The Ultimate Guide: How to Start Your Own Bookkeeping Business From Home

If you are coming from my post about how to be a bookkeeper then you have already covered the basics or got your feet wet, so to speak. We also talked about possible bookkeeping courses that can set you in the right direction. Now, this post is for those wanting to know how to start their own bookkeeping business. This is a step-by-step guide, of sorts, for doing so. My husband set up his own business and we felt like we should share what we learned in the process. 

Many individuals are successful in bookkeeping and started out by setting up their business and jumped in with just their laptop. This post is less about doing it for free (or cheap) and more on how to set it up right from the get-go so you can look (and feel) professional and can offer seamless workflow, processes, and results right out of the gates.

Just some background on us (or my husband since it’s his business). My husband is very detailed oriented. When he decides he is going to do something, he wants to do it right the first time.

Now that doesn’t mean that he won’t tweek this or that as he goes along. He will changes things as the business changes and expands. However, he told me when this was still an idea that he didn’t want to have to figure things out as he was going along and taking/working with clients. He wanted everything to be seamless on his end because then it would be easy for the client while also minimizing his stress. Another reason was that your reputation is delicate when you are first starting, how you conduct yourself and your business can determine how fast you grow.

There you have a little insight on the reasoning on why we chose the route we did. There was more to it but you will get the gist. 

The information provided on this site is based on my own personal experience and is not to be construed as professional advice. I am not a financial advisor or planner, nor am I a CPA. The contents of this site and the resources provided are for informational and entertainment purposes only and do not constitute financial, accounting, or legal advice. The author is not liable for any losses or damages related to actions or failure to act related to the content on this website.

Background on starting your own business

According to the U.S. Small Business Administration, most microbusinesses cost around $3,000 to start, while most home-based franchises cost $2,000 to $5,000.

“Have a plan to cover your expenses in the first month,” he said. “Identify your customers before you open the door so you can have a way to start covering those expenses.”

When planning your costs, don’t underestimate the expenses, and remember that they can rise as the business grows, Gerber said. It’s easy to overlook costs when you’re thinking about the big picture, but you should be more precise when planning for your fixed expenses. 

(Caramela, 2021)

Another site cited how much businesses spend in their first year:

Perhaps unsurprisingly, having employees dramatically increases overall spend. If you choose to go the solopreneur route, you can spend less than one-third what businesses with employees spend.  

What our research shows:

Business owners with zero employees spent $18,000 in their first year. 

Business owners with one to four employees spent $60,000 in their first year. 

(Voidonicolas, 2021)

Now I don’t cite these to scare you. This is just to offer some perspective on what some people end up spending starting up their own business. These numbers are a generalization for small businesses. However, here we are looking at bookkeeping so we need to ask ourselves, is it worth it?

Is Bookkeeping profitable?

Yes, it definitely can be. Bookkeeping has the benefit of not going anyway because as long as businesses are selling then there needs to be someone to track the financial ins/outs. The benefit to starting a bookkeeping business is that start-up costs can be quite minimal compared to other businesses. Another is that the overhead cost is relatively low; you don’t have to keep inventory and can work from home saving you the cost of renting/buying an office space. This leaves room for you to cover your expenses fairly easily. As well as get back the amount of money you invested in the beginning.

Beyond a high demand, another great benefit of starting a bookkeeping business is a high margin of profitability. Entrepreneur reports that the accounting, tax preparation, bookkeeping, and payroll services industry is one of the top 15 most profitable small business industries. 

(Financial, 2019)

How much can I charge?

It’s your business… you decide what you will charge. 

Maybe that’s too much liberty for some (would be for me). In that case, let’s look at some numbers… On the low end (depending on your experience, services you are offering, etc) bookkeepers charge $20-$40 per hour, roughly $38,400-$76,800 per year if you are working full time (40 hour workweek). However, many bookkeepers who operate their own business are charging $50-$75 per hour, some even higher; putting your income at $96,000- $144,000. 

Therefore, the question of how much should you charge is going to depend on what you can offer your clients. Balancing valuing your worthwhile being reasonable to your clients as well as competitive.

