The Ambitious Bookkeeper Podcast

How to Start A Bookkeeping Business

February 16, 2022 Serena Shoup, CPA Season 1 Episode 36
The Ambitious Bookkeeper Podcast
How to Start A Bookkeeping Business
Show Notes Transcript

In this solo episode I’m giving you 4 steps (and several sub-steps) on how to get started with your bookkeeping business as a freelancer or side-hustle before you decide to take the leap from corporate.

Resources Mentioned:
The Bookkeeping Biz Workshops:

Proadvisor Marketing Podcast Episode

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36 - How to Start A Bookkeeping Business

[00:00:00] Serena: Everywhere you turn, people are talking about the great resignation. To me this means two things: there are an abundance of new, small businesses, 4 million in 2021, according to, which is the organization that mentors people who receive SBA loans. So that means there's a 4 million new business applications that the SBA even knows.

[00:00:25] And number two as an employee, you have leveraged to negotiate different circumstances while you build your bookkeeping business, which we touched on last week with my guests. Neil, if you haven't listened to that episode, please go back and listen to that after this one. 

[00:00:40] Now who should start a firm. It's not just a matter of getting a laptop and setting up shop at a Starbucks, which I did hear the guys on the cloud accounting podcast say, and I just had to chuckle to myself. There's a little more to it. You have to decide, are you wanting to be a freelancer and still operate as the technician? Or are you trying to build something bigger than you? You don't have to decide right away. In fact, I encourage you to dip your toe in and start small to test things out. So today I'm going to talk about how to do that.


[00:01:42] Serena: Let's get into how to start a bookkeeping business. Step one, I want you to join I want you to build a profile and set up some saved searches related to your skillset, showcase your accomplishments in the roles that you've held. Are you comfortable with AP and AR? Look for those keywords. Are you or were you a controller and want to try doing that part-time? Save that search. Are you an expert in QuickBooks online, or want to be? Save a search on QuickBooks online or QBO as a keyword. 

[00:02:15] Step two: apply daily and get a practice client. I'm not going to make this an episode about how to get clients on Upwork since I teach that in the bookkeeping business accelerator, but this is how I got my first chunk of clients. And I know many other bookkeepers and accountants who started out on Upwork or still use it even for fractional CFO services. There's an art to getting good clients on here, but even if you get a not great client on here. It's great experience and we'll give you clarity on the types of businesses you do want to work with, or don't want to work with.

[00:02:49] Everyone needs a practice client, even if you have years and years of experience, because undoubtedly your battling with the feelings of: am I experienced enough? Or do I know enough to help small businesses? The best way through that is jumping in and figuring out. After your first practice client, you will have built up confidence and clarity on moving forward and looking for more clients, a small warning though. Notice I'm not giving you the option of opting out of this and thinking it's not for you yet, because you are likely to get some terrible clients at the beginning, especially if you're coming at it with desperation. So don't make the decision quite yet. Sometimes having a bad client can disguise itself as you not knowing how to do your job. When in reality, you took on a client that needed more than you had the time to give them, or had complexities about their business, but they didn't give you the information that you needed to be able to complete the job or even understand how to handle it. So you're not allowed to give up in step two.

[00:03:54] What you should do instead is evaluate what went wrong. Ask yourself the question. If I were doing this same work for someone with a different style or personality, would it have been a success? Did I have all the information I needed from the client to make this a successful job, then tuck that failure into your back pocket and use it to help you screen clients in the future, or to ask better questions and get commitments from the clients or to shore up your contract, which we're going to talk about in a minute.

[00:04:28] Step three: decide to keep going. If you're now at the point where you've gotten a client or two under your belt, the decision is now, do I want to keep being a freelancer on Upwork? Or am I ready to create more of a business? If you're ready to go in that direction, it's time to sit down and set some intentions or some goals.

[00:04:52] Number one: how much money do you need or want to make? Number two: what type of client do you want to work with? I'm not talking industry. Although if you have one in mind, that's helpful during your practice client phase, you likely will gain clarity on certain values that you need to make sure that you and your clients are aligned on. Write those down and write down your deal breakers. Number three: do I want to focus on a single software? My recommendation here is to make this decision or to decide when you will narrow that down, it will keep your business so much more simple. If you just decide on one software to provide bookkeeping services. If so now is a good time after you've been working it for a bit to go ahead and get that software certification, but not because it will help you get clients. I want you to get the certification so that you know, that you're using it to its full potential and can help your process. And so you can have the benefits that come along with them, usually like a partner dashboard, software discounts, and other perks. 

[00:06:01] If you've decided to keep going, it's time to make things legit. So step four is to make it legit. I'm going to go through a series of bullet points here. In the show notes, there is a link to actually download this as a checklist and it goes into way more detail. So I encourage you to do that. You can also go to

[00:06:24] All right, let's get into it. Number one: create an engagement letter. You'll fine. Tune this. When you realize you should have had something in writing, but if you're a member of the AICPA or have insurance, which I'll talk about in a sec, you'll have access to templates and that's a great starting. 

