profitable Business
In this article:
- Starting a bookkeeping business means you get
- Read this before you start!
- The top seven character traits of great bookkeepers
- Why do YOU want to start a bookkeeping business?
- The BIG Why Exercise
- Why do small businesses need a bookkeeper?
- Bookkeeping software benefits
- How do I get clients and make money while I’m starting a bookkeeping business?
- What accounting and bookkeeping services can I provide to small business owners?
- Your Action Plan
Want to know the ins and outs of starting a bookkeeping business? This might be one of the best decisions you ever make as you consider your own respectable, home-based business.
And, how can I say this? Glad you asked.
Entrepreneur Magazine ranks bookkeeping – along with accounting – as the #1 most profitable business on the planet.
In addition to a bookkeeping business being a cash-cow, it also has built-in demand. Every business in the world is required to maintain accurate bookkeeping records. Small business owners need to know where their money is coming from and where it is going…
…enter the great bookkeeper.
Small business owners (we also call them entrepreneurs) need a great bookkeeper to make sure their financial statements are in order.
However, entrepreneurs WANT more; they long for a bookkeeper that goes beyond the accounting / bookkeeping and helps their business to be more profitable. Small business owners want someone to help them to make sense of their balance sheet (one of the big three financial statements which shows assets, liabilities and equity) and explain it in laymen’s terms.
With the advancement of cloud-based business accounting apps, bookkeepers now focus less on the boring aspects of the profession such as data entry, and can focus on providing real value to entrepreneurs in the form of advice.
And, that advice helps small business owners to be more profitable. A more profitable client means you earn more money too. It’s a win-win scenario.
What does all of this mean for YOU? Is there a benefit for you starting a bookkeeping business? Let’s see.
Starting a bookkeeping business means you get:
A Flexible Schedule: most of your work as a bookkeeping business owner can be done when it’s convenient for you. Maybe you’re a night owl or early bird.
It’s up to you. Now, there are times when you have to work around your client’s schedule; but that’s not too often.
Ability to choose how much you work: do you want to run your bookkeeping business full-time, part-time or somewhere in between?
You are in control of your own destiny. Of course, this is all about putting life back into the proverbial work-life balance.
The power to determine with whom you work: life is way too short to work with jerks. Maybe your boss is one. Or, maybe you just want to provide services to people you can relate to.
With a job, you have no such luxury. With your bookkeeping business? YES!
Freedom to work wherever you want: want to work in your PJs from the kitchen table? No worries.
Feel like going to the coffee shop? You can do that too. Since this is your VIRTUAL bookkeeping business, you never go on-site to visit your clients.
Great earning potential: remember, Entrepreneur Magazine ranks bookkeeping as the #1 most profitable business that you can operate. More profitable than doctors offices.
The key is to provide your clients with tremendous value. This means higher earnings for you.
Be there for your life’s precious moments: maybe it’s your son’s first basketball game or your daughter’s recital.
Maybe it’s that family vacation you’ve always dreamed of. These are the irreplaceable moments that you get to be a part of!
Don’t forget to download, save, or share this benefits of bookkeeping infographic for reference:
Warning: Don’t Start Until You Read This!
Let’s get one thing clear up front: starting a bookkeeping business is NOT for everyone. There are certain character traits that you need to have in order to be a success.
I have trained 3,491 bookkeepers (and counting) over the course of my career. I’ve learned what separates the great bookkeepers from the average bookkeepers. And, by the way, the GREAT earners from the average earners.
To help determine if YOU will make a great bookkeeper, I’ve compiled a list of seven (7) key character traits that all great bookkeepers share.
Before you discover the seven key character traits, I would like for you to pause and write down what you think they are. Go on, I will wait. :)
Ok, you’re back! Awesome…without further ado…let’s look at the character traits you need in order to start a bookkeeping business.