The pros and cons of starting your own bookkeeping business

Before starting, you want to weigh your options and determine if this is the best path for you. You don’t want to jump in blindly and realize oops, not for me!!! That’s wasted time, energy, and money. I bemoan when I feel like I have wasted money, I could have spent it on food (kidding)

Moving on:

Pros:

• Start-up costs are minimal
• Overhead costs are low
• You can work from home or virtually and expand your reach
• No formal certification or degree is necessary although it is a good idea to know what you are doing.
• Freedom and flexibility to determine what you will charge, what hours you will work
• Consistency and routine to your day-to-day work
• The effort you put into your business directly benefits you not someone else
• You can work from anywhere as long you have an internet connection and a working laptop
• Can work in your comfy clothes (unless you have video calls/meetings).

Cons

• You are directly accountable for the rise (or fall) of your business
• You might get tired of being in the same room of your house
• More than likely you are going to be in quite a bit of time, money, and effort into your business long before you start seeing results
• Hard to set boundaries for yourself and work all the time
• May have to work around family or nosy pets.
• Need to ensure that your client’s information is secure and safe
• Liability issues, need I say more.
• Very little room for making mistakes, this is someone’s finances we are talking about
• Might be challenging to sign your first client when you are first starting without references or much experience. Certification can help here.
• Start-up costs. While the start-up costs are low compared to other businesses, they might still be a significant investment for you. Sometimes it’s hard to take that leap.
• You have to keep yourself in check and accountable for getting the work done promptly. 
• You need experience and the know-how of bookkeeping to be competitive and continue learning to stay competitive and successful

For better or for worse, this is the reality of it. You have to decide if you’ve got what it takes to run a business. It can be gratifying to some while for others it would rank somewhere in Dante’s Inferno and that’s okay. What’s important is figuring what works for you.

How much to invest upfront

This is going to look different to everyone. Some claim to have started their business for the cost to set up their business LLC, some software, and a functioning laptop. I am not knocking it, I just don’t have that firsthand knowledge and that’s not the route we took so I can’t personally vouch for that. I would suggest going on bookkeeping groups online and asking if any would be willing to share their experiences starting. You can find a list of bookkeeping groups in my other bookkeeping post (Resources for bookkeeping section). 

Any note is that I can’t tell you what works best for you. I can only tell you what we did. It’s up to you to do the research and look in between the lines as well as the nitty-gritty details to determine how best to run your own bookkeeping business. 

So what did we do? Upfront, we invested roughly $8,000 in starting my husband’s business. That might make you choke a little and like I said you don’t have to do what we did to be successful in this field. Therefore, let’s dive a little deeper…

Set up your tools/technology

Business Entity Set-up

There are a few different business entities but they all fall under three categories; sole proprietor, partnership, and corporation. I am not going into great detail, just a gliding overview (you can check out my resources at the end of the post).

 A sole proprietor involves one person/owner and there are no special documents needed and it doesn’t separate the business from the person. Under a sole proprietorship, the owner is personally liable for everything dealing with the business. Not exactly what you want if someone decided to pursue legal action for whatever reason.

An LLC falls under the corporation category, I have seen most small business owners form an LLC. A limited liability company (LLC) offers protection to the owner of the business; separating your personal assets from your business. There is also the added benefit that there isn’t as much paperwork involved with forming an LLC as there would be an S-corp. 

I would suggest Mark J Kohler’s website and Youtube channel for more information about LLCs and S-corps. He and his team break down the benefits and legalities of it all. And he is also the reason why our cost to set up our bookkeeping business is higher than the usual “just filing with the state.”

You can simply log on to your state’s website and they have steps you can follow to register your LLC and receive a tax number/EIN number (which you will need to operate your business). We wanted to be protected legally so we opted to work with KKOS Lawyers. They set up the business, filing with the state and IRS while providing us with a company seal and a corporate book detailing our business. They are also there when it came to writing up contracts. Working with them gave us a sense of relief that we were covered legally in every way, shape, and form. 

Always check your town and state to make sure you know what the laws are concerning setting up and running a business in your area. Some areas require a business license which is usually a quick application and $20. Filing your paperwork (crossing the “t” and dotting the “i”) is just tedious, not overly complicated. The purpose is to protect yourself because everything can happen.

Education

So we purchased a bookkeeping course; the 60-day Bookkeeper Course while working on our certification to work with Quickbooks and other accounting software. I won’t go into too much detail here because I cover bookkeeping courses in another post as well as going over education again in how to become a bookkeeper. Therefore, I will just reiterate what we all know, before you start your own business, you have to know what you are doing. If you don’t have any previous knowledge of bookkeeping then start educating yourself, learn all you can. There are some tidbits of knowledge that just come from experience and doing the work however you need to have a good, solid foundation of the terminology, how to bookkeep properly, and basic knowledge of how a business works. 

