Certified public accountants (CPAs) are among the most well-respected and sought-after professionals in the career world. CPAs are responsible for advising individuals and businesses regarding accounting, tax and general business matters. Starting your own CPA firm is rewarding but takes a lot of work. There are both advantages and disadvantages to starting your own CPA firm. Some of the most notable advantages include earnings potential and career advancement potential, while one of the most notable disadvantages is the need to find clients on your own.
Unlike working on a salaried job, starting your own CPA firm gives you much more flexibility when it comes to your income potential, which is one of the greatest advantages. Essentially, you can earn as little or as much as you desire. Of course, your income greatly depends on the amount of work your firm is able to handle. Not only are you in control of the amount of clients you are willing to take but also the fees that you charge clients. You may start off with low fees when you first open your CPA firm, and then decide to raise your fees after you obtain work experience. You can also add additional services to your firm in the future, which will also increase your income.
Career Advancement Potential
In the beginning, you may decide to work as the only employee in your CPA firm. Self-employment has its benefits, such as lower overhead costs and rental rates. However, you may come to a point in your business when you want to hire staff. This will transition you from self-employed business owner to a management position within your company. As your CPA firm continues to grow, your responsibilities will increase. Your career advancement is within your own power because you make all of the decisions regarding your business. You may eventually decide to focus strictly on managing your staff and meeting with clients, and leave the actual accounting work to those you employ.
One of the disadvantages to opening your own CPA firm is start-up costs. The amount needed to open your business will depend on its size. You will need to purchase equipment and insurance, and market your business in an effort to obtain clients. Many individuals use money they have saved over the years to open their CPA business. If this is not an option, you will have to look to outside sources for funding. Examples of outside sources include borrowing money from family or friends, finding private investors or securing a bank loan.
The responsibility of finding clients is another disadvantage of starting your own CPA firm. Networking is one of the best ways to find clients, which means you will have to attend professional events and work with other professionals in an effort to obtain referrals. You will also need to market your business. The size of your marketing efforts will depend on your budget. The number of clients you have directly affects your income, so it is imperative to spend time and resources trying to find clients for your CPA business.