January 11, 2022 at 9:31 pm #3309451
So, I am working at a small firm. And like many CPAs, we have our own side hustle for which we provide services; bookkeeping and taxation services in my case. I of course cannot justify bringing clients to my firm because we would have to charge triple what I'd charge individually making it harder to bring on clients, and the my profit would be much lower.
I do fairly well in my hustle; by fairly well I mean a few hundred in profit. I would like to grow, but not certain if I can start a simple website to have an online presence. Advertising more so would be helpful.
Have any of you done this while working as a full time employee at your respective firm?February 13, 2022 at 8:31 am #3309871SeattleCPAParticipant
Three comments about this idea from someone who focuses on web-based marketing of his CPA firm and who manages a small five accountant firm:
1. If you're on path to running your own CPA firm–sounds like you are–you want the website to be a CPA firm site. You may even want to use the dot cpa domain. At very least, you probably want “cpa” in your domain name. But you surely can't do that until you have a firm license. So that's a problem.
2. Running a side hustle would disqualify you from working at our firm and many others too. Mention that because if a firm owner learned about your side business, that would probably either end or stall your employment at your current firm.
3. Pricing CPA firm services at a low rate is a mistake. That's a terrible strategy. Service businesses can't scale up. You never make it up on volume. Rather, the end point of that story is a sweat shop business. The private online CPA forums are full of people who make this mistake and live the nightmare. The right strategy if you're planning to start your own firm is the build skills and reputation for selling a premium service at a premium price.February 14, 2022 at 9:55 pm #3309895
@seattleCPA Thank you. number 2 is most relevant, although I do disagree about side hustles. At a prior firm, a bunch of accountants had their own side hustles. It makes sense, as the firm would only provide a ten percent bonus on the billings. This is far too low to justify, especially when the firm charges absurdly high rates making it harder to bring them in. Touching up on number 3, I and others do not charge low rates, simply lower than out employers: as out overhead and costs would be much lower, it is more profitable.
But I do understand why employers would not want you to have one, although it may not be enforceable. I will avoid creating a website to avoid getting discovered by my employer, or future employer.February 16, 2022 at 8:07 am #3309910SeattleCPAParticipant
One of the giant problems for most CPA firms is undercharging. It's endemic.
So chances are, your employer isn't gouging. Chances are they're undercharging. Just statistically, I mean.
And if you're really charging a third of their prices? Sorry, I can't see how you're not undercharging.
Note: I'm keying on your statement that about current firm charging “triple.” So, to me, sounds like you charge a third of what they do.
BTW I would expect the clients you're charging 1/3rd of the going price probably love it. But my sense of reality is, most individuals and even many small businesses and nonprofits can't actually afford to pay for quality professional services.
One of the big tricks to succeeding in a professional service firm is to build a rooster of clients who will pay the prices you need to get to make your business work well. And I am pretty sure most small CPA firms fail to do this. (If you're interested in a more detailed discussion of this, search on “small CPA firm profitability” and then my name, “Stephen L. Nelson” and you'll get to a blog post that mashes up AICPA firm survey data with government economic data.)
truly truly though… Good luck building your practice and with your journey in the profession. FYI, I think salaries in CPA firms are headed up. Maybe especially for tax folks. Talent shortages and growing demand only mean good things for professionals selling their skills and talents.February 21, 2022 at 1:49 pm #3309940TncincyParticipant
I agree with SeattleCPA. The points indicated are the points to really consider. I have run my own business for over 25 years and I can agree that undercharging is a terrible mistake. The only way to recoup from low prices is volume. Most times short cutting the price to get customers in the door is a headache. These customers will always want you to go over and beyond, and they don't cooperate very well. They will want more and more until you have to just cut them off. Then. there is another problem. So now everybody that knows you're charging a third of what other firms are charging, WILL want that third FOREVER. The client won't want to hear about quality and the etc. So don't sell yourself short. I have learned through experience, not to give my time, paid for education and license away. (I don't have my license yet, but I'm getting there.)
Also, make sure there is no non-compete clauses with your current firm. Some firms have a non-compete, while you work for them and if you leave. So make sure there is no non-compete clauses to keep from being sued.
I would not create a website for a firm unless you are planning to leave the current firm, or they have a perfectly clear understanding of what you are doing. This is totally different from doing taxes for family members, or keeping the books for your local church. You become competition to your firm once you create that web-site offering CPA services for all to see.
It's exciting to put your experience and knowledge to work by starting your own firm. But believe me, if you want respect as a professional, you must present your firm as a professional service, not some person desperate for money, or client poaching from your current firm. Unfortunately that's how people will treat you if you're too cheap.February 21, 2022 at 10:18 pm #3309946
Inputs are certainly appreiciated. I understand where you guys are coming from when it comes to pricing, and I agree. I certainly will not sell myself short.
I also will not be creating a website, as I cannot be exposed.February 21, 2022 at 10:18 pm #3309949
Inputs are certainly appreciated. I understand where you guys are coming from when it comes to pricing, and I agree. I certainly will not sell myself short.
I also will not be creating a website, as I cannot be exposed.
Can I create a firm website while working at another firm?
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