The top seven character traits of great bookkeepers:
- Trait #7: Positive outlook Remember the Disney movie Pollyanna? My kids used to love that flick. You see, Pollyanna always played what she called “the glad game.” She tried to find the good in every situation.Now, I do not suggest that you have to take things to the Pollyanna extreme.While that is certainly wonderful if you can, we don’t live inside a pretend world.As for starting a bookkeeping business, a positive outlook means that ~ regardless of what happens ~ you KNOW (without a doubt) that you will prevail. You know that your SUCCESS is a given. You don’t always know HOW you will succeed. Sometimes you have to make that up as you go.Being a successful entrepreneur is sometimes lonely. There are no help desks, bosses to ask for help or resources to tap into other than your own ability.To be confident in your own ability; that, my friend, is a positive attitude.
- Trait #6: A difference maker Do you like to help? Are you a nurturer? If so, then YOU are a difference maker.In the world of starting a bookkeeping business, being a difference maker is all about impact. This impact is to help your client, the entrepreneur, to succeed. And not just in terms of dollars and cents.Remember in trait #7 above when I said it’s sometimes lonely for entrepreneurs? Your clients are no exception. Just like you, they have no one to turn to in most situations. To understand this fact is the root of a special relationship between you and your client.Yes, the main focus of your difference-making ability is on finances: make more money, get rid of debt, more cash flow, etc.However, as a great bookkeeper, you look beyond just making money, and look at the big picture. And, guess what… It’s so FREAKIN’ SIMPLE to do this – IF……YOU are a difference-maker.And bookkeepers who are difference makers with positive attitudes make a LOT more money than those without these key character traits.
- Trait #5: Hard-worker Wow, did I REALLY just say that? I mean, if you own your own business – isn’t this a given?Well, it should be. However, it’s important for you know, up front, that to start a bookkeeping business requires hard work. I liken this to having a new-born. When the baby is first introduced to the world, she requires around the clock attention. This means lots of sleepless nights.To start a bookkeeping business: it’s not about diaper-changes and the like, but it does require a lot of your attention. Especially during the first months and years of existence.But, oh the rewards! I always say that it’s a short-term sacrifice for a lifetime of benefit.
- Trait #4: Organization Ummm, you deal with other people’s money. That means you must be organized.Now, I am NOT the most organized guy in the world, so I rely on systems and software to help me. Luckily, “there’s an app for that”!All the tools you (and I) need to keep our ducks in a row are out there.However, you must be somewhat organized to be a great bookkeeper. Slobs need not apply…
- Trait #3: Ability to handle multiple projects As a great bookkeeper, you will serve many clients. It could be two or two hundred…that all depends on you and how big you want your bookkeeping business to be.We must be able to look at the work that needs to be performed and prioritize it to meet or beat any deadlines. Most days this is easy-peasy. Some days, however, it gets a bit dicey.Bookkeeping has times of peak workload and then down times.One of the systems we help students to implement is all about productivity – getting the most stuff done in the shortest time possible.Mix in organization with productivity and you’re off to the races.
- Trait #2: Detail-oriented Numbers. People. Money. Enough said, right?
- Trait #1: Personable and caring And this #1 trait of successful bookkeepers comes as a shock to most, including yours truly, as I discovered what makes a GREAT bookkeeper.How about you?Was personable and caring on your original list?Bookkeeping is first and foremost a RELATIONSHIP BUSINESS.While numbers are important, that is not why business owners pay you the “big bucks” so to speak. Numbers are numbers and if we try to compete on this level as bookkeepers, we are viewed as a commodity.However, when we let our personality shine through and show business owners that we truly care and are personable – well, that is something unique to YOU.Being personable means that you can speak to your client on their level. No fancy bookkeeping talk here; just plain and simple explanations about what’s going on in their business. And, more important, how they can make their business better.The great news is: it is simple to speak simple…to your clients that is. One of the things we teach our students who start a bookkeeping business is how to talk to their clients in a way they understand and appreciate.You see, entrepreneurs are prideful people. (That includes me as well.) We don’t like to admit that we don’t know something. So, if you speak to them with a lot of fancy bookkeeping mumbo-jumbo, they won’t understand. To make matters worse, they won’t ask you to explain.This is what leads to frustrated clients. And a frustrated client won’t be a client too much longer.And there is such an easy solution. (More on this later.)
