How to start a bookkeeping business in 15 steps

Want to start a bookkeeping business but wondering, “Is starting a bookkeeping business profitable?” Oh, it’s profitable, all right. Extremely.

In fact, you’re onto something that could turn out to be quite lucrative for you in the short and long term. Top individual full-time bookkeepers can make well over 6-figures. Even part-time bookkeepers stand to do well in today's economy.

Every business has a regular flow of financial statements, balance sheets, bank statements, and other financial documents to keep in check—and most business owners need help to do so.

Many don't have the time to keep up with the necessary data entry. They may also lack the needed training in QuickBooks or other accounting software to keep appropriate records. Small businesses everywhere need bookkeeping services to support the financial health of their business.

If you’re reading this, it means you see the opportunity, and you’ve already asked yourself the important questions every entrepreneur needs to answer. You want to help businesses by starting your own bookkeeping business. And we want to help you figure out how to get out there and land your first client.

We’ve laid out how to start a bookkeeping business in 15 steps. You’d better bookmark this page—you’re going to want easy access to this info as you build your bookkeeping business.

Here’s what we’ll cover:

1. Your business plan
2. Your certifications
3. Your business structure
4. Your niche
5. Your unique value proposition
6. Your target market
7. Your business name
8. Your services
9. Your software
10. Your finances
11. Your insurance
12. Your paperwork and other procedures
13. Your employees
14. Your marketing
15. Your continued education

But before we dive in, let’s get one major question answered first.

Can I start a bookkeeping business with no experience?

Zero experience running your own business? Yes. Zero experience or training as a bookkeeper or accountant? No.

If you want to start a bookkeeping business, previous experience as a CPA or bookkeeper is essential.

Bookkeepers need certification (which we’ll go over later) and a working knowledge of accounting software, best practices, laws, and, in some cases, the tax code.

While you don’t need to be an expert in every single area, any bookkeeping company must provide reliable, educated services to their clients. Errors in bookkeeping can be stressful at best and financially disastrous at worst.

Don’t have experience yet? No sweat. Gain 1-3 years of on-the-job work experience, earn a couple of certifications, and then venture out to start your own business.

However, if you’re already a CPA or professional bookkeeper, then read on—you’re ready to start your bookkeeping business, and we’re ready to show you how.

1) Start with a business plan

Your business plan is like your road map to success. You will refer to it over time to help you make decisions and work toward your goals. You can also use your business plan to organize your market research, define your target market, your marketing strategy, and how your business will generate regular cash flow.

This is a necessary document if you think you might seek financing from a bank or other investors. It shows that you know what you’re doing, why you’re doing it, and how you will continue to grow in a positive direction over time.

A successful business plan will include:

• Executive Summary: Describe the business, its purpose, and your main goals for the company.
• Overview: Why are you starting this business? How will it be structured? What is the unique value that your bookkeeping business brings to the market?
• Industry Analysis: Outline any market research you’ve done and the results. What does your research tell you about the likelihood of success for a bookkeeping company in your area? What are the trends? What is the level of opportunity? How much market share are you likely to obtain?
• Competitive Analysis: Who is your competition? Who do they serve? What strengths do they have, and what weaknesses? What makes you different?
• Marketing: How will you get the word out about your business? How will you reach your ideal clients? What strategies will you deploy to generate leads, define your brand in the market, and close deals? What marketing channels and assets will you use to do this?
• Management: Can a potential investor or bank trust that you are a good investment? This is where you lay out your experience both in the industry and in leadership. Who are you, and what makes you a strong bookkeeping business owner?
• Operations Plan: What will your day-to-day look like? What systems do you plan to put in place to make sure your business functions optimally every day?
• Financials: How will your new bookkeeping business generate cash flow? Will your small business be able to grow over time? Lay out your estimated expenses (including startup costs), revenues, and projected profits for each of your first five years in business.

Remember that your business plan is likely to evolve as you learn more about your business in relation to the market. It can be 10 pages, or it can be 1 to start, and it doesn’t have to be perfect—it just has to exist.

2) Earn your certifications

For professionals and aspiring bookkeepers alike, certifications are a powerful way to boost your skills and add additional authority to your brand. You can gain certifications in bookkeeping itself as well as in the accounting software you plan to use to serve your clients.

Bookkeeper certifications

• American Institute of Professional Bookkeepers (AIPB): Once certified with the AIPB, you can place the letters CB (for Certified Bookkeeper) behind your name. To earn this credential, you must complete a 3,000-hour work experience requirement and pass the AIPB certification exam. Look to certify with the AIPB if you have no formal experience or education as a bookkeeper or accountant.
• National Association of Certified Public Bookkeepers (NACPB): The NACPB certification works a little differently than the AIPB certification. To earn this certification, you are required to take courses in QuickBooks, payroll, accounting, and, naturally, bookkeeping itself. You must also pass an exam for each of these courses. Newbies to the bookkeeping field must complete 1 year of on-the-job experience before they are eligible for this certification. Once certified, you can place the letters CPB (for Certified Professional Bookkeeper) after your name.

