Have you been looking for a business idea that’s scalable and open-ended – something you can really start from scratch? Or maybe you’ve been doing a little bookkeeping and admin work for a small business, and you’re looking to branch out? Perhaps you’ve been looking for a job that’s flexible and remote, but you don’t really want to work for someone else?
Whatever brings you to the possibility of starting a bookkeeping business, you’re on to a good thing. There’s a reason that bookkeeping, as a sole trader or running a small firm, is the profession of choice for tens of thousands of Aussies. According to government stats, it’s got a high proportion of part-time operators, and a broader range of ages than many similar related professions. The proportion of female bookkeepers also hints at the family-friendly nature of the gig.
So just how feasible is it to start your own bookkeeping business? That’s a three-part question: how achievable it is to get started, how viable the business is in the long run, and whether the timing is right for you personally.
Can you start a bookkeeping business?
The first question is pretty easy to answer. Bookkeeping businesses are labour intensive, but have relatively low barriers to entry in terms of capital and start-up costs. If you plan to operate online/remotely, as a sole trader, and you have a home office setup already, costs may be limited to business name registration, peak body membership, TPB rego (if applicable), and software subscription. There’s a huge amount of variability in terms of how much new sole traders or small business owner/operators spend on other costs, such as marketing. But technically, you can get started for less.
Then there’s the longer term. According to industry projections from IBISWorld, revenue for the bookkeeping services industry has risen over the past five years, and are expected to climb by ~1.1% per year for the five years up to the end of 2025. Research surveying both sole traders and small practice owner/operators shows most (60%) anticipated an increase in revenue in the most recent year on record.
In terms of timing for starting your own business, you’re the only one with the insight to answer that question. But if you speak to small business mentors and advisers, there are a few things you’ll find most of them will say regarding the timing of this important decision. The more of the following align for you, the more likely it is to be the right choice for your situation.
- Right time to leave your current role
If you’ve been working in another role which has come to a natural, amicable end, such as the end of a contract period, you may be well positioned to start working on your own venture. Ideally, you’ve been able to plan ahead and create a savings buffer for after the end of your tenure. This is important for new small business owners in the uncertain initial period of operation. And for some, having a firm start date for setting out on their own can be a powerful motivator. - A great opportunity
As an alternative to starting from scratch, many bookkeepers choose to become franchisees or licensees of larger accounting and bookkeeping services organisations. Some of these organisations have limited intake, only at certain points in the financial year. Others run promotions aimed at strategically increasing their presence in certain areas. These factors may mean that the right opportunity for you emerges at a particular time, with a limited window of opportunity. - Security and support
There are plenty of success stories of small business owners who bootstrapped and did everything on their own in the beginning, with no assistance. But it certainly helps if you’re financially secure and have a good support network around you. Your network may include your partner/spouse, professional mentors, friends and former colleagues who are ready to lend a hand or provide advice. - Feeling confident
Confidence is a key factor for any first-time new small business owner. If you’ve reached a level of confidence in your technical and soft skills, where the prospect of working with clients as a professional service provider is more exciting than intimidating, that’s a good sign that you’re ready.
Once you know whether starting your own bookkeeping business is on the cards for you, it’s just a matter of taking the first steps.
Step 1: Develop the skills
Bookkeeping is benchmarked at skill level 3. This means it requires a skill level equivalent to a Certificate III or IV at a very minimum. While some full-time bookkeepers build up their skills over several years, learning on the job, most undertake a minimum of a Certificate IV in Accounting and Bookkeeping.
Having a qualification is particularly important for independent bookkeepers marketing their expertise to new clients. It’s also part of the essential minimum requirements should you wish to become a registered BAS agent, licensed to complete BASs for your clients. Most professional associations, such as the Institute of Certified Bookkeepers, have membership pathways which require (or preference) the Certificate IV level qualification.
Monarch Institute offers Australia’s most flexible (and most awarded!) bookkeeping courses. They’re ideal for learners looking to balance earning their qualification with their other family, work and personal commitments. Explore bookkeeping courses and make a time to chat to a Course Consultant about your next move.
Step 2: Create a business plan
There’s an old saying that goes “failure to plan is planning to fail”. Having a business plan is a critical first step. But it’s one that a lot of prospective business owners put off, because they think it’s about mapping out every single move and every task they’ll need to undertake when starting up. In reality, it’s about answering key questions, the answers for which protect you from pitfalls and/or set you up for commercial success.