Here’s another cool infographic you can download, save, or share:
What do the seven character traits of great bookkeepers mean for you?
In short, they mean a lot!
Before starting a bookkeeping business, you need to be honest with yourself about your ability to succeed. You want to make sure bookkeeping is a good fit for you.
Here is a simple 2-part exercise for you to complete BEFORE you start a bookkeeping business.
- Ask yourself: “Do I have the seven character traits of great bookkeepers?” Now, you don’t have to be a ’10’ in each of these traits. To have the seeds of them is enough. But, we must develop these over the course of our existence as great bookkeepers and overall swell people.
- Ask others who know you well and that you respect: “Do YOU think I have the seven character traits of a great bookkeeper?” Show them this list and the explanations.And, please don’t get offended if they say you don’t. Also, make sure you ask people who will shoot straight with you and not sugar-coat reality.
Why do you want to start a bookkeeping business?
Once you determine you have the seedlings of the seven character traits of a great bookkeeper, you need to answer this question:
“Why do I want to start a bookkeeping business?”
Before we dive into this philosophical experience, I want you to think back to Halloween as a kid. Really, think back and recall your costumes over the years.
Ghosts. Goblins. Army men. Princesses. Doctors…Bookkeepers.
Wait, bookkeepers? What?
Ok, so none of us, when we were kids, aspired to become bookkeepers. While bookkeeping is one of the noblest and most-needed professions, you have a deeper reason to start a bookkeeping business.
Your job is to outline, in specific terms, why you want to start a bookkeeping business.
Is it so that you can earn a great living in a respectable profession?
Are you starting a bookkeeping business so that you can be there for all of your kids events?
Do you want this so that you can travel, work from anywhere at almost anytime?
You must be clear on WHY you want to start a bookkeeping business.
And why is this WHY important? Well, your why is what gets you through the rough patches.
Your big why is what causes you to push forward through the pain. In short, your why is the rocket fuel that propels you into the stratosphere of success.
Your BIG Why Exercise
I enjoy this fun activity. But, I will warn you: it’s a bit woo-woo. You know, like head / psychological stuff. Mindset.
As a man, I used to be too proud to do woo-woo. Now, since I’ve changed my attitude toward it, my life and business have been transformed. And, not just a little transformation – a boat load.
Here’s what you do:
- Brainstorm all of the benefits for you to start a bookkeeping business. WRITE THESE DOWN – the faintest pencil is more potent than the best memory.
- Now, referring to your list from step 1, ask yourself “Why do I want this?” Often times, I list a benefit like: “I want a new car” or something superficial like this. When I ask myself “WHY do I want a new car?”, now I am getting somewhere. I want the car as a symbol of my success. Or, for others impression of me…or, well you get the picture. The takeaway is to keep asking yourself why you want that which you want. Woo-woo power here.
- Make a physical collage. Say what Ben? You mean like a scrapbook? Yeah, sorta. Find pictures that represent why you want to start a bookkeeping business. This could be a photo of your children, your spouse, a vacation — whatever.This is your project, so do whatever you want. Now, get out the glue stick and paste those suckers to a piece of poster board or a box.
- Finally…put this Picasso (your collage) in a place where you can see it all the time. Study it at night before you go to bed. Look at it first thing in the morning.This simple exercise etches in your subconscious your “why” for starting a bookkeeping business.
At this point you’ve determined you have the seven character traits of a great bookkeeper. And, you are crystal clear on why it is you wish to start a bookkeeping business.
That’s great news.
However, there are a few questions that should be swirling around your head. Questions like:
- What if I don’t know a thing about bookkeeping or accounting?
- How long will it take me to start a bookkeeping business?
- How much money does it cost to get started?
- What tools, technology and professional certifications do I need to be successful?
