Qualified Accountant setting up new practice

diamondtooth

Hi all,
I'm a qualified ACA accountant with the required experience to apply for a practice certificate and set up as a sole trader.
However do you think this is a good idea in the current climate? Also the main issue for me would be building up a good group of clients.

It would not take a big number of good clients to cover my current PAYE salary so I think it would be a good option. Do CA Ireland ever sell blocks of clients?

Any tips would be great! Thank you!

smcgiff

diamondtooth wrote: »

Do CA Ireland ever sell blocks of clients?

How could CA Ireland sell clients?

You can buy clients, usually from partners looking to exit a business. It is expensive and there's no guarantee the clients will stay with you.

Re getting clients from scratch, would you consider yourself a good salesman/networker?

How tough is it... are you coming from practice or industry?

Do you have a number of clients that you can rely on to go with you?

diamondtooth

Sorry I meant, would CA Ireland pass on details of members who are retiring (for example) from practice and would sell their client list.

Yes I'd consider myself a good salesman/networker. I enjoy that side of work. Sitting behind a desk from 9-5 for someone else does not appeal to me. Meeting people and providing a good service would motivate me, amongst other things.

I would be coming from industry. But have quite a few years practice experience also. I have some clients which may come with me but it is hard to say at the moment because I have not told them of my intentions yet. I certainly have work to do in this area before taking the plunge!

Also surely a big issue would be having 'problem' clients which take more time than their fee may be worth.

smcgiff

diamondtooth wrote: »

Sorry I meant, would CA Ireland pass on details of members who are retiring (for example) from practice and would sell their client list.

Yes I'd consider myself a good salesman/networker. I enjoy that side of work. Sitting behind a desk from 9-5 for someone else does not appeal to me. Meeting people and providing a good service would motivate me, amongst other things.

I would be coming from industry. But have quite a few years practice experience also. I have some clients which may come with me but it is hard to say at the moment because I have not told them of my intentions yet. I certainly have work to do in this area before taking the plunge!

Also surely a big issue would be having 'problem' clients which take more time than their fee may be worth.

Being a good networker/salesman is important if starting from scratch.

Just price yourself out of the market if you think a client would be a problem.

Not sure about CAI, but you'll come across them occasionally in newspapers. If you've a lot of money it might be an option.

I'd say it's quite tough out there, but there's always room for another good {insert profession here}.

diamondtooth

My problem is that ideally I don't want dozens of smaller clients with fees of say €500 each. It would be hard to build a strong income with that type of client.

Would it be hard to get larger audit exempt companies as clients? I have no problem meeting companies, networking, advertising in the right places, but it would need to pay off. How likely would it be that companies/clients leave their existing accountant to move to a new one?

I know these are not answerable questions! But it is interesting to have the discussion! Thanks for the replies!

smcgiff

diamondtooth wrote: »

My problem is that ideally I don't want dozens of smaller clients with fees of say €500 each. It would be hard to build a strong income with that type of client.

They're the ones you're more likely to get if you start off unless you buy a practice.

diamondtooth wrote: »

Would it be hard to get larger audit exempt companies as clients?

With the audit exemption you're talking mostly large companies and they would not consider a one man audit firm or one with no recent audit experience.

dbran

Hi

I think that you need to think carefully before you take the plunge.

Taking on "problem" clients is always a risk and the problem is that you do not know they are problem clients until you have taken them on!! However you should be old enough and wise enough to spot some of the worst offenders from the get go and to avoid even wasting time meeting them or responding to them.

As regards your preference for clients, if you are setting up on your own you take what you can get. Some may be messy but if they appreciate your work and pay your fees then they are good clients. You may be lucky and pick up a larger client from time to time which is a bonus. I would not count on them coming to you unless they know you already. The things that will go against you in this regard amongst other things would be the level of resources and knowledge that you have at your disposal. Such larger clients will not be willing to take the risk of moving to you rather then a larger firm. This will not stop them asking for a quote from you so that they can be sure they are not being ripped off and meeting with you even though they know they will not be going with you from the start. Honestly, I would prefer a dozen clients for €500 rather then a large client for €6000 any day in terms of required resources, risk of not being paid etc

Networking is great but you need to accept that you are going to have to work at things for a while before you get any work from them. You will also meet a lot of people who are just looking for free advice and will wast your time. Again, you should be wise to this and decide when to persue things and when not as they will suck in a lot of your time if you let them.