There are plenty of options available for you to learn the necessities to be a successful bookkeeper. We went with the 60-Bookkeeper Course because the price worked for us and the reviews from those taking the course were quite reassuring that you were getting everything you needed to not only for bookkeeping but also market effectively. We looked for a course option that offered the marketing your business aspect because that was our greatest weakness.

To help with passing Quickbooks Proadvisor Certification, we also purchased Margie Remmer’s Fast & Easy QBO course. 

Website

This isn’t strictly necessary. However, in this time where all of us are constantly on our phones or plugged into the web whether for fun or work or learning; having a website gives you credibility. How often, when you are trying to decide what business to work with, look them up on the web?

I do it all the time, I research, check reviews from multiple sources, check out their website. By the time I call, I have done quite a bit of background research on them. You just want to make sure they are legit, and you are not going to get screwed somehow. You have to be careful because of scammers, and those people who are looking to take advantage of you. No good at all!

Running a website comes with its own language. I already run my own business here on Eccentric Lifestyle so I have some knowledge (enough to get me in trouble sometimes) concerning website design and hosting platforms. We moved to Namehero, with great site speed and loading times. The customer service is fantastic. 

You can either DIY your website and keep it simple if this is all new to you or you can hire a web designer to take care of it for you. I was able to design my website here at Eccentric Lifestyle as well as design my husband’s bookkeeping business website so the cost to us was only for Namehero to host our websites on their servers. We got the three-year subscription, most hosting companies give you HUGE savings when you first sign up with them.

Keep in mind though once you are up for renewal, the price can go up significantly. Don’t worry too much about sticking with one platform, if the company you are using isn’t working out then it is really simple to switch hosting companies and not mess up your site. There are also companies like GoDaddy, Bluehost, HostGator that can still get the job done well. Do your research, find what works for you. The goal is to get your name out there and having a professional-looking website can help get your foot in the door.

A side note, if/when you get your Quickbooks Proadvisor Certification you are given your own Proadvisor page which you can add information about yourself, what you offer and your rates so if you aren’t into doing your own website, this may be an option for you to direct potential clients and customers to this page as your “website.”

Marketing Portfolios/Stationary- optional

Okay, this is not really needed for most besides business cards. The clients that we serve want paper copies of their reports. They like having that available to them so it made sense for us to pay for this. We went with Lockhart Industries for high-quality, professional folders, business cards, letterhead, envelopes, and report paper. All with our logo and business information, that way it is professional but also a marketing tool. The reason it was so costly would be because of the quantity that we ordered.

So take it or leave it, this option is what we felt was necessary to optimal serve our niche of clients. My advice at the very least would be to invest in business cards. I know it is old school but it is still an effective way to get your name out there in your community, networking event, and anywhere you go. You can look for cheaper still professional options with Vistaprint, Office Depot, local options, or online. 

Hardware

Now we are getting to it. Technically, all you need to get started is your laptop with a strong internet connection. Now that both my husband and I run a business that requires a computer, having one laptop wasn’t going to work. 

I couldn’t believe it when I was hearing from other bookkeepers that they used two, even three monitors to work! I thought that was quite excessive… Not anymore. After watching my husband work, I see how working with two (even three) monitors can make the work easier and smoother. So that, my friends, is what we got. A new computer with plenty of RAM and power (I am a big ASUS nut) and two 24” monitors to allow my husband to work quickly and effectively. 

Another note to add, if you go with the monitors chances are there isn’t a webcam or microphone built-in. If that is the case then you will also need a headset and a good quality webcam for video calls and meetings. A printer that has fax, copy, and scan capabilities would also be helpful. All from your handy dandy Best Buy.

Software and Applications

Here’s where you can determine how your workflow is going to go, how will they integrate with one another. Software to make your life so much easier and to keep you from getting overwhelmed by the never-ending to-do list or worse forgetting important meetings or deadlines. 

Accounting Software

Quickbooks and Xero will let you operate their accounting software for free or for a wholesale price for your clients. There are others such as Wave, Sage, and Freshbooks. You have to determine which works best for you. Quickbooks is widely used and accepted so it will improve your marketability to be savvy with their software.

