Current services offered by The Sorcerer’s Accountant include:
Tax Services:
Management/Cost Accountant Services:
QuickBooks Services
Current services are either provided entirely by Max Greenwood or available through resources on the The Sorcerer’s Accountant website. Greenwood will provide referrals to credit card processing companies or some speciality consultants when the need calls for it, but focuses his work on general small business services of use to the widest variety of businesses.
The Sorcerer’s Accountant intends to add the following bookkeeping services :
These bookkeeping services will be at a rate of $30 per hour/per bookkeeper for clients. Clients would pay $20 -$25, once benefits and taxes are factored in, for an in-house, part-time bookkeeper, and would still be responsible for training, oversight, and management in that case. The Sorcerer’s Accountant’s rate is very economical once this is taken into account.
The new services will be performed by part-time student bookkeepers who are current undergraduate accounting majors with up to 20 hours per week free to work. Each business will have a consistent bookkeeper assigned to it. The bookkeepers will be trained by Max Greenwood directly in proper techniques. They will all be students in the top 20% of their class with at least one professional recommendation and one educational (professor) recommendation. This is a business model which has been successful in other cities where there is ample student labor, such as New York City.
To add additional value, the bookkeeping manager, a graduate student pursuing an MBA in accounting, will supervise and audit the work of the bookkeepers, answering their questions when questions arise, and providing quality assurance. The bookkeeping manager will review the QuickBooks files and reports created by the bookkeepers to ensure that they follow proper formats and are prepared correctly.
The small business accounting market consists of virtually every small business in the United States. As businesses grow larger than one person sole proprietorships, they generally require expert help with at least their tax preparation, and often with additional bookkeeping and accounting services. Even many non-employer sole proprietorships will use accounting help at some point. While some small businesses hire bookkeepers or CFOs directly, many successfully outsource these types of services.
The accounting service market as a whole includes the following:
The market of small businesses in Chicago for The Sorcerer’s Accountant represents approximately 85,000 businesses in 2010. It has been divided into three groups:
Non-employer firms: Without employees, these firms do not have many of the concerns of larger businesses. However, the owners must be vigilant to protect their own tax liability and sort out how their personal and business tax returns intersect. These firms are generally buyers of QuickBooks services and tax preparation services. As they grow, this group becomes ripe for outsourced bookkeeping services before they can hire an full-time in-house bookkeeper.
Very small businesses: Made up of businesses that are designed to stay small and those which are growing through a phase, these businesses require payroll services, bookkeeping, and tax preparation. They are concerned about losing control, but can generally be convinced of using outsourced accounting and bookkeeping with cost analysis. With the stakes higher, these businesses can make greater use of management accounting services, especially as most cannot afford a dedicated CFO. Many do not need a full-time bookkeeper, but can make do with part-time help, which limits their hiring options.
Other small businesses: Many of these businesses will have some in-house financial management and bookkeeping help. However, they may be able to save money by outsourcing these services, as they are not generally core to what the business seeks to do. These businesses may be comfortable with their situation as a cash producer for their owners or intent on growing or positioning themselves for sale.
Market Analysis | |||||||
2010 | 2011 | 2012 | 2013 | 2014 | |||
Potential Customers | Growth | CAGR | |||||
Non-employer Firms | 4% | 50,000 | 52,000 | 54,080 | 56,243 | 58,493 | 4.00% |
Very Small Businesses (2 to 10 employees) | 4% | 25,000 | 26,000 | 27,040 | 28,122 | 29,247 | 4.00% |
Other Small Businesses (11 to 99 employees) | 4% | 10,000 | 10,400 | 10,816 | 11,249 | 11,699 | 4.00% |
Total | 4.00% | 85,000 | 88,400 | 91,936 | 95,614 | 99,439 | 4.00% |
The Sorcerer’s Accountant will focus on the “very small business” target group for its bookkeeping services as this group can make the most consistent use of part-time bookkeepers. The type of student bookkeepers whom these businesses would hire are generally students of the same kind. However, these businesses often do not have the resources to provide proper oversight or training to their bookkeepers, and will suffer from not having the leverage to hire the cream of the crop. The Sorcerer’s Accountant can provide the solution to these problems.
The small business accounting industry consists of numerous independent accountants and bookkeepers as well as many small firms. Larger firms tend to pursue medium and large business clients.
Accounting and bookkeeping services are purchased by owners and top managers of small businesses. They will contact businesses by phone and generally meet in person (at the client’s office) to interview and discuss the prospect of working together.
Major competitors in the Chicago market include:
For bookkeeping services, the business also must compete indirectly against the prospect of businesses hiring their own part-time bookkeepers. This gives businesses the advantage of greater control and perhaps development of a future full-time employee. If the hire works out, the cost can be lower for a business than an outside service. However, this can lead to employees who are not as well-educated or experienced as bookkeepers through a bookkeeping service who have worked with a range of businesses. Generally, the cost is lower in the long run with a bookkeeping service, as training is done more systematically and supervisors are more regimented and experienced.
To choose between competitors, factors considered by clients include:
The website for The Sorcerer’s Accountant presents a simple, uncluttered look which holds a great deal of information about services offered beneath its surface and beyond its homepage. The purpose of the website is to assure clients and potential clients of the expertise of the company and then inspire them to call for a phone or in-person consultation.
To redevelop the website for the new bookkeeping services to be offered, additional service pages will be created for each subset of the bookkeeping service as well as a main page presenting the value proposition and benefits to clients of the services. All areas will offer description to be clear about what services are and are not offered, but will be focused on client benefits.
To market the website, many of the current tactics will be maintained, but supplemented.
Most of these marketing activities will be executed by the marketing services firm contracted by Sorcerer’s Accountant as Greenwood does not have the time or expertise to execute them himself.
The website will be expanded with additional information about best practices of bookkeeping services. Max Greenwood will devote 40 hours to developing this content within two months of the launch of the service.
The website redevelopment will require the marketing service partner for the business to create new pages based on the template already set by the existing website. All copy will be written by Max Greenwood. Graphics and design elements will be added by the marketing partner. There is not a need for e-commerce, a back-end, or other functionality for the website.
To promote the business to its target of businesses with 2 to 10 employees, The Sorcerer’s Accountant will:
The Sorcerer’s Accountant will achieve a competitive edge among Chicago bookkeeping services due to its combination of CPA oversight with lower-level, inexpensive labor. Clients will receive the advantage of having a CPA review their books and propose additional advice when appropriate, while not paying much more than they would to hire their own part-time bookkeeper.
This is not an inimitable competitive edge, but the market in Chicago is large enough to allow for the success of Sorcerer’s Accountant with this strategy. Large firms ignore the small business market because they are better positioned to serve larger businesses. They are unlikely to imitate this strategy as they will find it difficult to convince small businesses that they can offer services which are affordable to them.
The Sorcerer’s Accountant will use the following marketing tactics to reach its target market of very small businesses (2 to 10 employees) with its new bookkeeping services:
The marketing messages will focus on the economics of the decision to use outsourced bookkeepers from The Sorcerer’s Accountant and the advantage of CPA oversight with Greenwood’s experience and track record.
Marketing also encompasses the search for student bookkeepers. Job listings will be posted at local universities and promote the learning involved in the position and the "leg up" it can give students for accounting positions upon graduation. We will recruit the best student bookkeepers possible. The costs associated with this hiring are only the time of Max Greenwood.
The sales strategy for The Sorcerer’s Accountant’s new bookkeeping services is to attempt to sell the service predominantly to existing clients, especially at first before marketing pays off with new inquiries. This will require Max Greenwood to inform all existing clients by phone about the idea, once he has determined that they are qualified to use the service. Whenever possible, clients will be approached during regularly scheduled calls and meetings so as to not require a great deal of additional prospecting time.