So basically, if you are not bringing clients with you, unless you get a very luck break it is going to be a long hard slog. It can be done because I started off 4 years ago with no clients and built up contacts bit by bit to where I am today. The fact that you are coming from industry would make it even harder however as you will have to know current tax issues and call on skills you may not have used for a while.

Hope this helps and best of luck with and if you have any other questions do send me a PM.

Regards

dbran

kennyb3

^^^

Great post.

This is something I've considered for a long time now (I'm 9 years working in practice), but have always got cold feet - mainly as I've never had the funds to finance the initial period until I start getting fees in (I reckon you'd need a years salary at least to be safe). I now find myself with a mortgage and 2 kids so it's even less likely. And I wouldn't feel comfortable trying to take a portion of current clients with me as my boss has always been very good to me.

I have been offered a partnership in my current firm (currently a sole practitioners) but there are complications with that too - there is another manager who is there nearly 20 years who hasn't been offered this, so that could be complicated and my boss sees a lot of things differently to me, so I'm worried how it will work out, and there is an aging client base.

I eventually need to make some sort of decision as at the moment I feel like I'm going stale (9 years in one firm, the hours are handy and the pay good - just un-stimulated) and going through the motions. I either need the motivation of being in for a cut of the profits or need to change jobs - likely into industry as not sure moving practice is the way forward given partnership is surely the ultimate goal and I've already been offered one of those! I've come close to moving practice a couple of times, once being offered the job but eventually turning it down (as it was then my boss offered me the partnership).

I guess either way I'm just afraid of making the wrong decision and keep putting the decision on the long finger.

Any thoughts/advice.

I often wonder is there sufficient money in it going alone for the risk - like would you comfortably earn more than a regular audit senior/manager in a regular sized practice?

smcgiff

Hi Kennyb,

Well, if you are partner then it'd be your job to get new clients in - how much more stimulation to you need?

Moving to industry would be tough after 9 years in a well paying practice job. What job are you likely to get in industry without industry experience? Unless you've contacts it's likely to be at a low level, possibly even starter. That'd be a big jump down from partner.

Without all the facts and how difficult you'd find it partnering with someone that "sees things differently" to you is only something you can decide.


However, by going the partner route you'll have an option to build up your own client base in case you feel the need to go solo down the line.

Going the partner route seems like the best option to me. The world's your oyster then, and you can make it as stimulating as you want. Go get them clients!!!

As for the manager that's there 20 years. Well, not everyone is made to be a partner. Why doesn't the existing owner not consider him partner material? Can he bring clients it? As a partner you can make his life better, more money etc.

dbran

Hi Kennyb

I guess it depends on what your gut instinct tells you and exactly what is stopping you taking up the opportunity at the moment. If you have been in the practice for more then 9 years it is likely that you have an in depth knowledge of all the clients, (which are good and which you could do without). You should also have a fair idea as to whether there are any skeletons in the cupboard or regulatory issues you need to deal with.

What is the package? Will you have to buy into the practice? Will you be a salaried or equity partner? Presumably nothing will actually change as you will essentially be managing the same clients and staff. But you will also be tasked with getting in new clients and driving the practice forward. This can be exciting but also frustrating and time consuming. You will also be taking on the additional responsibility of making sure that the practice stays healthy and viable and that everyone gets to keep their job and has work to do. So you need to make sure there is sufficient reward for you to take on all of this.

Not everyone has desires to be a partner and after 20 years the other manager may be happy with their lot. But beware as such people do not like change at all and can be deep routed in dogma. You say that your boss sees things differently to you and you becoming a partner may mean a change in how things are done.

Just my thoughts

Best regards


dbran