- If cloud-based bookkeeping is so great, why do entrepreneurs need me as their bookkeeper?
- How do I get clients and earn a living?
- What accounting and bookkeeping services can I provide to small business owners?
These are all important questions. And, you need to know the answers BEFORE you dive into the bookkeeping business pool.
Should I start a bookkeeping business with no experience?
I will cut to the chase: this is NOT a big deal. You don’t need to know the ins and outs of double-entry bookkeeping to make your bookkeeping business work.
What IS a big deal are the seven character traits and knowing your big why.
You do NOT need a bachelor’s degree, associate degree in bookkeeping and accounting.
You see, when I owned my accounting firms, we did tons of bookkeeping. Which meant, I needed lots of great bookkeepers to serve our clients.
The problem was (and still is)…GREAT BOOKKEEPERS ARE HARD TO FIND!
It seemed that every bookkeeper I hired with lots of “experience” turned out to really suck at bookkeeping. Weird!
I needed great bookkeepers. And finding a great bookkeeper is like locating The Loch Ness Monster. So, I improvised…
…I began to hire quality people who I knew were: personable, caring, hard-working, etc., etc. I then trained them to become great bookkeepers.
Now, in all fairness, this training did NOT happen overnight. It took time.
But, the more rookie bookkeepers I trained, the more efficient our training program became.
“What does this have to do with me?”, you might be asking. Everything.
Our bookkeeper training cuts through the clutter. It focuses on what you need to know in order to become a great bookkeeper and tosses all the garbage you don’t need to know into the trash.
Even though you have no prior bookkeeping experience, relax. It’s okay. No worries mon as they say in Jamaica.
Make sure you have the seven character traits. Know your big why.
Then, find a hands-on, roll-up-your-sleeves bookkeeping course. One that rocks and shows you how to be a great bookkeeper in a “paint by numbers” format.
A follow-up question I get is: “Well, I DO have bookkeeping / accounting experience. Does this help or hurt me?”
Answer: it depends…nice cop out Ben.
It hurts if you are set in your ways and won’t adapt to the new way of bookkeeping. It helps if you are receptive to a new and better way to serve your clients.
How long will it take me to start a bookkeeping business?
Ever see the movie Sandlot? It’s one of my all time favorites.
There’s a part where someone asks how long Mean Ol’ Mr. Myrtles has to keep his dog caged. And the police chief answers: “Forever…forever…forever.”
It certainly does NOT take you forever to start a bookkeeping business.
However, it does take some time for you to immerse yourself into learning the Xs and Os of bookkeeping as well as how to setup and market your business.
Our comprehensive bookkeeping business course, Bookkeeper Business Launch, is designed to be completed in ten (10) weeks. Some students even get their first client while still in the course! I know, crazy.
While we design Bookkeeper Business Launch for you to start a bookkeeping business in 10 weeks, it’s really up to you. If you can focus full-time on starting your bookkeeping business, then it will take far less time to launch.
Look, bookkeeping is a simple business. But, that does NOT mean that it is easy. Nothing in life that has lasting worth is easy. Again, it is a short-term sacrifice for a lifetime of benefit.
Bottom line: you can be up and running in as little as ten weeks. It’s all up to you mi amigo! You control your own destiny.
How much are the start-up costs?
Starting your bookkeeping business costs a lot less than you might expect.
And remember bookkeeping is the #1 most profitable business. This is a virtual bookkeeping business, so you will definitely need:
- a computer
- access to high-speed internet
- cloud-based bookkeeping applications necessary to start your bookkeeping business (and run it.)
Beyond these three key items, here are the other startup costs you can expect when you start a bookkeeping business:
- business cards (even though you hand them out on rare occasion), $20
- office supplies (ask Dwight Schrute for a deal, but they might run $100)
- website domain name and hosting to get started, $50
- do-it-yourself website, around $100…it’s mainly your time and effort. This cost estimate is for stock photography and the actual platform like Wix or Square Space. You can also use WordPress if you need more flexibility.