Greenwood will then ask clients directly for referrals to other businesses and business owners they know who may be right for the bookkeeping services. Greenwood will seek to contact two referrals per day. When and if existing clients and referrals are exhausted, Greenwood will engage in cold calling to likely prospects he has heard about from other businesses.
The result of this initiative of direct selling is expected to be at least five clients within the first couple of months, as many current Sorcerer’s Accountant clients appear extremely ready for this service and trusting of Max Greenwood.
Unit prices represent the average project cost for tax services ($750), cost accounting projects ($1,000), and QuickBooks services ($300). Bookkeeping services are set at $30 per hour. Direct unit costs are very low for all of these services as they are primarily labor services. Tax projects incur a 5% cost for printing and travel, cost accounting projects incur 3% cost, primarily for travel. QuickBooks services are generally given remotely and sales of QuickBooks are done directly to the vendor (Greenwood Accounting receives a commission on software sold). Bookkeeping services incur a 50% cost of sales as the bookkeepers are paid at $15 per hour.
Total sales are expected to rise significantly with the success of the bookkeeping services revenue stream. The existing revenue streams are projected to grow at slow rates, as Max Greenwood cannot take on much additional work. They are not projected to grow at all in 2010, as Greenwood will spend additional time on the establishment of the bookkeeping services. Furthermore, these revenues will drop by 20% in the first quarter as additional time is spent by Greenwood on hiring, training and launching this revenue stream.
The sales forecast assumes part-time bookkeepers working 20 hours per week. These will grow from 2 bookkeepers working below capacity at the start of 2010 to 3 by the end of 2010, to 4 in 2011 and 8 by the end of 2012. Revenues will begin in the second month after training in the first month of 2010. This growth rate is made possible by the intention to do everything possible to retain clients and grow with them, as well as to actively seek referrals to other businesses from each client. Two levels of oversight (Greenwood’s oversight over the Bookkeeping Manager, and the Bookkeeping Manager’s oversight over all bookkeepers) will improve quality assurance and the chances of a high level of client retention and satisfaction.
Direct cost of sales are very low for the business as most costs are fixed. Travel to client sites, printing and paper, and other direct supplies for clients are the only direct costs for services provided directly by Greenwood. The direct labor of student bookkeepers for the bookkeeping services is $15 per hour, or 50%. Wages for non-billable hours (training periods) for new bookkeepers are listed in the Personnel table.
Sales Forecast | |||
2010 | 2011 | 2012 | |
Unit Sales | |||
Tax Preparations | 125 | 130 | 135 |
Cost Accounting Analysis | 60 | 63 | 65 |
QuickBooks Services | 57 | 59 | 62 |
Bookkeeping Hours | 1,570 | 3925 | 7850 |
Total Unit Sales | 1,812 | 4,177 | 8,112 |
Unit Prices | 2010 | 2011 | 2012 |
Tax Preparations | $750.00 | $750.00 | $750.00 |
Cost Accounting Analysis | $1,000.00 | $1,000.00 | $1,000.00 |
QuickBooks Services | $300.00 | $300.00 | $300.00 |
Bookkeeping Hours | $30.00 | $30.00 | $30.00 |
Sales | |||
Tax Preparations | $93,600 | $97,500 | $101,250 |
Cost Accounting Analysis | $60,300 | $63,000 | $65,000 |
QuickBooks Services | $17,100 | $17,700 | $18,600 |
Bookkeeping Hours | $47,100 | $117,750 | $235,500 |
Total Sales | $218,100 | $295,950 | $420,350 |
Direct Unit Costs | 2010 | 2011 | 2012 |
Tax Preparations | $37.50 | $37.50 | $37.50 |
Cost Accounting Analysis | $30.00 | $30.00 | $30.00 |
QuickBooks Services | $0.00 | $0.00 | $0.00 |
Bookkeeping Hours | $15.00 | $15.00 | $15.00 |
Direct Cost of Sales | |||
Tax Preparations | $4,680 | $4,875 | $5,063 |
Cost Accounting Analysis | $1,809 | $1,890 | $1,950 |
QuickBooks Services | $0 | $0 | $0 |
Bookkeeping Hours | $23,550 | $58,875 | $117,750 |
Subtotal Direct Cost of Sales | $30,039 | $65,640 | $124,763 |
To execute the milestones listed, Max Greenwood will make liberal use of an outside marketing service firm (OF denotes outside firm on the table) which will manage the execution of the marketing activities listed. Greenwood will directly execute the sales activities listed through his work with clients.
$4,000 of these costs will be incurred at the end of 2009 and are included in operating costs on the past performance table.
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Redevelop Website | 12/1/2009 | 1/1/2010 | $2,500 | MG (OF) | Marketing |
List Website on Databases | 1/1/2010 | 1/15/2010 | $500 | MG (OF) | Marketing |
Change Yellow Pages ads | 1/1/2010 | 1/15/2010 | $500 | MG (OF) | Marketing |
Search Engine Marketing | 1/1/2010 | 12/31/2010 | $12,000 | MG (OF) | Marketing |
Expand Website Best Practices Section | 12/1/2009 | 2/28/2010 | $0 | MG | Marketing |
Redevelop Brochure | 12/1/2009 | 1/1/2010 | $1,000 | MG (OF) | Marketing |
Print New Brochures | 1/1/2010 | 1/15/2010 | $3,000 | MG (OF) | Marketing |
Promotion to Clients | 1/1/2010 | 1/31/2010 | $0 | MG | Sales |
Promotion to Client Referrals | 2/1/2010 | 2/28/2010 | $0 | MG | Sales |
Develop Print Ad | 12/1/2009 | 12/15/2009 | $500 | MG (OF) | Marketing |
Run first print ads | 2/1/2010 | 2/15/2010 | $5,000 | MG (OF) | Marketing |
Totals | $25,000 |
Max Greenwood is CEO and sole manager of The Sorcerer’s Accountant. With the launch of bookkeeping services, Greenwood will oversee a part-time bookkeeping manager who will oversee the work of the bookkeepers. The manager will be in an MBA or MS accounting program with professional work experience and bookkeeping experience, preferably at the start of his or her graduate school program so that he or she can work through the program’s two years and then be considered for a move to a full-time position in year three. This manager will work from the Sorcerer’s Accountant office or remotely, checking in with the bookkeepers by email and phone to remain apprised of the situations and problems they are facing. The manager will be present for the bookkeepers’ training by Max Greenwood, so he or she will be aware of their responsibilities and requirements.
Periodically, the manager will visit the bookkeepers on-site and also request to audit their work directly to spot any problems before they become issues for the clients. Any issues with the bookkeepers will be reported by the clients to the bookkeeping manager directly. He will either handle them himself or report to Greenwood for help.
Greenwood will remain in close contact with the bookkeeping manager and review work samples from the bookkeepers at least once a month.
Direct cost wages for student bookkeepers’ billable hours are listed in the Sales Forecast. The wages shown for student bookkeepers in this table represent only training periods (non-billable hours) when new bookkeepers join the business. We will start with two part-time bookkeepers at the start of 2010, and increase to three midyear, adding a fourth in the second year and doubling the student bookkeeping staff to eight total in the third year.
Employee benefits are 10% of payroll and are provided only for the management.
