Last week, after inviting bookkeepers in my free Facebook group The Business of Bookkeeping to share their bookkeeping origin story, I talked about my own bookkeeping journey; from starting a bookkeeping business from scratch, to building it up and selling it 8 years later in order to move into business coaching.
I promised at the end to share my thoughts on what it takes to build a successful bookkeeping business; on what I consider to be integral to the growth, profitability, and sustainability of a bookkeeping business.
What started as a quick article has turned into over 1700 words. What I've written is really just the tip of the iceberg, but I think it's an accurate overview of the main things to consider, without sending you all into overwhelm.
Here are my 7 insights into what it takes to build a successful bookkeeping business. Have a read and if you want to discuss any of it in greater detail, head on over to the Facebook group.
When I started my bookkeeping business, I was very clear that I was building a business and not just creating myself a job. I had a vision of what it would look like, of what I was aiming for. The decisions that I made along the way very intentionally supported that vision.
It’s one thing to go day by day, doing the work and keeping your clients happy. You may well grow your business that way as well, as you get referred business.
But when you’re clear about what you’re aiming for and the direction that you’re heading in then you will find that the decisions you make become a lot more purposeful and intentional.
Without this direction you will likely find yourself at some point feeling a bit stuck and a little lost, juggling client demands, workload, and the needs of your team, and wondering what to do next.
If you haven’t done so already, sit down with a pen and paper, or your laptop or whatever, and write out what you want your business to look like in 3-5 years. Think about your environment, the people around you, your place within the bookkeeping and accounting industry, the services you offer, and the clients that you work with. What does it look like? How does it feel?
Once you have that picture, start to write down all the things that need to fall into place between now and then for that vision to eventuate. What systems, skills, and resources will you need to make that happen?
The sooner that you get your internal systems and processes working efficiently, the better placed you will be to grow your business sustainably.
Having robust systems means having streamlined, efficient and effective processes, often supported by technology.
Your technology should always support and facilitate efficient processes, not create more complexity and work.
If you feel that this is an area that feels a bit chaotic, start by mapping out your processes on a whiteboard or a piece of paper. Look for anywhere in the process where you are duplicating effort, where it seems needlessly laborious, where your process is not clear enough, nor providing the desired outcome.
Then start brainstorming what would be better. Is it tech that you need? More well-thought-out and clearly documented processes? Research your options and get specialist help if you need to.
Bookkeeping is ultimately a people business.
Even if you are the most introverted of all of us you will likely feel alone and lonely at some point if all you are doing is sitting at your desk for hours on end processing the numbers.
You will also undoubtedly need to communicate effectively with your clients.
We need to have good people around us.
By good people, I mean the clients that we work with and the team members that we bring into our business.
I was talking with a bookkeeper recently who rated her passion for her business as a 5 out of 10. When we delved more into why this was, and what it would take to make it a 10 out of 10, the answer lay in the type of clients that she was working with.
I asked her to think of her worst and best client(s), and then to consider that if the business only had best clients, would she love her business more? Could it be a 10 then? The answer was yes.
Our work relationships and the joy for our work boils down to feeling respected and valued. We want to work with clients who respect and value us. We see this in the way that they talk to us, the demands they place on us, and when they pay us on time and without question.
Surrounding ourselves with good people also applies to the team that we bring into our growing business. I have so much more to say on this topic than we have space for today, but the key message here is to hire well.
Hiring well means scoping out the role well in the first instance and not settling for ‘good enough’ when you’re feeling so overwhelmed that you think that any bum on that seat will do.
It means finding someone who not only has proven skills and aptitude for the job, but who also has personal values that align with yours, along with a positive attitude and a growth mindset.
Bookkeepers are so good at keeping an eye on other peoples' numbers but, much to my surprise, they sometimes neglect their own. It’s a classic case of the builder’s house never being done.
You don’t need me to tell you that this needs to change if you want to build a successful bookkeeping business, but I’m telling you anyway. Look at your own numbers, regularly and often - ‘nuff said.
One of the best pieces of advice I had early on in my bookkeeping business was protect your margin. Bookkeeping margins are not the highest in the first place so if you get nothing else from this article please take away this. You need to know the gross profit margin you are aiming for when you have other bookkeepers working for you, and you need to protect that margin when quoting for work.
It is so tempting to take anything you can get in the early days of business, but the aim is not to have revenue growth at all costs. You don’t need every client and if you’re winning every job then you’re probably undercharging.
Remember, you want clients that respect and value you, and in my experience the ones that demand a cheaper rate are often the ones who don’t.
Resist any urge to discount. Know and protect your margin.
The number of bookkeepers I talk to who feel sick to their stomach at the mention of sales is huge. In my blog Sales is not a Dirty Word I talk about this idea many have of salespeople being disingenuous and pushy, but the definition of sales is pretty simple and it’s not that. All it is, is the act of exchanging a commodity or service for money, and about providing good-fit solutions to the problems and issues of others.
In business you need to put consistent effort into your sales and marketing. Continuously promoting your business’s services gives you a steady stream of leads and referrals which in turn allows you to be picky about the clients that you choose to work with.
Marketing is a bit like a moving train. To start with it’s a bit of an effort for dubious reward, but before too long your train gathers speed and momentum and it becomes a lot easier.
The sale is the pointy end of your marketing efforts. If you’re not sure how to approach a sales conversation then check out my blog Sales Conversations for Bookkeepers.
I seem to live my life between “fake it ‘til you make it” and “don’t make a dick of yourself.” The gap between those points is where learning occurs. Learning is where improvement and growth happens.
I credit curiosity and an openness to learning as one of the biggest drivers of success in my life.
I’ve been part of the bookkeeping industry for more than 13 years now and I am still learning new things all the time. And I love that!
Always listen and look for nuggets of knowledge, even in a situation where you’re considered the expert. Never assume that you know it all already, or that you know more than the person that you are talking to. I’ve picked up knowledge and wisdom from the most unlikely sources.
The gold can be found in your conversations so ask questions and seek to understand.
Everything is a learning opportunity, even, and perhaps especially, mistakes and failures.
This is one of those last but certainly not least things.
As with anything worth striving for, your bookkeeping business will feel hard sometimes and there will inevitably be hurdles and pitfalls that come along the way. There have been plenty of times when I’ve questioned what I’m doing and why and thought about throwing in the towel and just going to get a job. I know I’m not alone in that. I bet you’ve had that thought from time to time too.
It helps to have your vision and your people and your systems and your profit, but even with all of that there will be days when it doesn’t seem worth it.
On those days you need to be strong and to draw upon your reserves of drive, determination and tenacity. You need to revisit your why and your vision and then eat healthy food and get a good night’s sleep so you can get up again in the morning with the growth that the learnings of the day behind you, and take another step forward. That’s showing courage right there.
If you think you might need help implementing your plan, from a bookkeeper business coach who’s been there and done that before, then reach out. I love working with bookkeepers, transforming bookkeeping practices into thriving businesses.
My vision is a world where businesses, including yours, provide a decent living and work sustainably for everyone involved.
As a bookkeeper, you have an amazing opportunity to affect a huge positive difference in the lives of your clients, and in your own lives as well.
The ripple effect of making this happen worldwide cannot be understated.