- scanner, for the rare times when you need to send a document. You might already have an all-in-one solution that you could use and save some coin. However, if you don’t have one, you can pick up a decent used scanner for about $200. I like (and use) the Fujitsu ScanSnap S1500. It’s an older model. The new, fancy one has built-in Wifi. Ok, I am geeking out over here.
- Xero certification to show your clients you are a bookkeeper-bad-ass. This runs $249. But, I can get that cost waived. More on this later.
- Errors and omissions insurance downpayment; around $200. What exactly is errors and omissions insurance? Well, in case something goes awry, you commit an error or you omit ~ forget to do ~ something, this is your saving grace. Just like any other insurance, you hope you never have to use it. But, just in case, you MUST have this insurance. Don’t start a bookkeeping business without it!
- fancy pants computer safety software (like disk encryption, password management)…this runs about $185.
- setting up your bookkeeping organization, getting your business license and paying some other well-used taxes (uh-hummmm). This can vary SIGNIFICANTLY from state-to-state and county-to-county. But, I am going to to benchmark it to be $300. You could begin your business without setting up as a corporation or limited liability company (LLC). But, like errors and omissions insurance I stress the importance of you having it.
Okay, if I did my math right (please, say I did else I might need to find a new line of work) – that means your estimated startup costs are about $1,404.
If you’re a thrifty person, I know you can reduce that amount. And, some of the items I list above you can hold off on purchasing right away.
Most businesses cost tens if not hundreds of thousands of dollars to launch.
But not your bookkeeping business! Get going for less than $1,500 smackers…in the world’s #1 most profitable business. All kidding aside, that’s pretty cool!
What tools, technology and certifications do I need to start a bookkeeping business?
Every craftsman (or craftswoman :)) needs his handy-dandy toolkit.
To help him finish the job to the best of his ability, in the least amount of time possible, to deliver a high-quality finished product.
Before you dive into your discovery of the EXACT tools, technology and professional certification you need to start a bookkeeping business, there is a critical mindset you must adopt.
Bookkeeping is an honorable, time-tested PROFESSION. And while there are currently no laws or regulations in the United States that stipulate you must be licensed, you still must adhere to this truth:
“AS A BOOKKEEPER, I AM A PROFESSIONAL. AS A BOOKKEEPING PROFESSIONAL, I MUST CONTINUE TO DEVELOP MY CHOSEN CRAFT AND EACH DAY STRIVE TO BECOME BETTER THAN THE PREVIOUS.”
As we hold onto this professional’s mentality, let’s now shift our focus to the exact tools, technology and certifications you need.
Above, in the “how much does it cost to start” section, we covered some of the specific pieces of technology and tools you need to start a bookkeeping business.
Right now, I want to discuss the MOST important thing you need: a solid bookkeeping application.
A carpenter’s go-to tool is the hammer. Or, the nail-gun.
As a great bookkeeper, your go-to tool is the bookkeeping application. (BTW: from here out, I will call it your bookkeeping app.)
There is one bookkeeping app that I am IN LOVE WITH. More on it in just a moment.
To begin, I want to give you some qualifications on ANY software you use to serve your bookkeeping clients:
- Cloud-based: you are going to operate a virtual bookkeeping business. That means you can serve your clients regardless of where you or they are located. Never rely upon applications that are location dependent. This limits your ability to serve.
- Military-grade security: you’re dealing with a lot of sensitive financial information. So, it stands to reason that the cloud-based bookkeeping apps you use protect that info at great lengths.
Now that you know the criteria from which to judge bookkeeping and peripheral applications, let’s talk about the work-horse application which I love.
Start a Bookkeeping Business Using QuickBooks®
QuickBooks ONLINE is the bookkeeping software most used by virtual bookkeepers across the globe.
Be sure that when you start your bookkeeping business, you used the online version; not the desktop version.
When you start a bookkeeping business with QuickBooks®, you want to become certified. The benefits in getting this certification include:
- Greater understanding of how QuickBooks® function,
- A listing in QuickBooks® Online professional directory so that you can get referrals, and
- Recognition from your clients as to your qualifications.