Personnel Plan | |||
2010 | 2011 | 2012 | |
Bookkeeper training-period wages | $1,200 | $400 | $1,600 |
Max Greenwood | $60,000 | $65,000 | $70,000 |
Bookkeeper Manager | $24,000 | $28,800 | $48,000 |
Benefits | $8,400 | $9,380 | $11,800 |
Total People | 5 | 6 | 10 |
Total Payroll | $93,600 | $103,580 | $131,400 |
The financial plan of the business requires growth financed by positive cash flows from operations. Additional outside investment or owner investment is not necessary. The new business line is not capital-intensive, but will increase fixed costs of the business which must be covered almost immediately by additional revenues from bookkeeping sales. This is feasible because it is expected that at least five current clients will use the service without hesitation as they are ready to start using a bookkeeper or outsource their current bookkeeping.
The business will grow the number of part-time bookkeepers with the business over these next three years. In the first year, two bookkeepers will work at less than 20 hours per week each for several months before reaching capacity, and a third bookkeeper will join us mid-year. A fourth part-time bookkeeper will be added in year two, and four more will be added in year three.
Our monthly revenue break-even is based on the fixed costs of running the current business along with the old lines of business. This is a significant increase from the 2009 break-even point. The increased marketing activity, capacity, payroll, benefits, and computer expenses for the new bookkeeper, insurance for the new line of business, and cost of sales to hire bookkeepers drives this break-even point higher.
Break-even Analysis | |
Monthly Units Break-even | 141 |
Monthly Revenue Break-even | $16,926 |
Assumptions: | |
Average Per-Unit Revenue | $120.36 |
Average Per-Unit Variable Cost | $16.58 |
Estimated Monthly Fixed Cost | $14,595 |
The Sorcerer’s Accountant actually expects its gross margin to fall as it takes on bookkeepers to fulfill the new bookkeeping service. This will move from the firm’s gross margin from being in line with a non-employer firm to a contractor firm that provides labor to businesses. The growth in revenues will offset this drop in gross margin and produce steady growth in net profit. Marketing will include the activities listed for 2010 in the milestones table as well as additional runs of print ads in local publications beyond the first few months. This expense will drop somewhat in future years as marketing returns to the business’s focus on referrals and word-of-mouth from clients.
Rent and utilities will not grow significantly, as only Greenwood and the bookkeeping manager will work out of the office space. Insurance will grow to cover the added liability of additional employees working in client spaces. Payroll taxes are set at 15% of payroll and the bookkeeping labor items. Employee benefits are 10% of payroll and are provided only for the management. January will be a month of additional setup training to bring the new bookkeepers and manager online and install additional software and computers. Software and computer expenses to provide accounting software for the laptops of student bookkeepers and to continue to upgrade the systems of the business will grow. In the first year, this includes a computer and software set-up for the bookkeeping manager.
Pro Forma Profit and Loss | |||
2010 | 2011 | 2012 | |
Sales | $218,100 | $295,950 | $420,350 |
Direct Cost of Sales | $30,039 | $65,640 | $124,763 |
Other Cost of Sales | $0 | $0 | $0 |
Total Cost of Sales | $30,039 | $65,640 | $124,763 |
Gross Margin | $188,061 | $230,310 | $295,588 |
Gross Margin % | 86.23% | 77.82% | 70.32% |
Expenses | |||
Payroll | $93,600 | $103,580 | $131,400 |
Marketing/Promotion | $38,500 | $20,000 | $20,000 |
Depreciation | $0 | $0 | $0 |
Rent | $18,000 | $18,720 | $19,469 |
Utilities | $2,400 | $2,496 | $2,596 |
Insurance | $5,000 | $7,000 | $8,000 |
Payroll Taxes | $14,040 | $15,537 | $19,710 |
Software and Computer Expenses | $3,600 | $4,000 | $6,000 |
Total Operating Expenses | $175,140 | $171,333 | $207,175 |
Profit Before Interest and Taxes | $12,921 | $58,977 | $88,413 |
EBITDA | $12,921 | $58,977 | $88,413 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $3,876 | $17,693 | $26,524 |
Net Profit | $9,045 | $41,284 | $61,889 |
Net Profit/Sales | 4.15% | 13.95% | 14.72% |
The expansion of the business can be undertaken with the current cash reserves, even accounting for a cash loss over $10000 in February, 2010 as the marketing and set-up expenses for the new business line must be paid. The business will return to positive cash-flow in the second quarter. The fact that the part-time bookkeepers will only be deployed on paying jobs lowers the risk of this new business line to the cost of the bookkeeping manager and marketing. Significant cash reserves can be built up in future years for an acquisition or additional service expansion or the owner can take dividends as shown.
Pro Forma Cash Flow | |||
2010 | 2011 | 2012 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $109,050 | $147,975 | $210,175 |
Cash from Receivables | $105,612 | $144,145 | $204,055 |
Subtotal Cash from Operations | $214,662 | $292,120 | $414,230 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
Subtotal Cash Received | $214,662 | $292,120 | $414,230 |
Expenditures | 2010 | 2011 | 2012 |
Expenditures from Operations | |||
Cash Spending | $93,600 | $103,580 | $131,400 |
Bill Payments | $111,643 | $149,376 | $220,816 |
Subtotal Spent on Operations | $205,243 | $252,956 | $352,216 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $20,000 | $60,000 |
Subtotal Cash Spent | $205,243 | $272,956 | $412,216 |
Net Cash Flow | $9,418 | $19,164 | $2,013 |
Cash Balance | $29,418 | $48,582 | $50,596 |
The net worth of the business will improve if the new business line succeeds as expected. Additional external financing will not be needed and the debt of the business will remain low.
Pro Forma Balance Sheet | |||
2010 | 2011 | 2012 | |
Assets | |||
Current Assets | |||
Cash | $29,418 | $48,582 | $50,596 |
Accounts Receivable | $10,730 | $14,560 | $20,680 |
Other Current Assets | $5,000 | $5,000 | $5,000 |
Total Current Assets | $45,148 | $68,142 | $76,276 |
Long-term Assets | |||
Long-term Assets | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 |
Total Assets | $45,148 | $68,142 | $76,276 |
Liabilities and Capital | 2010 | 2011 | 2012 |
Current Liabilities | |||
Accounts Payable | $10,708 | $12,418 | $18,663 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $10,708 | $12,418 | $18,663 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $10,708 | $12,418 | $18,663 |
Paid-in Capital | $10,000 | $10,000 | $10,000 |
Retained Earnings | $15,396 | $4,441 | ($14,276) |
Earnings | $9,045 | $41,284 | $61,889 |
Total Capital | $34,441 | $55,724 | $57,613 |
Total Liabilities and Capital | $45,148 | $68,142 | $76,276 |
Net Worth | $34,441 | $55,724 | $57,613 |
The Sorcerer’s Accountant is compared here to the “Office Administrative Services” industry of under $500,000 in revenues. Comparison to the other closest industry, “Tax Preparation Services,” is less useful because of the differences created by the new revenue line.
Sorcerer’s Accountant does not hold substantial current or long-term assets, besides some office equipment and a rental security deposit. The assets of the business are primarily the human and knowledge assets of Max Greenwood, and the resources presented on the Sorcerer’s Accountant website which are not recognized here. This explains the differences in asset ratios.
Gross margins will be higher than industry averages, as employees will be contracted directly to clients only for the bookkeeping services and not for the accounting services of the business. However, S G & A will be higher than the industry averages because of the need for an extra level of management to oversee the employees.
