The Demand for Accounting Services
In today’s increasingly digital and mobile age, business trends are changing more rapidly than at any other time in history. Some services that appeared to be in a perpetual growth trajectory just a couple decades ago are now at or near the point of obsolescence. One prime example is the video rental business.
The impact of the rapid economic changes in the accounting world has been mixed. On the surface, it appears that the more basic accounting tasks, such as individual tax return preparation, have become automated to the point that many consumers can do them on their own or with the help of software. On the other hand, the rise of outsourcing has brought growth in other areas of accounting, such as payroll services.
Overall, because of the increased sophistication and complexity of the economy, the demand for CPA/accounting services is expected to grow in the coming years. The main reason is due to the rise in small businesses. With the economy becoming more specialized, an increasing number of entrepreneurs are entering the marketplace. They are starting businesses ranging from mobile mechanics to Web developers to home organizers and hundreds of other specialties.
The challenge for entrepreneurs and small businesspeople is they have little to no knowledge of bookkeeping, payroll, accounts payable/receivable, and overall tax compliance. In order for them to survive and thrive, they need a tax professional to provide expert advice in these areas.
Entering the Accounting World
For CPAs that want to cater to the need for small business accounting services, this is a great time to enter the marketplace. There are a several ways you can go about this. If you are a relatively new accountant, it may make sense to go to work for another firm for a while, so you can gain a better understanding of the business and how it works before going out on your own. If you are ready to get into your own CPA practice, you can start one from scratch, partner with a franchise brand or purchase an existing firm.
Starting from scratch is the least expensive way to get into the business. However, you will likely face an uphill climb building clientele and reaching the point of profitability. Franchising an existing CPA business model gives you training, support and a proven business plan in exchange for a franchise fee. Going this route, you are still starting from scratch, but with much larger upfront investment and a clearer path to viability.
If you have the funds or can obtain the financing, perhaps the best way to enter the accounting world is by purchasing an existing CPA practice. Buying an accounting firm, and hopefully one with an established clientele that is already profitable, can save you years of struggle trying to build the practice on your own. Buying an existing practice is not a guarantee you will be successful, however. Before proceeding, it is always best to work with a business intermediary, particularly one who specializes in accounting practice sales. This will give you valuable insights on the process and help ensure you are buying into the right business to fit your skills and budget.