Business phone

For us this is an application, there are many out there for varying prices: Google Voice, Sideline, Ringcentral, Ooma, Grasshopper… just to name a few.

Business email

G Suite is something that people use so you can have an email with your business name at the end (doe@yourbusinessname.com) you have a business calendar and a myriad of applications. This keeps your work separate from your personal. However, you can simply use a free Gmail account.

Microsoft Office

I don’t have to go into too much detail here. Who doesn’t use Office?

Docusign

This is for when you are signing a contract to start services with a client. You can email the contracts/documents, they sign and you are good to roll.

Calendar 

We went with Calendly which integrates with your google calendar so you don’t double book yourself. I have also heard of Acuity but I don’t have any personal experience with it. Calendly will also send you text and email reminders to you and your clients for appointments. You do need to set this up yourself but it is super easy to do.

Payment application

You need to get paid, I mean why start a business if your clients don’t have an easy way to get their payments to you. Melio or Bill.com are a couple, Venmo has some business payment options. Strip, Square, or Paypal, also Quickbooks can accept payment through their portal. Watch out for fees, you have plenty of options so again go with what works best for you.

Task Management Application

This is to keep you organized, what tasks need to be done, and when. Asana is a good one that will integrate with your Google Calendar. Trello is another task management application

I probably forgot something here and there, hopefully not but you never know. This list is at least a good starting place, another point for redundancy… do your research, this is your business only you know what will work best for you. Talk to other bookkeepers, find out what worked for them or better what didn’t. Be willing to adapt when something doesn’t work or you need to change due to your business or life.

Storage and Security

Obviously, this is another important point to look at and needs to be researched carefully (and I initially forgot about it…ironic). You are handling a business’ financial information and they want to know that their files are secure in storage as well as in exchange to and from the client. There are applications such as Docuware, Drake Software, Smartvault, and Sharepoint. 

Contract and Documents

This part is so important in order to protect yourself and your business while keeping each party accountable for their part. Lawyer fees are super expensive but the contracts are essential so what are you going to do? Well for one, we bought The Legal Bundle from Artful Contracts by Amy Nesheim. Included were a series of contract templates that you can use to cover your business as well as other great tools to help you customize them to your needs. She has a wide variety of templates and packages so you can find what works for you

If you are interested in Amy’s templates, you can get 10% off, coupon code eccentriclife10

For us, this was great! We customized the contracts and then sent them off to our lawyers for them to double-check everything. These contract templates saved us a fortune in lawyer fees.

In the way of documents, you need a wide variety such as onboarding, info about yourself and your business, services offered, proposals, etc. This can be done as a simple word document. Quickbooks also has great templates for these documents.

Create a business plan

It is a whole lot easier to be successful when you give yourself a step-by-step guide to setting up and running your business. Take some time and write out your goals; short-term and long-term. Keep in mind to be reasonable with your goals for example: 

• In three months, I will officially launch my business. 
• Six months after launch, I want to be making $$$
• I want to replace 50% of my income by _____
• I want to replace my full income by ______

Break those down into actionable steps. How are you going to get there? Breaking it down into tasks saves you a lot of brainpower and potential “in the moment” overwhelm. 

Also, take some time to decide what is the end goal or exit strategy. I know this might sound strange but you always want to keep in mind what the end goal for your business is. Do you want to do this part-time or full-time? Do you want to just manage the business while you travel and hire others to do the everyday work? Do you want to retire? What will you do with the business then? Knowing your end goal allows you to tailor or grow your business accordingly. 

Determine your rates

It’s your business, you are in control of your rates and this is such a tricky part of the business. We talked about this earlier.

Are you going to charge an hourly or a flat monthly fee? Are you going to put together service packages? How do you determine that monthly fee? The number of transactions a month? The number of accounts?

So many questions, you don’t want to undervalue yourself because then you will be overworked and underpaid which is not the point of owning your own business. On the flip side, you overcharge and you will have a hard time finding and keeping clients. Again this is a “ask other bookkeepers” online and local and do what works for you. You are not locked into the prices you set when you first start out. Once you get the feel for what you are doing and your knowledge and experience grow you can feel more confident in how and what you charge.