Ratio Analysis | ||||
2010 | 2011 | 2012 | Industry Profile | |
Sales Growth | 24.63% | 35.69% | 42.03% | 3.34% |
Percent of Total Assets | ||||
Accounts Receivable | 23.77% | 21.37% | 27.11% | 14.34% |
Other Current Assets | 11.07% | 7.34% | 6.56% | 53.58% |
Total Current Assets | 100.00% | 100.00% | 100.00% | 70.11% |
Long-term Assets | 0.00% | 0.00% | 0.00% | 29.89% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 23.72% | 18.22% | 24.47% | 37.94% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 54.53% |
Total Liabilities | 23.72% | 18.22% | 24.47% | 92.47% |
Net Worth | 76.28% | 81.78% | 75.53% | 7.53% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 86.23% | 77.82% | 70.32% | 59.56% |
Selling, General & Administrative Expenses | 82.08% | 63.87% | 55.60% | 28.35% |
Advertising Expenses | 17.65% | 6.76% | 4.76% | 1.21% |
Profit Before Interest and Taxes | 5.92% | 19.93% | 21.03% | 8.19% |
Main Ratios | ||||
Current | 4.22 | 5.49 | 4.09 | 1.24 |
Quick | 4.22 | 5.49 | 4.09 | 1.18 |
Total Debt to Total Assets | 23.72% | 18.22% | 24.47% | 92.47% |
Pre-tax Return on Net Worth | 37.52% | 105.84% | 153.46% | 696.33% |
Pre-tax Return on Assets | 28.62% | 86.55% | 115.91% | 52.41% |
Additional Ratios | 2010 | 2011 | 2012 | |
Net Profit Margin | 4.15% | 13.95% | 14.72% | n.a |
Return on Equity | 26.26% | 74.09% | 107.42% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 10.16 | 10.16 | 10.16 | n.a |
Collection Days | 29 | 31 | 31 | n.a |
Accounts Payable Turnover | 10.78 | 12.17 | 12.17 | n.a |
Payment Days | 29 | 28 | 25 | n.a |
Total Asset Turnover | 4.83 | 4.34 | 5.51 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.31 | 0.22 | 0.32 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $34,441 | $55,724 | $57,613 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.21 | 0.23 | 0.18 | n.a |
Current Debt/Total Assets | 24% | 18% | 24% | n.a |
Acid Test | 3.21 | 4.31 | 2.98 | n.a |
Sales/Net Worth | 6.33 | 5.31 | 7.30 | n.a |
Dividend Payout | 0.00 | 0.48 | 0.97 | n.a |
Sales Forecast | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||
Unit Sales | |||||||||||||
Tax Preparations | 8 | 10 | 11 | 16 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |
Cost Accounting Analysis | 5 | 4 | 2 | 2 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | |
QuickBooks Services | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | |
Bookkeeping Hours | 0 | 50 | 70 | 90 | 100 | 120 | 140 | 160 | 180 | 200 | 220 | 240 | |
Total Unit Sales | 17 | 67 | 88 | 113 | 121 | 141 | 161 | 181 | 201 | 221 | 241 | 261 | |
Unit Prices | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Tax Preparations | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | $750.00 | |
Cost Accounting Analysis | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | |
QuickBooks Services | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | $300.00 | |
Bookkeeping Hours | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | |
Sales | |||||||||||||
Tax Preparations | $6,000 | $7,200 | $8,400 | $12,000 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | $7,500 | |
Cost Accounting Analysis | $4,800 | $3,600 | $2,400 | $1,500 | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | |
QuickBooks Services | $1,200 | $1,200 | $1,200 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
Bookkeeping Hours | $0 | $1,500 | $2,100 | $2,700 | $3,000 | $3,600 | $4,200 | $4,800 | $5,400 | $6,000 | $6,600 | $7,200 | |
Total Sales | $12,000 | $13,500 | $14,100 | $17,700 | $18,000 | $18,600 | $19,200 | $19,800 | $20,400 | $21,000 | $21,600 | $22,200 | |
Direct Unit Costs | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Tax Preparations | 5.00% | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 | $37.50 |
Cost Accounting Analysis | 3.00% | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 | $30.00 |
QuickBooks Services | 0.00% | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Bookkeeping Hours | 50.00% | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 | $15.00 |
Direct Cost of Sales | |||||||||||||
Tax Preparations | $300 | $360 | $420 | $600 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | |
Cost Accounting Analysis | $144 | $108 | $72 | $45 | $180 | $180 | $180 | $180 | $180 | $180 | $180 | $180 | |
QuickBooks Services | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Bookkeeping Hours | $0 | $750 | $1,050 | $1,350 | $1,500 | $1,800 | $2,100 | $2,400 | $2,700 | $3,000 | $3,300 | $3,600 | |
Subtotal Direct Cost of Sales | $444 | $1,218 | $1,542 | $1,995 | $2,055 | $2,355 | $2,655 | $2,955 | $3,255 | $3,555 | $3,855 | $4,155 |
Personnel Plan | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||
Bookkeeper training-period wages | $800 | $0 | $0 | $0 | $0 | $0 | $400 | $0 | $0 | $0 | $0 | $0 | |
Max Greenwood | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | |
Bookkeeper Manager | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | |
Benefits | 10% | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 | $700 |
Total People | 4 | 4 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 5 | 5 | |
Total Payroll | $8,500 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 | $8,100 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 |
Pro Forma Profit and Loss | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||
Sales | $12,000 | $13,500 | $14,100 | $17,700 | $18,000 | $18,600 | $19,200 | $19,800 | $20,400 | $21,000 | $21,600 | $22,200 | |
Direct Cost of Sales | $444 | $1,218 | $1,542 | $1,995 | $2,055 | $2,355 | $2,655 | $2,955 | $3,255 | $3,555 | $3,855 | $4,155 | |
Other Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $444 | $1,218 | $1,542 | $1,995 | $2,055 | $2,355 | $2,655 | $2,955 | $3,255 | $3,555 | $3,855 | $4,155 | |
Gross Margin | $11,556 | $12,282 | $12,558 | $15,705 | $15,945 | $16,245 | $16,545 | $16,845 | $17,145 | $17,445 | $17,745 | $18,045 | |
Gross Margin % | 96.30% | 90.98% | 89.06% | 88.73% | 88.58% | 87.34% | 86.17% | 85.08% | 84.04% | 83.07% | 82.15% | 81.28% | |
Expenses | |||||||||||||
Payroll | $8,500 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 | $8,100 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 | |
Marketing/Promotion | $10,000 | $3,000 | $3,000 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | |
Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Rent | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
Utilities | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Insurance | $5,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Payroll Taxes | 15% | $1,275 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 | $1,215 | $1,155 | $1,155 | $1,155 | $1,155 | $1,155 |
Software and Computer Expenses | $2,500 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Total Operating Expenses | $28,975 | $13,655 | $13,655 | $13,155 | $13,155 | $13,155 | $13,615 | $13,155 | $13,155 | $13,155 | $13,155 | $13,155 | |
Profit Before Interest and Taxes | ($17,419) | ($1,373) | ($1,097) | $2,550 | $2,790 | $3,090 | $2,930 | $3,690 | $3,990 | $4,290 | $4,590 | $4,890 | |
EBITDA | ($17,419) | ($1,373) | ($1,097) | $2,550 | $2,790 | $3,090 | $2,930 | $3,690 | $3,990 | $4,290 | $4,590 | $4,890 | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Taxes Incurred | ($5,226) | ($412) | ($329) | $765 | $837 | $927 | $879 | $1,107 | $1,197 | $1,287 | $1,377 | $1,467 | |
Net Profit | ($12,193) | ($961) | ($768) | $1,785 | $1,953 | $2,163 | $2,051 | $2,583 | $2,793 | $3,003 | $3,213 | $3,423 | |
Net Profit/Sales | -101.61% | -7.12% | -5.45% | 10.08% | 10.85% | 11.63% | 10.68% | 13.05% | 13.69% | 14.30% | 14.88% | 15.42% |
Pro Forma Cash Flow | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $6,000 | $6,750 | $7,050 | $8,850 | $9,000 | $9,300 | $9,600 | $9,900 | $10,200 | $10,500 | $10,800 | $11,100 | |
Cash from Receivables | $7,492 | $6,025 | $6,760 | $7,110 | $8,855 | $9,010 | $9,310 | $9,610 | $9,910 | $10,210 | $10,510 | $10,810 | |
Subtotal Cash from Operations | $13,492 | $12,775 | $13,810 | $15,960 | $17,855 | $18,310 | $18,910 | $19,510 | $20,110 | $20,710 | $21,310 | $21,910 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $13,492 | $12,775 | $13,810 | $15,960 | $17,855 | $18,310 | $18,910 | $19,510 | $20,110 | $20,710 | $21,310 | $21,910 | |
Expenditures | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Expenditures from Operations | |||||||||||||
Cash Spending | $8,500 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 | $8,100 | $7,700 | $7,700 | $7,700 | $7,700 | $7,700 | |
