CPA firms are one of the most stable and lucrative businesses on the planet because let’s face it, money matters to everyone. Small businesses, large conglomerates, and even entire governments need CPAs to deal with their finances. And that includes individuals who need help in sorting out their budget and preparing for financial freedom.

So it’s no wonder you’re keen on starting your very own CPA firm. Lucky for you, we’ve outlined the 7 critical steps to help you do just that.

Step 1: Boost your credentials

First things first: you need to boost your credentials. Even if you’re already a licensed CPA, you might want to get a master’s diploma in business administration, marketing, or even psychology to further increase the necessary knowledge and accounting skills you need before starting your own CPA firm. So if you need to brush up on your skills, I suggest you take a refresher course.

Step 2: Secure funding 

After finishing higher education or taking online exams to boost your know-how, it’s time to get to one of the hardest parts of opening up your business: how to get the funding. Perhaps you’ve saved enough for the first few months of operations but let me tell you right now that this will never be enough. You need sponsors, investors, or basically anyone willing to pledge any amount for your business. As an accountant, assuming that you are one, you should know the financial risks involved in starting a new venture. 

Step 3: Know what services you want to offer

There are several specializations in accounting but your new firm doesn’t have to offer them all. You can simply start with bookkeeping or payroll services, or whatever specialization you deem as your area of expertise.

This is to avoid being overwhelmed by all the different departments you have to put together while still learning the ropes of being a business owner. Focus first on what you know best, then slowly expand to offer more services once you get your drift.

Step 4: Do your research

Depending on the city and state where you plan to open up shop, there are certain sets of requirements and permits you have to secure or submit before you can register your CPA firm. These could include business permits, operational licenses, and even building permits if you plan to build a new building for your office space. You have to do diligent research on this because your young firm will definitely get into trouble if you don’t have all the necessary documents required of new businesses.

Additionally, you have to do market research on your target clients and possible competition so you can devise a comprehensive business plan for your firm. Doing this would give you valuable insights as to what your marketing strategy should be, as well as any pain points you can address given what clients need and what your competitors do not offer.

Step 5: Be logical about logistics

Every business owner wants a fancy office, brand new equipment, and a full staff, but you have to be realistic about what you can afford for now. Keep in mind that you can always upgrade stuff later on, but when you fall into bankruptcy before you can even recover your initial investment, it may be difficult — impossible, even, to get your business back up and running, so be wise about spending your capital and any financial aid you may have secured for your business.

Step 6:  Invest in the right people and tools

Being logical about what you can and can’t afford doesn’t mean skimping on things that could help your business grow exponentially. For instance, there are a number of productivity tools you can purchase which may seem expensive at first, but when you factor in how these can simplify your business processes and allow you to significantly cut down the time you normally need to accomplish a certain task, then the investment may well be worth it.

The same goes for the people you will hire for your firm. Keep in mind the old adage: “if you pay peanuts, you get monkeys.” If you want people who will actively make your firm’s culture more enjoyable and productive, you have to be ready to invest in the right people.

Step 7: Affiliate with an insurance provider

Speaking of finding the right people, you have to find an insurance partner that’s right for you. Some big CPA firms offer in-house insurance services for their clients, but this might be too overwhelming for your new firm. Affiliating with an insurance provider means finding a licensed professional who will handle the technical aspect of your firm’s insurance business. 

He/she will mainly be responsible for identifying if there are any clients who need to have their insurance policies updated or upgraded, as well as maintaining the back-end office in terms of recordkeeping, underwriting, and reviewing policies.

Once you’ve done everything on this checklist, you’d be seven steps closer to your goal of starting your own CPA firm. There will be tough times ahead because running your own business is no joke, but you have to keep at it until your dream business becomes a reality.