[00:06:41] Number two set up your LLC. You don't need to create an S Corp or a C Corp. At this point, you could even just be a sole proprietor if you wanted and change to an LLC later. That's what I did. I decided when I hit a certain revenue number, I then become an LLC. You don't need a lawyer to do this. If you're a single member, LLC. Now, if you're going to be doing a partnership or structuring it in a C Corp or an S Corp way, you definitely do want a lawyer. But if you're just going to be a single member, LLC, go to your secretaries of state website where you're located. Don't be doing this like Delaware LLC stuff. Okay. If you're not in Delaware, don't sign up there, register where you're actually located. And there's usually a very good, straightforward instruction, checklist for your state on what you need to look at and where else you need to register. So make sure that you check for all of your other local licenses. You might need to operate some places i think-- in orange county or LA county, you have to register as a home-based business. It's a separate type of business license. So just check for those things. 

[00:07:48] Number three, you might be asking, wait, what about my name? I need to figure out a perfect name for my business and I hear you, Ms. Perfectionist, If you have a name great. You don't need this pep-talk. If you're unsure and have no ideas, go listen to episode number six of the Pro-advisor Marketing Podcast for ideas on how to come up with a name for your. Or a little more tough love here. You can just decide that the name like a website is just an excuse that's holding you back. You can use your own personal name and do a DBA later, which is doing business as later. If you want to do that or do a name change. It's not that complicated. When I started out, I started out as Serena Shoup CPA. And then I changed to Shoup CPA as a DBA. And then I changed it because I wasn't even an LLC yet. I just created a DBA. Also if you're a sole proprietor and you are operating with your name and most places, you don't really even need to register anything, if you're using your own name that's on your birth certificate, you don't have to register that. And then when I created my LLC, I was Serina Shoop, LLC. And then I went through a name change and decided to do a DBA under that. And so I changed into Of Course Bookkeeping. And let's be honest here. I still have like, Hmm, do I want to keep that name or change it? And it's like, It doesn't matter, people, it really doesn't matter. Just pick something and go, don't let that hold you back. And don't let that be the reason that you're not registering your LLC and you're not going out there and getting clients, it's such a small piece of it. 

[00:09:25] Okay. Number four, create an EIN. Even if you aren't an LLC, you can get an EIN and I highly recommend it. It's free on the IRS website, and this is something you'll likely need to guide a client through at some point. So it's great practice. 

[00:09:41] Number five. Open a dedicated bank account and start using your software of choice for your own books. We preach it to our clients, so you've got to walk the talk and y'all know I'm going to plug Relay for this one. Right? So there's a link in the show notes. Please pretty, please use my link to sign up if you decide to sign up with relay, it's super easy and yes, it's an affiliate link. So I will get a small commission. You will have to have your LLC set up first for a business account, or your paperwork of your DBA if you're operating as your own business. Right. So you'll have to have some sort of paperwork That signifies you're a business. So whether it's a business license, if you're a sole proprietor or something. 

[00:10:25] So number six, get business insurance that is for accountants or bookkeepers, scroll back and listen to episode 23, where I interviewed Jock Wols, the owner of Risk Desk. He's an insurance broker who works mainly with professional services like bookkeepers and accountants. Please don't skip this. Once you have clients. I got insurance as soon as I landed my very first client on Upwork, I didn't wait until I had my LLC or multiple clients. I got insurance as soon as I had one client and knew I could pay for it. And it's a necessary business expense, okay? 

[00:10:59] All of these steps on making your business legit, like I said, are laid out in more detail on a free download I've created just for you. And you can get your slash checklist or from the link in the show notes. 

[00:11:12] All right, let's move on to step number five. This is the last one. Step five is grow. You're Like what the heck Serena? Give me something more tangible. Once you've got things in place and are starting to feel a little more legit.

[00:11:27] It's time to start figuring out your next move. Where will you get more clients? How will you pray? Are you still a little overwhelmed with the tech? Are you still struggling with imposter syndrome? I help with all of these questions in my various programs, but if you're listening to this in real time, I'm going to invite you to join me in the Bookkeeping Biz Workshops as your next best step. It's a great way to figure out if you'd like working with me as your mentor before making a huge commitment. So go to, the link is also in the show notes. I know you really wanted more tangible steps in step five on what you should do next, but just depends on what your goals are and where you want to take things. And that's why I invite people into my programs to have guidance. So if you're interested in working with me, the BK Workshops are going to be a great next step. 

[00:12:20] Now next week on the podcast, I'll be talking you through some of the fears that I help people through when starting their businesses. So make sure you tune in there as well. And we'll be actually dropping a bonus episode too, but that topic is a surprise. As always, I hope this episode was helpful. And if you enjoyed it, I'd appreciate if you went to Apple Podcasts and rated and reviewed the show. Tell me what you think. Share the episode with a friend or a coworker who's in accounting and I'm so grateful that you tune in each week to hang out with me, talk to you soon.