Bill Payments | $7,419 | $15,396 | $6,775 | $7,203 | $8,219 | $8,360 | $8,747 | $9,065 | $9,530 | $9,920 | $10,310 | $10,700 | |
Subtotal Spent on Operations | $15,919 | $23,096 | $14,475 | $14,903 | $15,919 | $16,060 | $16,847 | $16,765 | $17,230 | $17,620 | $18,010 | $18,400 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $15,919 | $23,096 | $14,475 | $14,903 | $15,919 | $16,060 | $16,847 | $16,765 | $17,230 | $17,620 | $18,010 | $18,400 | |
Net Cash Flow | ($2,427) | ($10,321) | ($665) | $1,057 | $1,936 | $2,250 | $2,063 | $2,745 | $2,880 | $3,090 | $3,300 | $3,510 | |
Cash Balance | $17,573 | $7,252 | $6,588 | $7,645 | $9,580 | $11,830 | $13,893 | $16,638 | $19,518 | $22,608 | $25,908 | $29,418 |
Pro Forma Balance Sheet | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $20,000 | $17,573 | $7,252 | $6,588 | $7,645 | $9,580 | $11,830 | $13,893 | $16,638 | $19,518 | $22,608 | $25,908 | $29,418 |
Accounts Receivable | $7,292 | $5,800 | $6,525 | $6,815 | $8,555 | $8,700 | $8,990 | $9,280 | $9,570 | $9,860 | $10,150 | $10,440 | $10,730 |
Other Current Assets | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |
Total Current Assets | $32,292 | $28,373 | $18,777 | $18,403 | $21,200 | $23,280 | $25,820 | $28,173 | $31,208 | $34,378 | $37,758 | $41,348 | $45,148 |
Long-term Assets | |||||||||||||
Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Assets | $32,292 | $28,373 | $18,777 | $18,403 | $21,200 | $23,280 | $25,820 | $28,173 | $31,208 | $34,378 | $37,758 | $41,348 | $45,148 |
Liabilities and Capital | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Current Liabilities | |||||||||||||
Accounts Payable | $6,896 | $15,170 | $6,536 | $6,929 | $7,941 | $8,069 | $8,446 | $8,747 | $9,200 | $9,577 | $9,954 | $10,331 | $10,708 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $6,896 | $15,170 | $6,536 | $6,929 | $7,941 | $8,069 | $8,446 | $8,747 | $9,200 | $9,577 | $9,954 | $10,331 | $10,708 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $6,896 | $15,170 | $6,536 | $6,929 | $7,941 | $8,069 | $8,446 | $8,747 | $9,200 | $9,577 | $9,954 | $10,331 | $10,708 |
Paid-in Capital | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
Retained Earnings | ($83,554) | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 | $15,396 |
Earnings | $98,950 | ($12,193) | ($13,154) | ($13,922) | ($12,137) | ($10,184) | ($8,021) | ($5,970) | ($3,387) | ($594) | $2,409 | $5,622 | $9,045 |
Total Capital | $25,396 | $13,203 | $12,241 | $11,474 | $13,259 | $15,212 | $17,375 | $19,426 | $22,009 | $24,802 | $27,805 | $31,018 | $34,441 |
Total Liabilities and Capital | $32,292 | $28,373 | $18,777 | $18,403 | $21,200 | $23,280 | $25,820 | $28,173 | $31,208 | $34,378 | $37,758 | $41,348 | $45,148 |
Net Worth | $25,396 | $13,203 | $12,241 | $11,474 | $13,259 | $15,212 | $17,375 | $19,426 | $22,009 | $24,802 | $27,805 | $31,018 | $34,441 |
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Written by Dave Lavinsky
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their accounting firms.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write an accounting business plan step-by-step so you can create your plan today.
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A business plan provides a snapshot of your accounting business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
If you’re looking to start an accounting firm or grow your existing accounting business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your accounting business to improve your chances of success. Your accounting business plan is a living document that should be updated annually as your company grows and changes.
With regards to funding, the main sources of funding for an accounting firm are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for accounting firms.
How to write a business plan for an accounting firm.
If you want to start an accounting business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your accounting business plan.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of accounting business you are running and the status. For example, are you a startup, do you have an accounting business that you would like to grow, or are you operating an established accounting business you would like to sell?
Next, provide an overview of each of the subsequent sections of your plan.
In your company overview, you will detail the type of accounting business you are operating.
For example, you might specialize in one of the following types of accounting firms:
In addition to explaining the type of accounting business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
In your industry or market analysis, you need to provide an overview of the accounting industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the accounting industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your accounting business plan:
The customer analysis section of your accounting business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, organizations, government entities, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of accounting business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are othe r accounting firms.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes CPAs, other accounting service providers, or bookkeeping firms. You need to mention such competition as well.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a accounting business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type o f accounting company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide auditing services, tax accounting, bookkeeping, or risk accounting services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your accounting company. Document where your company is situated and mention how the site will impact your success. For example, is your accounting business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your accounting marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your accounting business, including answering calls, scheduling meetings with clients, billing and collecting payments, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your accounting business to a new city.
To demonstrate your accounting business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing accounting businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing an accounting business or bookkeeping firm.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer discounts for referrals ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your accounting business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a accounting business:
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of your most prominent clients. Summary Writing a business plan for your accounting business is a worthwhile endeavor. If you follow the accounting business plan example above, by the time you are done, you will truly be an expert. You will understand the accounting industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful accounting business.
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Accounting is required in order to keep track of all of your company’s spending. You will have to spend as well as earn money during your company interactions. You can wind up with a jumble of transactions if you don’t keep good records. That said, accounting firms is critical . Accountants provide clients with a variety of services, including accounts payable and receivable, accounting, and payroll processing. They ensure that financial transactions are both accurate and lawful, and they assist individuals and organizations in understanding the health of their finances through financial statements . Accounting businesses are one of the most lucrative sectors of the economy. In spite of its popularity, you still need a solid plan to guarantee the profitability and success of your business in the long run. You’ve come to the right place! In this article, we provide you with free and ready-to-use samples of Accountancy Firm Business Plans in PDF and DOC formats that you could use for your firm. Keep on reading to find out more!
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A business plan for an accounting firm is a written document that covers a company’s main activities, goals, and methods for reaching those goals. A strong business plan should include an executive summary, goods and services, marketing strategy and analysis, financial planning, and a budget.
