Term Paper: Starting Up a Small Business

Pages: 10 (2703 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] Can you handle all aspects of the business yourself? Is it the best use of your time to be answering phones, scheduling appointments, sending correspondence and handling general office duties, as well as professional services? If you do hire, be sure to identify specific job duties before you bring someone on board.

In planning for staff costs, consider that you must offer a competitive salary and benefits package to attract and retain quality staff.

You may want to consider part-time or temporary office staff until your practice is established and you can comfortably meet expenses. Once your cash flow reaches the stage where you can meet your operating costs and your personal income requirements, consider the expense of salary and benefits to full-time employees.

Cash Management

Develop a monthly budget. Include rent, utility costs (if not included in rent payment), telephone, email or online service, cleaning and trash services, parking (if not provided), supplies, and postage.

Establish a business checking account with your bank. Do not use your personal checking account for business expenses.

Consider whether you have sufficient personal capital available for your start up period or if you need to borrow money.

Legal Considerations

Before you open for business, be sure to check local, county, and state business requirements and certification. You may want to engage an attorney to assure your compliance with all local requirements and to handle the formal establishment of your business as a legal entity.

Insurance Considerations

Before you begin your first engagement or open your doors to the public, it is important to address your total insurance requirements.

If you are leaving an employed position, you will most likely lose all insurance coverage provided by your employer. You will need to address personal health insurance coverage for you and your family.

As a professional today, Professional Liability insurance is critical. Lawsuits are a fact of life in the business and professional world. You must protect your practice and your personal assets against legal liability resulting from errors or omissions in providing professional services. If and when your practice has employees, Employment Practice Liability insurance protects you against charges of discrimination in hiring, wrongful termination, and other workplace liabilities. And as a benefit to employees you may want to offer Group Life Insurance.

The AICPA Insurance Program offers members a wide range of affordable coverage plans, including:

Professional Liability- Plans that provide comprehensive coverage tailored to meet the diverse needs of CPA firms of all sizes and areas of practice.

Employment Practices Liability- A wide range of services to help firms understand and comply with the rapidly expanding arena of employment law.

Group Life Insurance for Firms- Term life insurance for owner and employees.

Marketing

There are two aspects to marketing your services that need to be considered at the outset of your business planning:

Defining your service

Reaching prospective clients

Your marketing plan needs to define the kind of accounting services you will provide. Do you have sufficient experience to provide many areas of service or are you more narrowly focused? Will you serve private individuals, businesses, or both? Can your local area support your business or is it already crowded with other firms? Is there a niche that you can fill that your competitors are not serving? Knowing the needs of your prospective marketplace is critical to success.

Once you've determined your services, you need to communicate with your prospects. Get business cards printed as soon as you determine your office location and phone number. Get listed in the yellow pages of your local phone directory. Since phone books may only be printed annually, it is important to know when the next book is printed and get your information out on time. You may want to consider an announcement ad in your local newspaper, or a mailing to a compiled prospect list. Networking also plays a critical role in marketing, particularly professional services. Pass the word to family, friends, and business associates about your service and ask that they tell others.

Consider joining your local Chamber of Commerce or other business associations. This provides networking opportunities and many times marketing support as well. Contacting clients that you served while in the employment of others can be precarious. Be sure to use discretion as this may alert your employer to your self-employment intentions, negatively impacting your planning and financial set-up stages. There could also be legal implications. It is better to hint at your intentions and let the client follow you rather than make a solicitation.

Finally, once you have identified your services and market, you need to establish a pricing schedule. This is often the most difficult aspect of running a business. Your price must be competitive with other CPAs, low enough to attract new clients yet not so low as to undercut your revenue requirements.

VI. CONCLUSION

Establishing your very own small business in the accounting/CPA field can and is an extremely challenging yet rewarding experience. It is of utmost importance that you consider every aspect of the business before you begin.

Again having a good reason behind your project is the first key to business success. Know what you want and how you plan to achieve it.

Second, motivate yourself, without intense motivation the success of your business may be in jeopardy. Find strong people to support you. Create good relations with your financial partners and ask many questions. Once you are set up starting your own business you must then begin by creating your business plan. The outlined steps are key for both a good business and to acquire financial backing.

Remember that starting your own accounting firm has many benefits. One of the most important is the control you will have on your future. Statistically your likelihood off succeeding in this field is quite high. Many people enjoy working with a small firm where they get to know the staff and create a bond.

Be a strong leader and role model for your staff. Model what you would like to see from them. Work hard, be positive and stay motivated, market yourself properly and you will inevitably succeed in starting your own small business.

Bibliography

Goldwasser, Dan L. "Independence in a Changing Accounting Profession." Retrieved at http://www.nysscpa.org/cpajournal/1999/1099/features/F461099.htm. onJuly 25, 2002.

Solomon, Rick. "Practice Development is Key." Retrieved from subvert=pracdev&more=story&layout= on July 25, 2002.

Advisor Spotlight: Mike Crosa." Retrieved at http://www.intuitadvisor.com/colleagues/spotlight/spotlight_mikecrosa_mar02.html. onJuly 25, 2002.

How to Start a CPA Practice Handbook." Retrieved at http://www.ohioscpa.com/member/Resource/start_practice.asponJuly 25, 2002.

SBA: Starting Your Business- Business Plans." Retrieved at http://www.sba.gov/starting/indexbusplans.html. onJuly 25, 2002.

Small Business Advice, Free Business Plans, Start Up, Ecommerce, Marketing, Sales and Web Site." Retrieved at http://www.sbishere.com/onJuly 25, 2002.

Stand Out After You Start Up." Retrieved at http://finance.pro2net.com/x33126.xmlonJuly 25, 2002.

Starting and Building an Accounting Practice." Retrieved at http://accounting.smartpros.com/x6646.xmlonJuly 25, 2002.

Starting Your Own CPA Firm." Retrieved at http://www.cpai.com/busneeds/syocpa.phponJuly 25, 2002.

Tips." Retrieved at http://www.afdcenter.com/Tips/tips.html. onJuly 25, 2002. [END OF PREVIEW]

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