Starting a CPA Practice

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  • #1559337 Reply
    RWCPA
    Participant

    Has anyone gone out on their own as a side gig? I work in private industry as a Senior in a publicly traded company 2.5 years and worked in public as an auditor and a tax preparer for about 3 years. I am thinking about starting a CPA practice working nights and weekends. I'm thinking I will start by focusing on individuals and small business returns. Try to pick up some book keeping work as well. I am curious if anyone has taken this route and been successful. Any advice would be appreciated.

    C.an P.ass A.ttitude
    #1559437 Reply
    SeattleCPA
    Participant

    You can do this… but it's probably tricky to make the model work really well using that format.

    You might find this interesting: https://evergreensmallbusiness.com/small-cpa-firm-profitability/

    I don't really remember my CPA exam scores. I've been a CPA for decades... I run a four CPA firm in Redmond WA. I'm the author of a bunch of books about small business accounting including QuickBooks for Dummies and Quicken for Dummies.
    #1559485 Reply
    mtaylo24
    Participant

    subscribed

    CPA (2017)

    REG:  75

    BEC:  76

    FAR:  77

    AUD: 78

     

    CMA (2019)

    P1: 380

    P2: 360

    #1559488 Reply
    Anonymous
    Inactive

    I own a consulting firm that provides accounting services. Much of our business is online and clients are abroad.

    You have to be careful with employment law and your employer's policies regarding this. Freelancing and moonlighting is typically prohibited with most accounting employers, both public and private.

    Though you may be safe as long as you are not directly competing with your employer (i.e. providing bookkeeping or tax services when your employer provides those same services).

    Most employment contracts and documents will include noncompete clauses which often times is limited to a geographical region, so to be completely honest, I'm not 100% sure if it applies to clients that are virtual and abroad.

    #1559631 Reply
    iputaspellonfar
    Participant

    Just curious what state you are in?

    #1559653 Reply
    Missy
    Participant

    As far as bookkeeping and accounting services go, just know its not easy to do as a side gig. Most clients want you available during business hours. Even though I was crystal clear to the largest of my three clients that I am practically unreachable during business hours he tries to call me daily………keep ignoring him but still.

    Old timer,  A71'er since 2010.

    Finance manager/HR manager

     

     

    #1559685 Reply
    RWCPA
    Participant

    Thanks SeattleCPA that was a pretty interesting article. I do hope to cross that 81% threshold and I completely believe it is possible. Out of Curiosity can you tell me where your firm falls in that range? I know a couple people that operate smaller Firms (1-2 CPAs) and actually do much better than the top tier in the article. But I also know a few that have attempted it and seemed to be back in industry within a year.

    BrickellCPA. I do not have a non compete contract. I work as a corporate accountant in a large company performing closing procedures and researching/implementing accounting treatments. There are no services offered outside of the company.

    iputthespellonfar. I am in Florida.

    mla11692. I can see that providing book keeping services would lead to clients wanting to communicate during business hours and I do have that covered ( I think/hope). My spouse already works from home and will be fielding calls and questions throughout the day and will be emailing me anything that may need a faster response.

    Thank you all for the feedback

    C.an P.ass A.ttitude
    #1560040 Reply
    Tncincy
    Participant

    I'm on the reverse of this questions. I am looking for something to keep me busy since tax season is over. My concern was conflict of interest as was addressed above, I am having a hard time finding something that will let me keep an income over the summer and keep my business. If I can only pass this test 🙁 , then my question was how to convert to a small firm. I am open to suggestions as well. Sites or books to subscribe to would be appreciated.

    It begins with a 75
    Been here too long as a cheerleader.....time to pass
    #1560067 Reply
    Missy
    Participant

    In industry it's practically unheard of for finance/accounting people to be restricted from 2nd jobs or moonlighting unless for a direct competitor where proprietary information could be damaging. Public is almost certainly different but if someone works in industry I wouldn't give it a second thought.

    Old timer,  A71'er since 2010.

    Finance manager/HR manager

     

     

    #1560069 Reply
    Missy
    Participant

    Also noncompetes in industry are limited to engineering and very technical positions but exceptionally rarely enforced.

    Old timer,  A71'er since 2010.

    Finance manager/HR manager

     

     

    #1563919 Reply
    SeattleCPA
    Participant

    RWCPA asked, “Out of Curiosity can you tell me where your firm falls in that range?”

    We're at the top of our peer group. Among other things, that means we can pay team members the sorts of salaries that larger firms do.

    RWCPA commented, “I know a couple people that operate smaller Firms (1-2 CPAs) and actually do much better than the top tier in the article. But I also know a few that have attempted it and seemed to be back in industry within a year.”

    One common format really experienced solo CPAs use is to run as a one CPA shop with a seasonal admin. That approach can be very profitable once the CPA has a rooster of good clients. It's a sweat shop business oftentimes. But people can make $200K, 300K a year.

    That said, I believe the data strongly suggests most solo CPA firms work hard and make about what a senior makes.

    I think RWCPA is already down the path, so this is for others considering this option… The “secret” is successful small firm owners need to be more than a technician to make more than a technician.

    BTW I'm sure there are a variety of strategies and tactics people can use to enjoy success… for what it's worth, what we've done is leverage technology as much as possible and then focused on providing tax services to small business owners and entrepreneurs with multistate or international footprints.

    Another comment: If someone wanted to own a small firm, I'd also consider going to work for a well-run small firm and then working hard to develop first the technical skills and then the marketing and management skills to either buy that firm from the owner when she or he retires… or to buy another firm. You'd need to be really careful: You'd want to get a top tier firm–not a sweat shop. But you could find yourself with a business where you make a good living for a long time, have total control over your work, etc.

    I don't really remember my CPA exam scores. I've been a CPA for decades... I run a four CPA firm in Redmond WA. I'm the author of a bunch of books about small business accounting including QuickBooks for Dummies and Quicken for Dummies.
    #1564270 Reply
    Skynet
    Participant

    I always wanted to start my own CPA firm where half naked Female CPA's serve Buffalo wings and beer to our clients as they watch the ball game on the big screen.

    AUD - 90
    BEC - 78
    FAR - 84
    REG - 87
    World Domination Plan

    Phase I : Pass CPA Exams - Complete
    Phase II : Megan Fox - In Progress
    Phase III : Megan Fox & Scarlett Johansson Lingerie Pillow Fight
    Phase IV : Form the new Charlie's Angels with Megan Fox, Scarlett Johansson, & Gal Gadot
    Phase V : TBD

    #1564351 Reply
    Pete
    Participant

    Skynet, I could see a marketing campaign, where you see Megan fox serving said wings, on a television commercial.

    #1564368 Reply
    M123
    Participant

    SeattleCPA – thanks for the post. Very helpful info. This is something of great interest to me. The whole no moonlighting/sidelining thing has me locked up for now. How much capital should one have in order to start out? How long would it take to replace income on average?

    AUD - 77
    BEC - 81
    FAR - 77
    REG - 81
    REG - 1. Becker only - fail (forgot to study depr - oops); 2. Becker only - Pass
    FAR - 1. Becker only - fail; 2. added Ninja Notes and MCQ - Pass
    AUD - 1. Becker videos; Ninja Notes, Audio, MCQ, Becker Notes - Pass
    BEC - 1. Ninja Notes, Audio, MCQ, Becker Notes - Pass
    #1564372 Reply
    CPA2BEE
    Participant

    @Skynet be my partner?

    CA CPA - est. Dec 2016
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