Beginning an accounting company is similar to starting any other small business in that it takes a lot of time and effort, which is why you need a business plan. An Accountancy Firm Business Strategy Template may help you create the foundation you need to create a well-written and well-structured plan. You may do so by selecting one of the excellent templates shown above. If you wish to write one on your own, use the steps below as a guide:
Although the executive summary is the first component of a business plan, many business owners write it last, after all of the other sections have been completed. The executive summary summarizes the plan’s material and serves as an overview. It comprises your accounting firm’s aims and mission, as well as a description of your accounting services and how they vary from those offered by competitors. Your work premises, company equipment , and staff are also described in the executive summary.
You determine who your clients are in the market analysis section by demographic data such as age, gender, and socioeconomic status. Because accounting services may be supplied to both organizations and people, you can categorize your clients according to their size or kind of business, such as small business owners or fitness gyms. Determine the appropriate marketing techniques to reach them, such as display advertising , tax articles in trade journals they read, or networking at local groups they would join, once you’ve established your market.
Make a list of your management team’s names and responsibilities. Include their education and experience in relation to starting and running a successful accounting firm. Next, list the daily duties that must be accomplished in order to run the accounting firm and who is accountable for ensuring that they are completed.
Make a financial statement for the accounting firm that displays current and predicted costs and income for the coming year. Give details about your assets, such as your equipment, and your obligations, such as your debts. Describe your financial risk management and catastrophe recovery strategy.
An accountant is a person who manages bookkeeping and creates financial papers such as profit-and-loss statements, balance sheets, and other financial paperwork. They conduct audits of your books, create tax returns, and handle all of the financial data that comes with running a business.
Although obtaining a certified public accountant license isn’t essential to open an accounting firm, it does limit the sorts of accounting services that can be provided.
Income per partners income as a percentage of fees are the two most popular metrics. The most lucrative businesses earn more than 40% of fees, with income as a percentage of fees ranging from 30–35 percent.
A business plan, in general, is a documented blueprint for a company’s marketing, financial, and operational goals. To help you get started, download our easily customizable and comprehensive samples of Accountancy Firm Business Plans today!
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Written by Dave Lavinsky
You’ve come to the right place to create your Accounting business plan.
We have helped over 5,000 entrepreneurs and business owners create business accounting plans and many have used them to start or grow their accounting firms.
Below is a template to help you create each section of your Accounting business plan.
Business overview.
DeSanta & Co is a new accounting firm located in Indianapolis, Indiana. We provide a full suite of accounting services to local businesses, including bookkeeping, accounting, and tax services. Our combined decades of expertise and client-focused service ensures that we will become the #1 accounting firm in the next five years.
DeSanta & Co is run by Michael DeSanta. Michael has decades of accounting experience and has gained a loyal clientbase from providing his services through competing firms. His expertise, reputation, and loyal clientbase will ensure that our firm is successful.
DeSanta & Co will offer its clients a full suite of accounting services. These services include bookkeeping, accounting, tax services, and auditing. The company will employ a large and diverse staff of professional accountants to ensure we can offer as many services as possible.
DeSanta & Co will serve small and medium-sized businesses located in the Indianapolis, Indiana area. Most of these businesses will have less than 1000 employees and earn a revenue less than $10 million per year. We will also offer limited services to individuals, such as tax prep and help.
DeSanta & Co’s most valuable asset is the expertise and experience of its founder, Michael DeSanta. Michael has been a certified public accountant (CPA) for the past 20 years. Throughout his career, he has developed a loyal client base, and many clients have stated that they will switch to DeSanta & Co once the company is established and running. Michael’s combination of skills, accounting knowledge, and loyal following will ensure that DeSanta & Co is a successful firm.
DeSanta & Co will be able to achieve success by offering the following competitive advantages:
DeSanta & Co is currently seeking $400,000 to launch. The funding will be dedicated to the office build out, purchase of initial equipment, working capital, marketing costs, and startup overhead expenses. The breakout of the funding is below:
The following graph below outlines the pro forma financial projections for DeSanta & Co.
Who is desanta & co.
DeSanta & Co is a new accounting firm located in Indianapolis, Indiana that provides local businesses with a full suite of accounting services. We are a small firm but have considerable experience, so we can offer better quality of services than our competition. We expect that our most popular services will include bookkeeping, accounting, and tax services. Our combined decades of expertise and client-focused service ensures that we will become the #1 accounting firm in the next five years.
DeSanta & Co is run by Michael DeSanta. Michael has decades of accounting experience and has gained a loyal clientbase from providing his services through competing firms. After working for several accounting firms around town, he surveyed his clientbase to see if they would be willing to switch to his new company once launched. Most of his clients responded positively, which motivated Michael to finally launch his business.
Upon surveying his clientbase and finding a potential office, Michael DeSanta incorporated DeSanta & Co as an S-Corporation in April 2023.
The business is currently being run out of Michael’s home office, but once the lease on DeSanta & Co’s office location is finalized, all operations will be run from there.
Since incorporation, DeSanta & Co has achieved the following milestones:
DeSanta & Co will provide the following services to its clients:
The accounting industry is essential to the success of other businesses and industries. Accountants record and track financial transactions, which helps businesses ensure they are making a profit. As such, accounting services are always in demand and the industry often sees great growth.
There are several essential services that accounting firms can provide to businesses and individuals. The most popular services include bookkeeping, tax services, advisory services, and valuation and planning. Though most businesses employ their own accountants, many businesses are switching to hiring accounting firms to save on costs.
The accounting industry is expected to grow over the next several years. According to The Business Research Company, the accounting industry is expected to grow at a CAGR of 4.2% from now until 2027. This growth is due to the increasing demand for accountants worldwide. This increase in demand and industry growth ensures that DeSanta & Co will achieve success.
Demographic profile of target market, customer segmentation.
DeSanta & Co will primarily target the following customer profiles:
Direct and indirect competitors.
DeSanta & Co will face competition from other companies with similar business profiles. A description of each competitor company is below.
Perkins & Smith is a small accounting firm that has intentionally remained small so that they can have stronger relationships with their clients. Since they opened in 1960, Perkins & Smith has been one of the leading accounting firms in the Four State Region. They offer a wide range of services including accounting, bookkeeping, payroll services, tax prep and planning, and advisory services. They have built up a loyal clientele and maintained a strong, positive reputation since their opening decades ago.
Premiere Accounting is a large accounting firm that specializes in helping large businesses with accounting, taxes, and similar services. Since opening in 1995, they have acquired a loyal client base, including several multi-billion dollar companies. They employ over a hundred professionals who all have diverse backgrounds. This helps serve their diverse clientele and ensures they are meeting the specific needs of every business that works with them.
Jackson Brothers Accounting is a privately held accountant practice that has been popular in the area since 1985. They offer a wide variety of services including, tax planning and preparation, payroll processing, financial planning, and small business accounting. Though they are open to helping nearly all businesses and sectors, they primarily focus on local small businesses and startups.
DeSanta & Co will be able to offer the following advantages over the competition:
Brand & value proposition.
DeSanta & Co will offer a unique value proposition to its clientele:
The promotions strategy for DeSanta & Co is as follows:
Targeted Cold Calls
DeSanta & Co will initially invest significant time and energy into contacting potential clients via telephone. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting individuals in areas and occupations that are most likely to need accounting services. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base.
DeSanta & Co understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer other businesses by providing economic or financial incentives for every new client produced. This strategy will increase in effectiveness after the business has already been established.
Social Media
DeSanta & Co will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.
Website/SEO
DeSanta & Co will invest heavily in developing a professional website that displays all of the company’s services. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.