Determine your target market

What type of business clients do you want to work with? Do you have experience in certain fields that would make bookkeeping easier for those businesses? Determining your target market or niche of clients allows you to hone in on an effective marketing strategy. Plus working within a specific group of clients or businesses helps you gain experience and you become more of an expert bookkeeper in that field. This allows you to up your prices because your skills become more valuable. 

Don’t limit yourself to just one group but don’t overextend yourself; pick two to four niches that you would like to work with and focus on those.

Examples would be:

• Construction companies
• Farms and ranches
• Salon owners
• Real estate investors
• E-commerce 

There are a plethora of options available to you. Figure out who you would like to work with and do some digging and research on them. Where do they hang out, online or in person? How can you best reach and market to your audience? How do these types of businesses run? What’s unique in their bookkeeping? Know your market so you know how best to sell your services and convince them that they need you.

Marketing

You got your business ready to go now you have got to sell it! We started talking about this in the previous section. Determine your niche helps you know what marketing tools can be most effective in getting your business out in front of the right crowd. Put yourself out there. Join your local Chamber of Commerce, join any business groups relatable to your ideal client, attend networking events online or in-person. 

Talk, talk, talk about your business!! Let people know what you are doing, make a Facebook business page, make a Linkedin page and join as many Facebook or online business groups that you deem prudent. Your business needs as much exposure as you can give it. It’s all about the numbers, the more people that know about your business the higher likelihood that someone will contact you needing your services. 

Drop your business card off at other businesses willing to put your name out there. Network with CPAs, accountants, and even other bookkeepers so if needed they can refer clients to you.

It’s all about the exposure. Shine that light on your business!!

Continue your education

It is important to never stop learning. Stay up to date with what’s going on with the group of businesses you work with and with bookkeeping in general. Take the opportunity to learn new skills in order to expand the number of services you can offer. Maybe go for that accounting degree. Do what works for you but never stop learning, it will keep you competitive and relevant.

Wrap up

That’s it. I know this is quite of bit of information to swallow. Give yourself some time to digest, running your own business is no small feat! It can be exhausting yet completely gratifying. I want to leave you some quotes to think about as you also wonder if starting a bookkeeping business or any business is right for you.

“IN THE END… We only regret the chances we didn’t take, the relationships we were afraid to have, and the decisions we waited too long to make.”

Lewis Carroll

“Just start. Don’t worry that you don’t have all the answers yet.”

Alli Webb

“You don’t have to be great to start, but you have to start to be great.”

Zig Ziglar

“Know that you can start late, look different, be uncertain, and still succeed.”

Unknown

“In order to succeed, your desire for success should be greater than your fear of failure.”

Bill Cosby

References

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Calculate your startup costs. (n.d.). Retrieved April 21, 2021, from https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs

Caramela, S. (2021, April 5). How much money does it cost to start a business? Retrieved April 21, 2021, from https://www.businessnewsdaily.com/5-small-business-start-up-costs-options.html

Financial, G. (2019, July 26). How to start a bookkeeping business. Retrieved April 21, 2021, from https://www.guidantfinancial.com/blog/how-to-start-bookkeeping-business/#:~:text=Beyond%20a%20high%20demand%2C%20another,most%20profitable%20small%20business%20industries.

Jackson, B. (2021, March 11). The benefits of G suite for your Business (why we use it). Retrieved April 21, 2021, from https://kinsta.com/blog/g-suite/

Kriss, R. (2021, April 09). 14 business startup costs business owners need to know. Retrieved April 21, 2021, from https://www.nerdwallet.com/article/small-business/business-startup-costs

Prakash, P. (2021, April 14). Types of business entities. Retrieved April 21, 2021, from https://www.nerdwallet.com/article/small-business/business-entity#:~:text=State%20governments%20in%20the%20U.S.,corporation%2C%20and%20S%2Dcorporation.

Voidonicolas, R. (2021, January 12). The cost of being the boss: What business owners spend in their first year. Retrieved April 21, 2021, from https://www.shopify.com/blog/cost-to-start-business

Williams, Birnberg, & Anderson. (n.d.). What form should a NEW business take? Retrieved from http://www.wba-law.com/res/business.pdf

Workspace. (2016, November 16). Business start-up costs: A must read guide. Retrieved April 21, 2021, from https://www.workspace.co.uk/content-hub/business-finance/projecting-start-up-costs-for-a-new-business