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Switching From an Accounting Employee to a Firm Owner—Things to Keep In Mind

Maanoj Shah
Posted by Maanoj Shah on May 8, 2024 6:40:27 AM

If you aspire to shift from being an employee to being a firm owner, then congratulations! You have begun on an exciting path. But it is not enough to dream—a lot more goes into ensuring that you take the right steps to set up for success.

Making the leap is a significant career move and comes with its own set of excitement, opportunities, and challenges. While the idea of becoming your own boss is thrilling, the thought of doing it all alone can be overwhelming. Launching a successful accounting business is more than having the desire and the experience; thinking like a business owner and taking responsibility for all successes and failures requires a major mental shift.

Key Challenges During This Transition

Owning your own business can be exciting, but the process is not devoid of challenges.

1. Financial risk and uncertainty

Unless you have a huge financial backup, this will be a concern. While as an accounting employee, you had a steady flow of income in the form of salary. That will no longer be the case. The responsibility of generating revenue is on you. Managing cash flow, securing clients, and covering the expenses of the business and the employees are some of the significant things you need to be mindful of.

2. Managing growth and expansion

Growth is certainly a positive sign for a business, but it has challenges. As the firm grows, you will need to hire additional staff, expand your services, determine their prices, and maybe add new locations. As business owners, you need to plan carefully for scaling purposes. Investing in infrastructure, technology, and training support can save you from sleepless nights.

3. Balancing the professional and personal

Becoming a firm owner can be demanding, especially in the initial days when accounting firm owners must wear multiple hats. You may feel exhausted due to the long hours, tight deadlines, and exceeding client demands, which can take a toll on your mental and physical health. As a new firm owner, you might find it extremely hard to set boundaries and say no, making things worse.

Things to Keep in Mind to Make the Transition Easy and Successful

Before you get into a business owner's shoes, remember it will not be easy. The process will take a lot of your time, energy, and attention. But with the right support and planning, you can ace it all. Here are some things you should focus on:

1. Protect your time

Being an accountant is so much different from being an accounting firm owner. As an employee, your performance is measured by completing your specific tasks. But as a business owner, you must focus on the big picture—the strategy, the planning, and the right investment in people, platforms, and processes. You might think being a business owner is about being busy, but that is far from the truth; it is about setting the rhythm of the life you want to build, the problems you want to solve, and the vision you wake up with. Looking to offload or outsource the repetitive tasks that make you “busy” can help you keep your focus centralized.

2. Build and bank on the long—term relationships

When you become an accounting firm owner, your actions are far more consequential, and your business relationships are important. Strengthening your relationships with clients can pave the path to long-term success and generate better overall results for your business. You should consider implementing an advisory model to concentrate your focus on relationships like these. Instead of choosing a billable hour model, consider value pricing. This allows you and your clients the flexibility to lay out the scope of the engagement year-round. Remember, every service you offer, the value you add, and the knowledge you share isn’t for free.

3. Define your vision and goals

When starting as a business owner, it is very easy to lose track of what is important and what needs to be focused on. Clearly defining your vision, goals, and objectives helps you stay on track when overwhelmed. As the team continues to grow, it will also help them to understand the problems you are trying to solve for your clients, the approaches you adapt, and why you do what you do. Before you embark on this journey, ask yourself the vital questions that define your firm and set you apart. Establishing short-term and long-term goals will guide your decisions and help you stay focused during the transition.

4. Develop strong finance management skills

Being the owner of an accounting firm doesn’t require you to perform accounting tasks daily. However, you need a solid understanding of the principles of financial management. From budgeting to cash flow management to financial forecasting and pricing strategies—you should have a sound knowledge of it all, even if you have a team of experts adept at doing this. Investing in the right tools, processes, and people can help you manage your firm effectively and ensure success.

5. Invest in marketing and branding

We live in a digital age today. Gone are the days when word—of—mouth would act as the superior tool for you to gain clients. For the new firm, you need to establish a strong brand identity that showcases your business and the offerings just the way you want. Having a professional website is a must. Business cards and other marketing materials that reflect your brand are equally important. The employees you need and the clients you want have a strong digital presence, and that is the only easy way for them to find you and vice versa. Use content as a tool and adapt digital marketing strategies to help you reach your target audience and generate leads. It is essential to remember that consistent branding and marketing are key to building credibility.

6. Hire and delegate

While you might have to wear multiple hats in the initial days, you must have a plan. Will you build an in—house team of accountants, tax professionals, HR, marketing executives, etc? Or are you setting up a team of outsourcing professionals? If you are starting as a business owner, outsourcing has multiple benefits and is probably the one you should choose. From low costs to no hassle in finding the right talent, from gaining expertise in the area, you need to be able to scale easily—outsourcing provides multi-faceted benefits.

You will also need to learn to prioritize. Having the right team in place and delegating tasks as and where possible help accounting firm owners maintain productivity and avoid burnout.

Transitioning from an Accountant to a Firm Owner

Becoming an accounting firm owner is an exciting journey. There are challenges, but nothing that can’t be overcome. Setting up a strong team of accounting and finance professionals, seeking help from the strong network you build around you, and meticulous planning can go a long way in ensuring your brand-new accounting firm is a success. Stay focused, invest in skills and relationships, and get set to adapt to changing circumstances.

Sponsored Content: This article is generously brought to you by one of our valued sponsors. Their support enables us to continue delivering expert insights and the latest industry trends to our dedicated community of accounting professionals.

Topics: Modern Practice, Practice Growth


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