Startup cost
$1.0k–$10k
TRUiC Business Ideas
How to Start an Accounting Firm
Decision Snapshot
Accounting Service
Idea Score
69
Profit margin
41%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Medium
Time commitment
Full time
Part 1 - How to start an Accounting Firm business - Background
Accounting services keep track of income, expenses, taxes, and other financial-related information for organizations and individuals of all types. Accounting services are in-demand for good reason. Professional accountants provide business owners and individuals with a clear picture of their finances, implementation of tax mitigation strategies, and all sorts of other financial benefits for clients.
Our guide is in 3 parts:
- Part 1 - How to start an Accounting Service business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening an accounting firm?
An accounting service requires an office, computers, accounting software, high-speed Internet, desks, filing cabinets, printers, insurance, and money for advertising. It is also necessary to become a certified public accountant (CPA). CPA exam fees typically cost around $1,000.
What are the ongoing expenses for an accounting firm?
An accounting service must pay monthly office rent, utilities, high-speed Internet, employee salaries, marketing costs, insurance, computer/software upgrades and general office expenses. The cost of monthly office rent for an accounting service depends on the size of the space as well as the location. In general, you can expect to pay between $600 and $1,500 each month to rent an office. It is also possible to operate out of your home or another property you own. Budget at least $150 to $200 per month for utilities including high-speed Internet.
A receptionist will require a salary of $25,000 to $35,000. A marketing professional will demand an annual salary in the range of $35,000 to $60,000 or more. If you do not want to handle the accounting work on your own, it will be necessary to hire one or several accountants. These professionals typically command a salary of $40,000 to $80,000 per year.
Budget in at least a couple hundred dollars per month for marketing. You will eventually have to replace and upgrade computer hardware and software. It is prudent to put $100 to $200 aside each month for these inevitable expenses. This way, you will have money available for replacements/upgrades when the time comes to implement them. Budget between $100 and $200 each month for office sundries like coffee, pizza parties, bottled water, staples, paper, ink toner etc.
Who is the target market?
The ideal client is a large business. Other ideal clients include wealthy individuals and business owners with myriad sources of income.
How does an accounting firm make money?
An accounting service makes money by charging clients fees. Some work on an hourly basis while others accept a flat rate for project work. Other accounting services are paid an annual sum of money that covers the entire year’s worth of accounting work.
How much can you charge customers?
The amount of money charged to clients differs on the size of their enterprise, the scope of the work, the region in which you are located and a number of other factors. If you secure a high-profile business with substantial revenue, you can likely charge $125 to $350 per hour. If you are handling a single project such as year-of-end taxes for an individual, you can likely charge a couple hundred dollars to a couple thousand dollars depending on the complexity of the project.
How much profit can an accounting firm make?
If you are a one-man operation, you will likely make between $30,000 and $75,000 in the first year or two. Continue to grow your business and your profits will eventually reach six figures. If you secure a steady roster of clients and expand throughout the region, it is possible to make millions of dollars.
How can you make your business more profitable?
Ask clients to recommend your services to colleagues and friends. Jump at the opportunity to tackle side projects such as a wealthy client’s personal taxes. It is also possible to make extra money by teaching accounting classes and training others on accounting software programs.
Day-to-Day and Growth
What happens during a typical day at an accounting firm?
The typical day for an accounting service business owner involves everything from searching for new clients to creating and modifying accounting spreadsheets, explaining financial information to clients, delegating duties to employees, and handling marketing efforts.
What are some skills and experiences that will help you build a successful accounting firm?
It is important to differentiate your accounting service from competitors. Find a niche, master it, and the clients will trickle in. Furthermore, a mastering of financial concepts, tax laws, accounting principles and mathematics will help. It is also prudent to familiarize oneself with the nuances of accounting software programs such as QuickBooks, Xero, and Peachtree.
What is the growth potential for an accounting firm?
Accounting is a hot field. As long as businesses and complex finance/tax laws exist, accounting services will play an important role. Prove your worth as an accountant and you will gradually add clients to your roster. It is even possible to expand throughout your region, across the state and beyond. The optimal result is growing your accounting service to the point that it provides services for clients throughout the nation and even the world.
What are some insider tips for jump starting an accounting firm?
Recruiting new clients is the lifeblood of an accounting service business. Advertise across an array of mediums to make a name for your accounting service within the community. Master your selected accounting software program. Beat competitors’ prices and find creative ways to save clients’ money.
How and when to build a team
You might not need much of a team right away. Once the phone starts ringing, you will benefit from having a receptionist on staff. A marketing professional and junior accountants will eventually be necessary as the business grows. Wait until you have at least a couple clients before adding a full-time employee to the team. You will likely be able to handle reception duties, marketing and the accounting workload in the initial months before bringing a salaried employee on board.
Part 2 - Is an Accounting Firm business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Accounting Service business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Accounting Service Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Accounting Firm business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.