Some of the most important questions to ask up front are:
- Will you start from scratch, buy an existing business, or buy a franchise?
There are pros and cons to each of these three options. Starting from scratch is hard in the beginning, but there are very few start-up costs, and in the end, all the success is yours; you don’t need to pay ongoing fees. Buying an existing business is usually quite expensive up front, but tends to come with an established customer base and demonstrated successful business practices. Buying a franchise is often somewhere between the two; it’s half done for you, and you have the advantage of an established brand, but you need to earn those first clients. - What business structure will you use?
‘Business structure’ means how you operate as a trading business. It’s a legal structure that has important implications for things like the amount of tax you’ll pay, how you draw money from the business (to pay yourself), and more. Your options include becoming a sole trader, forming a partnership, or registering as a company (one or more directors). - Will you require funding to get started? If so, where will it come from?
If you are planning to buy a franchise/license, you may need to pay an initial fee running in to the tens of thousands of dollars. That’s before you pay annual fees, and/or a percentage of your ongoing revenue. If you are planning to be a sole trader, you will still have some startup expenses, as mentioned above. You may also need to plan to cover your living expenses until such time as your business breaks even or becomes profitable. - What employees, contractors or consultants will you need at the start?
If you’re planning to hire employees soon after launching your business, you’ll need to prepare for everything from recruitment to performance management. Even if you’re planning to operate as a sole trader (at least to start), it’s worth considering what kinds of people you may need on your team, as contractors or consultants, to complement your skill set. After all, it’s unlikely (especially with no experience) that you’ll be a whiz in everything from sales and marketing to tech support – and that’s OK!
Business planning doesn’t have to be an extensive or intimidating process. Chances are you already have answers to many of the questions that you answer in a business plan document. The key is getting it all down on paper (or digitally) in a form that’s understandable not just to you, but to other stakeholders who might need to read it. This includes advisors, mentors, potential business partners, and sources of start-up capital.
Explore a simple approach to business planning (plus a handy free template) in our guide on how to write a business plan.
Step 3: Get registered
Once you’ve answered those key questions, you can get registered. You’ll need to register for an ABN (Australian Business Number). If you’re going with a company structure, you’ll also need to register a company with ASIC, and get an ACN (Australian Company Number). If you’re not a sole trader, you’ll also need a new TFN (tax file number) for your business.
Step 4: Get set up
This is where you can start putting more of your business plan into action. To get set up in real life (not just on paper), you’ll need to look at:
- Hardware and equipment: consider whether to use your personal laptop and computer equipment, or buy something better suited to your business needs.
- Software: in addition to the bookkeeping software you’ll be working with, you may need other subscriptions for communication, anti-virus/security, design, marketing and more.
- Phone and internet: chances are you’ll at least want a dedicated business phone number. A new mobile number may be easy to get (using an eSim or with a new phone). A business line (even if virtual), such as a 1300 number, will take longer to source and process.
- Work space: whether you’re working from home, operating from a co-working space, or getting your own premises, it takes time to get set up in a dedicated work space.
- Contractors/employees: you may have identified specific individuals or organisations as part of your business planning process. It’s important to get started on the recruitment or procurement processes as soon as possible. This helps to account for unforeseen delays, and give you plenty of time for decision-making.
Step 5: Win clients
According to those Xero stats from earlier, the average sole practitioner bookkeeper has 22 small business clients. For practices with two to four bookkeepers (including partnerships and small firms), that jumps to 55. It takes time to build up those numbers, through both word of mouth and active marketing initiatives.
Ideally, your business plan will include a concise action plan for winning your first few clients. Now’s the time to put that plan into action. As you ramp up, you may also want to consider expanding on your marketing plans.
Handy resources for building your bookkeeping business
Our bookkeeping, BAS and payroll courses aren’t the only Monarch courses that could help you successfully launch a bookkeeping business. Your pathway could also include a business and management course, a short course in marketing to help grow your business faster, or even a qualification in using artificial intelligence to enhance your business operations.
Monarch Institute is proud to be affiliated with professional peak bodies including the Institute of Certified Bookkeepers, and the Institute of Public Accountants. These organisations both have great resources for bookkeeping business owners.
More great advice and information:
Business Victoria: Information, learning, advice, tools, templates, grants and programs for starting a small business in Victoria
Service NSW: Personalised support and guidance for starting a small business in New South Wales
Business Queensland: Starting a business
Xero: How to start a bookkeeping business
MYOB: 7 steps to start a successful bookkeeping business