Software certifications

• QuickBooks ProAdvisor: QuickBooks is possibly the most popular name in accounting software. As such, a certification through them will give your business a boost with prospective clients, as many will already use it in their business. You can certify with them for free through the QuickBooks Online program, but the QuickBooks Desktop program requires that you purchase the software for $449 each year.
• FreshBooks Partner Program: FreshBooks is popular with service-based businesses. If that’s who you plan to serve, consider certifying with them. Accountants can join their partnership program, which includes skills training beyond the certification.
• Xero Partner Program: Xero is lesser-known than QuickBooks, but it is also less expensive for what has proved to be a comparable product. You may find that some companies prefer to work with this software, so it is not a bad idea to certify through them.
• IRS Enrolled Agent: If you are not a CPA but want to offer tax return services to clients, consider this certification. The certification requires an initial exam followed by completing a certain number of continuing education credits every three years.

3) Choose a business structure

There are four main types of business structures you can choose for your business. These are: Sole proprietorship, limited liability company (LLC), partnership, and corporation.

The right business structure depends on your business goals, whether or not you want to raise capital, and the amount of personal liability you want to take on.

Bookkeepers who are just starting out often opt for sole proprietorship unless they have additional employees. Once you begin to hire additional staff, consider switching to an LLC or corporation model.

After you decide on your business structure, you will want to follow the necessary steps to register as soon as you can.

4) Find your niche

Your market research, along with your knowledge of your skills, should help you determine your niche. Think of your niche as a clear and specific direction for your business. It doesn’t have to be super small. It can be as simple as serving local businesses under 10 people or companies with an entirely remote workforce.

Also, note that you can hone your niche over time as you clarify which types of clients you love to work with and who love to work with you.

5) Uncover your unique value proposition (UVP)

Your UVP should be informed by both your competitor research, your target client’s main needs, and your unique set of hard and soft skills.

Consider the following questions when determining your UVP:

• What makes you different from all the other bookkeeping businesses in your area?
• What do you offer that clients won't get from larger bookkeeping firms?
• What specific problem do you solve for your clients beyond basic bookkeeping?
• Do you have a particular industry you understand through and through?
• What are your strengths as a bookkeeper? Are you supremely meticulous and time-efficient (very important to a prospective client during tax season)? Do you offer a more personable approach to your work?

Again, you don’t have to come up with the perfect answer—it can change over time. However, find the UVP that feels right to you now and leverage it in all your marketing. Repetition of your UVP on your website, business cards, and all other marketing materials will help define your company’s identity to potential clients.

6) Define your target market

The goal here is to discover through your research the type of clients who will help you reach your financial goals (meaning they can afford to pay you what you’re worth) and whose needs line up with your services.

Work on your target market at the same time as your niche and UVP. The work you do on one will help to clarify the others.

7) Pick your business name

Your business name needs to be:

1. Easy to remember
2. Clear
3. Identifiable
4. Reflective of the service you provide

Stay away from long, complicated, or cutesy names. They’re likely to be forgotten as soon as they’re heard or read. If you’re having trouble with your business name, try a business name generator to jumpstart your imagination.

As you search for the right business name, check that the name is available as a domain for your website. The last thing you want is to come up with the perfect name only to find that it’s already taken.

Once you’ve settled on a business name, secure the matching domain, business email address, and social media handles for any channel you intend to use.

8) Design your service menu

Base your services on the intersection of your clients’ needs and your skillset. It’s okay to start with a smaller list of advertised services and add more as you see the need.

You will also need to determine the price of your services. Look at each of the following to set your rates:

1. What hourly rate will adequately cover your time, expenses, and bookkeeping experience?
2. Will you be full-time or part-time?
3. What is the pricing of other competitors?
4. Will you be working mostly with small business owners or more corporate clients?

Pricing can feel like the most daunting part of starting a business, but remember that you can continue to adjust your pricing over time. Choose numbers that feel like fair value to begin and change them if you discover that they’re off.

9) Get your bookkeeping software

You can’t run a bookkeeping business without great accounting software.

Here are 4 popular bookkeeping software options for you to consider:

1. QuickBooks Online
2. QuickBooks Desktop
3. Xero
4. FreshBooks

Look to certify in each type of accounting software you use to add credibility to your services.

10) Finances

How much does it cost to start a bookkeeping business? Less than you might think. Bookkeeping businesses—especially if you’re the only employee—come with generally low startup costs.

Your initial startup costs may include:

• Business license
• Insurance
• Certifications
• Computer
• High-speed internet
• Software
• Marketing materials (business cards, brochures, website, etc.)

Your costs will increase considerably if you intend to hire an employee right away, but otherwise, you can expect to be up and running for around $1,500 to $2,000.

11) Insurance

Proper small business insurance is an important part of starting a bookkeeping business, but it’s also a pain for many. The process of finding and securing insurance at an affordable rate can seem overwhelming, but it doesn’t have to be.

At Huckleberry, for example, you can get a 60-second estimate and secure your small business insurance entirely online and in as little as 5 minutes.