The fees and hourly pricing of DeSanta & Co will be moderate and competitive so clients feel they are receiving great value when utilizing our accounting services.
The following will be the operations plan for DeSanta & Co. Operation Functions:
DeSanta & Co will have the following milestones completed in the next six months.
Though he has never run his own business, Michael DeSanta has worked as an accountant long enough to gain an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He also already has a starting client base that he served while working for other accounting firms. He will hire several other employees who can help him run the aspects of the business that he is unfamiliar with.
Key revenue & costs.
DeSanta & Co’s revenues will primarily come from charging clients for the accounting services we provide. We will charge our clients an hourly rate that will vary depending on the services they need.
The notable cost drivers for the company will include labor expenses, overhead, and marketing expenses.
Key assumptions.
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.
Income statement.
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
Revenues | ||||||
Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
Expenses & Costs | ||||||
Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
ASSETS | ||||||
Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
LIABILITIES & EQUITY | ||||||
Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
Share Capital | $0 | $0 | $0 | $0 | $0 | |
Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
CASH FLOW FROM OPERATIONS | ||||||
Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
CASH FLOW FROM INVESTMENTS | ||||||
Investment | ($180,950) | $0 | $0 | $0 | $0 | |
Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
CASH FLOW FROM FINANCING | ||||||
Cash from equity | $0 | $0 | $0 | $0 | $0 | |
Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
What is an accounting business plan.
An accounting business plan is a plan to start and/or grow your accounting business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Accounting business plan using our Accounting Business Plan Template here .
There are a number of different kinds of accounting businesses , some examples include: Full Service Accounting Firm, Bookkeeping Firm, Tax Firm, and Audit Firm.
Accounting businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
Starting an accounting business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop An Accounting Business Plan - The first step in starting a business is to create a detailed accounting business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your accounting business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your accounting business is in compliance with local laws.
3. Register Your Accounting Business - Once you have chosen a legal structure, the next step is to register your accounting business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your accounting business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Accounting Equipment & Supplies - In order to start your accounting business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your accounting business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful accounting business:
Creating a business plan is essential for any business, but it can be especially helpful for accountant businesses who want to improve their strategy and/or raise funding.
A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.
This article provides an overview of the key elements that every accountant business owner should include in their business plan.
Download the Ultimate Business Plan Template
An accountant business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.
An accountant business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.
Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.
The following are the key components of a successful accountant business plan:
The executive summary of an accountant business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.
This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.
If you are just starting your accountant business , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your accountant firm, mention this.
The industry or market analysis is an important component of an accountant business plan. Conduct thorough market research to determine industry trends and document the size of your market.
Questions to answer include:
You should also include sources for the information you provide, such as published research reports and expert opinions.
This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.
For example, the customers of an accountant business may include small business owners, individuals with complex financial situations, or other businesses that need accounting assistance.
You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.
Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or accountant services with the right marketing.
The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.
For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.
This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.
This part of your accountant business plan should include the following information:
The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.
Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for an accountant business include reaching $X in sales. Other examples include adding new products or services, expanding to new markets, or opening new locations.
List your team members here including their names and titles, as well as their expertise and experience relevant to your specific accountant industry. Include brief biography sketches for each team member.
Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.
Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix).
This includes the following three financial statements:
Your income statement should include:
Revenues | $ 336,090 | $ 450,940 | $ 605,000 | $ 811,730 | $ 1,089,100 |
$ 336,090 | $ 450,940 | $ 605,000 | $ 811,730 | $ 1,089,100 | |
Direct Cost | |||||
Direct Costs | $ 67,210 | $ 90,190 | $ 121,000 | $ 162,340 | $ 217,820 |
$ 67,210 | $ 90,190 | $ 121,000 | $ 162,340 | $ 217,820 | |
$ 268,880 | $ 360,750 | $ 484,000 | $ 649,390 | $ 871,280 | |
Salaries | $ 96,000 | $ 99,840 | $ 105,371 | $ 110,639 | $ 116,171 |
Marketing Expenses | $ 61,200 | $ 64,400 | $ 67,600 | $ 71,000 | $ 74,600 |
Rent/Utility Expenses | $ 36,400 | $ 37,500 | $ 38,700 | $ 39,800 | $ 41,000 |
Other Expenses | $ 9,200 | $ 9,200 | $ 9,200 | $ 9,400 | $ 9,500 |
$ 202,800 | $ 210,940 | $ 220,871 | $ 230,839 | $ 241,271 | |
EBITDA | $ 66,080 | $ 149,810 | $ 263,129 | $ 418,551 | $ 630,009 |
Depreciation | $ 5,200 | $ 5,200 | $ 5,200 | $ 5,200 | $ 4,200 |
EBIT | $ 60,880 | $ 144,610 | $ 257,929 | $ 413,351 | $ 625,809 |
Interest Expense | $ 7,600 | $ 7,600 | $ 7,600 | $ 7,600 | $ 7,600 |
$ 53,280 | $ 137,010 | $ 250,329 | $ 405,751 | $ 618,209 | |
Taxable Income | $ 53,280 | $ 137,010 | $ 250,329 | $ 405,751 | $ 618,209 |
Income Tax Expense | $ 18,700 | $ 47,900 | $ 87,600 | $ 142,000 | $ 216,400 |
$ 34,580 | $ 89,110 | $ 162,729 | $ 263,751 | $ 401,809 | |
10% | 20% | 27% | 32% | 37% |
Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:
Cash | $ 105,342 | $ 188,252 | $ 340,881 | $ 597,431 | $ 869,278 |
Other Current Assets | $ 41,600 | $ 55,800 | $ 74,800 | $ 90,200 | $ 121,000 |
Total Current Assets | $ 146,942 | $ 244,052 | $ 415,681 | $ 687,631 | $ 990,278 |
Fixed Assets | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 |
Accum Depreciation | $ 5,200 | $ 10,400 | $ 15,600 | $ 20,800 | $ 25,000 |
Net fixed assets | $ 19,800 | $ 14,600 | $ 9,400 | $ 4,200 | $ 0 |
$ 166,742 | $ 258,652 | $ 425,081 | $ 691,831 | $ 990,278 | |
Current Liabilities | $ 23,300 | $ 26,100 | $ 29,800 | $ 32,800 | $ 38,300 |
Debt outstanding | $ 108,862 | $ 108,862 | $ 108,862 | $ 108,862 | $ 0 |
$ 132,162 | $ 134,962 | $ 138,662 | $ 141,662 | $ 38,300 | |
Share Capital | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Retained earnings | $ 34,580 | $ 123,690 | $ 286,419 | $ 550,170 | $ 951,978 |
$ 34,580 | $ 123,690 | $ 286,419 | $ 550,170 | $ 951,978 | |
$ 166,742 | $ 258,652 | $ 425,081 | $ 691,831 | $ 990,278 |
Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:
Below is a sample of a projected cash flow statement for a startup accountant business.