Now, just because we learn how to start a bookkeeping business using QuickBooks ®, your learning and development does not stop there. Next, you want to obtain your professional certification.
In addition to QuickBooks Online, there are other small business accounting platforms to consider:
- Xero ®
- Zoho Books ®
- Sage 50 ®
If cloud-based bookkeeping apps are so great, why do small businesses need a bookkeeper?
Yes, small business bookkeeping software is wonderful. These apps take care of the daily number crunching and data entry, but that’s ALL they do.
Bookkeeping apps can not replace YOU. You are an awesome human being, and use the reporting on financial transactions provided by the bookkeeping apps to help your clients improve their businesses.
This is a win-win for you and your client. They get better service, and YOU make more money.
Bookkeeping apps eliminate a lot of the busy work bookkeepers were required to complete…even just 5 years ago… and free you up to deliver premium service at premium rates.
When you take advantage of bookkeeping software, you can:
- Be efficient so you can serve more clients and serve them faster…this means more money and less work for YOU!
- Earn more money in less time
- Live you ideal life / work balance
The ability to go above and beyond number-crunching is crucial if you want to become a great bookkeeper and earn a great living.
The late Zig Ziglar – one of the most brilliant men on motivation and human relationships – said, “People won’t care how much you know until they know how much you care.”
That care will never be replaced by a machine or an app. This is all you as a great bookkeeper!
Remember that the #1 character trait was being personable and caring.
The bookkeeping apps can run the numbers, but only a great bookkeeper can interpret the data, and translate it into simple language that the client understands. And do these things in a personable and caring way.
How do I get clients and make money while I’m starting a bookkeeping business?
We just talked about how to spend money… ICK :(
Let’s talk about how you MAKE money… YAY!
Because, without clients, you don’t have a bookkeeping business…you have a hobby.
There are many ways to get clients. What works for you may be different than what works for someone else, but there is ONE killer way that works for everybody!
It is the easiest and fastest way to get great clients. And the kicker….it’s pretty much FREE!
As of this writing, we are in creation-mode of the ultimate marketing guide for professional bookkeepers. This will be a free resource for those who wish to acquire cool, high-paying clients.
What accounting and bookkeeping services can I provide to small business owners?
Sitting at the core of small business accounting, is the monthly preparation of the three main financial statements:
- Balance sheet
- Income statement
- Statement of cash flow
In addition to the preparation of these three main financial statements, you can also offer add-on services such as:
- Accounts payable management
- Accounts receivable management
- Prepare tax returns and self-employment tax forms
- Prepare invoices
- Payroll services
- Supplemental financial reports like a budget
- Helping to track long-term assets like machinery and equipment
Now, in order to perform these services for your clients, you do need to know accounting and bookkeeping basics, like:
- Double-entry accounting (think of this like a simple formula)
- General ledger preparation (made easier through online bookkeeping software)
- How to classify and record financial transactions
You don’t need to know single-entry bookkeeping, income tax
Starting a Bookkeeping Business: Your Action Plan
Information is useless.
Implementation is POWER!
So, let’s iron out your implementation / action plan…
My first recommendation is for you to take our free training on how to start a virtual bookkeeping business.
- Do the two-part exercise to determine if you have the seven character traits.
- Determine your big “why”.
- Create your bookkeeping business plan.
You discovered why starting a bookkeeping business could be one of the best decisions of your life:
- Bookkeeping is a time-tested, respectable profession.
- It has great income potential.
- Built-in demand (every business must do bookkeeping)
- Ability to control your work schedule and have time for LIFE!
- Work with whom you want
- Determine if you want to do bookkeeping full or part time
- Freedom, flexibility…
And the list of benefits goes on and on.
Bottom line is: take action. If you determine that starting a bookkeeping business is right for you – JUST DO IT! Believe in yourself and you WILL prevail.
We’ve summed everything up on this infographic to download, save, or share.