There are several necessary insurance policies for bookkeepers. Each of them ensures that you are protected from various issues that may arise during your time in business.

The main types of insurance policies you need for your bookkeeping business are:

• General Liability Insurance: Built to cover you if someone makes a claim against you for injury or property damage.
• Workers’ Compensation Insurance: Essential the minute you hire an employee. Calculate your estimated workers’ comp premium here. (Psst...already have an employee but need insurance? Here’s why buying workers’ comp online is a great idea.)
• Business Property Insurance: Covers property loss, theft, or damage in most cases.
• Professional Liability Insurance: Also known as errors and omission insurance. This is a big one for bookkeepers, as it’s made to protect you in the case of a bookkeeping error that financially harms a client.
• Business Owner’s Policy: Provides you with multiple insurance policies, including general liability, business property, and commercial auto insurance.

12) Paperwork and other procedures

Still a couple more steps to go! At this point, your head might be spinning with all the info. We get it. It takes a lot to stay sane as an entrepreneur. In the end, however, it will all be worth it. Your bookkeeping business will be up, running, and raking in the big bucks.

Okay. Now, let’s talk about paperwork and procedure.

You’ll need to do the following to set up your bookkeeping business:

Register your business name

In many cases, registering your business is as easy as simply registering your business name. However, the type of business model you choose and your location will affect the business registration process.

Apply for an EIN

Your EIN is your Employee Identification Number. An EIN gives you several benefits and is a necessary component of starting a bookkeeping business.

Obtain any needed permits or licenses

The process for getting your business license is different for each of the 50 states. Check your state’s specific licensing requirements for details.

Open a business bank account

A business bank account keeps your personal and business finances separate. As a bookkeeper, you already know this is important come tax time.

Get a business credit card

Like a business bank account, a business credit card allows you to differentiate between personal and professional spending. It also builds business credit and gives you additional financing to help with the initial growth of your business.

13) Prepare for employees

You may not want to hire employees right away, but prepare yourself now, so the process is easier in the future. You can research how to hire employees and download or bookmark any necessary forms like the W-4 and W-9 through the U.S. Department of Labor website.

You may also look to become a limited liability company and potentially even office space at the time you hire on employees, so bear those regulations and costs in mind as well.

14) Marketing

Naturally, you want to spend the majority of your time serving clients. However, you need to know how to attract and land bookkeeping clients. That’s where a marketing strategy comes in.

Before you choose your marketing strategy, get clear on the answers to these questions:

• Who is your target customer?
• Where do they spend their time? Online? In the world?
• What is your UVP?
• What marketing channels will be best to reach them?

We’ve already talked about your ideal customer; your market and client research should help to inform you where they spend their time. We’ve also gone over your UVP. Now let’s look at some common marketing channels you can use to promote your business.

Your website

This will likely be your most important marketing asset. Your website is where you can drive all your traffic from other marketing channels. It holds information about you, your business, and your services. It’s also a place for you to clarify for your potential clients why they should want to work with you. You can build your website yourself, but if you have the budget invest in a web designer and copywriter to help build it for you. You’ll also need to learn some basic Search Engine Optimization (SEO) practices or hire someone to help you.

Email marketing

Email marketing sits near the top of the list of effective marketing channels. You can grow your list through your website and create simple campaigns to start. As you increase your email marketing know-how, you can develop more complex campaigns to reach prospective clients.

Social media

Social Media Marketing (SMM) can help you build your brand and develop your authority in your niche. Once you learn where your target audience spends their time online, choose to market through just those channels. For example, you might find that the small businesses you want to work with have a strong presence on LinkedIn. You don’t need to be on every platform—just the ones that help you reach more prospective clients. The main SMM channels are:

• Instagram
• Facebook
• Pinterest
• TikTok
• YouTube
• Twitter
• LinkedIn

Start with one platform and add more as time and budget allow. It takes time to become a great marketer on even a single social media platform, so be patient, and allow yourself to experiment with different types of content.

Google My Business

Google My Business helps get you found on—surprise, surprise—Google. It’s free and simple. Just register your business name and create a profile. Google My Business can help you get found on search and connect with local clients.

Word-of-mouth

Word-of-mouth is still the champion of all marketing tactics. Use your personal network, professional network, and—when you start to get them—client referrals to spread the word about your business in your local community and beyond.

15) Continue your education

You made it! You now know how to start your bookkeeping business—exciting, isn’t it? You’re about to start an adventure, and just like any great adventure, you’ll need more help along the way.

Bookmark these resources to keep learning about what’s new in the bookkeeping industry, best client practices, and how to grow your business.

• QuickBooks Connect virtual conference
• Journal of Accountancy
• QuickBooks blog
• AIPB Tips for Bookkeepers

Congratulations on your new business—we can’t wait to see how far you go!

Ready to tackle your small business insurance? We’re here to help.

You’ve got enough going on. You don’t need to struggle with your insurance. At Huckleberry, we can get you a quote in 60 seconds. Like what you see? We can have you covered by insurance in as little as 5 minutes. Best part? It’s entirely online. Yeah. We’re doing a happy dance, too.