Net Income (Loss) | $ 34,580 | $ 89,110 | $ 162,729 | $ 263,751 | $ 401,809 |
Change in Working Capital | $ (18,300) | $ (11,400) | $ (15,300) | $ (12,400) | $ (25,300) |
Plus Depreciation | $ 5,200 | $ 5,200 | $ 5,200 | $ 5,200 | $ 4,200 |
Net Cash Flow from Operations | $ 21,480 | $ 82,910 | $ 152,629 | $ 256,551 | $ 380,709 |
Fixed Assets | $ (25,000) | $ 0 | $ 0 | $ 0 | $ 0 |
Net Cash Flow from Investments | $ (25,000) | $ 0 | $ 0 | $ 0 | $ 0 |
Cash from Equity | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Cash from Debt financing | $ 108,862 | $ 0 | $ 0 | $ 0 | $ (108,862) |
Net Cash Flow from Financing | $ 108,862 | $ 0 | $ 0 | $ 0 | $ (108,862) |
Net Cash Flow | $ 105,342 | $ 82,910 | $ 152,629 | $ 256,551 | $ 271,847 |
Cash at Beginning of Period | $ 0 | $ 105,342 | $ 188,252 | $ 340,881 | $ 597,431 |
Cash at End of Period | $ 105,342 | $ 188,252 | $ 340,881 | $ 597,431 | $ 869,278 |
You will also want to include an appendix section which will include:
Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your accountant company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.
The goal of any business plan is to provide a roadmap for the future. A winning accountant business plan does this by providing a detailed overview of your company, its operations, and its financials. If you are seeking funding, your business plan should also include an appendix with your full financial projections and supporting documentation.
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Reviewing sample business plan for accounting firm and researching how to start an accounting business online can provide valuable insights into accounting firm structure. A useful approach is to search for "local accounting firms near me" or "small accounting firms near me." These resources can reveal different sections that ...
Accounting Firm Business Plan Presentation Free Google Slides theme, PowerPoint template, and Canva presentation template This creative illustrated presentation template, perfect for finance professionals, is designed to make your accounting firm's business plan shine.
as liaison between DOI and audit firm, provides reports/data as needed, answer questions, challenges inaccuracies and ensures timely delivery against target dates. The selected candidate will work with the State authorities on the Trust Funds including NJ Best, DCP, and SACT . The candidate will also ensure all data requirements are delivered both
The contractor must utilize the specific DBE firms listed in the approved DBE Commitment to perform the work and/or supply the materials for which the DBE firm is listed unless the contractor obtains written consent in advance from WisDOT. The contractor will not be entitled to payment for any work or materials on the approved
China's hybrid "state capitalist" system, driven by centralized planning and fierce competition, has led to dominance in critical technological fields and emerging markets. Western ...
11:45 AM of the last business day preceding the letting. Submit bidding proposals using one of the following methods: 1. Electronic bid on theinternet. 2. Electronic bid on a printout with accompanying diskette or CD ROM. 3. Paper bid under a waiver of the electronic submittal requirements.
The Justice Department filed an antitrust lawsuit on Friday against the real estate software company RealPage, saying its software enabled landlords to collude to raise rents across the United States.
If that's the case, make sure you include ideas like up-selling small businesses from hourly consultation to quarter contracts. Download this accounting and bookkeeping sample business plan PDF for free right now, or visit Bplans' gallery of more than 550 sample business plans if you want more options. There are plenty of reasons accounting ...
FINANCIAL PLAN. This section should include financial projections, a cash flow statement, a profit and loss statement, a balance sheet, a break-even analysis, and a funding plan (if applicable). [Owner.Company] will generate revenue through the sale of accounting services to businesses and individuals. The firm will also generate revenue ...
4. Provide financial data about your business. Create a financial statement for the accounting firm that details the firm's current and projected costs and revenues for the following year. Provide information about your assets, such as equipment, and your liabilities, such as debts.
Generating This is the financial Funds/Startup projection and costing Capital for starting Five Zero Financial Consulting, LLC; The total fee for incorporating the business in the United States of America - $750. The budget for a basic insurance policy covers, permits and business license - $2,500. Five Zero.
Download a free accounting & bookkeeping business plan template that includes pre-written examples for every section to help you write your own plan. Business Planning. ... Download as PDF Finish your business plan with confidence. Step-by-step guidance and world-class support from the #1 business planning software. Get 50% off LivePlan Now ...
Abstract. This research presents a business plan for an accounting firm to be located in the city of Eskisehir in Turkey which is a developing country. Economic growth has been slow for the past ...
It's a modern business plan template specifically designed for your accounting firm business. Use the example business plan as a guide for writing your own. Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights ...
The total fee for incorporating the business in the United States of America - $750. The budget for basic insurance policy covers, permits and business license - $2,500. The Amount needed to acquire a suitable Office facility in a business district 6 months (Re - Construction of the facility inclusive) - $40,000.
Sales Forecast. Unit prices represent the average project cost for tax services ($750), cost accounting projects ($1,000), and QuickBooks services ($300). Bookkeeping services are set at $30 per hour. Direct unit costs are very low for all of these services as they are primarily labor services.
This pdf is a complete sample business plan for an Agriculture business model. Reviewing this sample is a great way to start planning your business- but as you know, there's still a ... The firm offers tax accounting, management accounting, and QuickBooks set-up and training for small business clients. To move beyond a one person model, the ...
Traditionally, a marketing plan includes the four P's: Product, Price, Place, and Promotion. For a accounting business plan, your marketing strategy should include the following: Product: In the product section, you should reiterate the type of accounting company that you documented in your company overview.
TheFinanceResource.com - Free Accounting Firm Business Plan - Free download as PDF File (.pdf), Text File (.txt) or read online for free. This document is a free business plan template for an accounting firm seeking to raise $150,000 in financing. The accounting firm was founded in 2009 and provides services like bookkeeping, tax preparation, and consulting.
An Accountancy Firm Business Strategy Template may help you create the foundation you need to create a well-written and well-structured plan. You may do so by selecting one of the excellent templates shown above. If you wish to write one on your own, use the steps below as a guide: 1. Make an executive summary.
Accounting Firm Business Plan Template - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free.
accounting-firm-business-plan-example - Free download as PDF File (.pdf), Text File (.txt) or read online for free. The document appears to be an incomplete business plan for an accounting firm called Five Zero Financial Consulting, LLC that will be based in New York City. It includes sections on executive summary, business overview, roles and responsibilities, and SWOT analysis but many ...
This document is a free business plan template for an accounting firm seeking to raise $150,000 in financing. The accounting firm was founded in 2009 and provides services like bookkeeping, tax preparation, and consulting. It is seeking a 10-year loan at a 9% interest rate. The founder has over 10 years of experience in accounting and expects strong growth. The funds would be used for working ...
business plan. But it is not an intimidating process — and a good business plan focuses the mind as well as helping to secure finance and support. The business plan will clarify your main business idea and define your long-term objectives. It provides a blueprint for running the business and a series of benchmarks to check your progress against.
Auditing and Consulting Business Plan - Free download as Word Doc (.doc), PDF File (.pdf), Text File (.txt) or read online for free. TAG Business Consultancy PLC (TAG BC) is a new business consultancy firm being formed by Abaydar Ketema and Tamene Daba in Addis Ababa, Ethiopia. The firm aims to provide accounting, consultancy, and specialized business services to small, medium and large ...
The breakout of the funding is below: Office design/build: $100,000. Office equipment, supplies, and materials: $50,000. Three months of overhead expenses (payroll, rent, utilities): $150,000. Marketing costs: $50,000. Working capital: $50,000. Easily complete your Accounting business plan! Download the Accounting business plan template ...
Business Plan Sample - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. The document is a business plan template for an accounting firm seeking $150,000 in financing. It includes executive summaries of products/services, financing, management, and sales forecasts. It provides outlines and placeholders for sections on company/financing details ...
This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps. Product/Service: Detail your product/service offerings here. Document their features and benefits. Price: Document your pricing strategy here.
A structured guide with worksheets to assist you in the development of your business plan, financial projections, and operating budget. Adapted from materials written by Donald J. Reilly. Southeastern MA Regional Small Business Development Center. 200 Pocasset Street. Fall River, Massachusetts 02721.