If you’ve ever had the desire to work for yourself you’ll know that figuring out the right time to make that leap from employment to self-employment can be painstaking.
Michael Beech FMAAT, set up Michael Beech Accountancy in 2013. He talks about when and why he decided to make the jump, and advice for a soft landing.
Knowing when the time is right
I formed Michael Beech Accountancy in September 2013 after spending the whole summer thinking carefully about it and speaking with my wife. I’d actually been mulling it over for many years but that summer I decided to start doing something constructive towards it. I had a 300 mile a week commute which I didn’t like so the flexibility of working from home really appealed. I mustered up the courage to see if I could make a go of it.
Taking some of the pressure off
It’s very difficult to make a complete jump from full-time employment to running your own business, and it’s probably best to try and stay in your job part-time for a while if you can. For the first few months, I continued to work reduced hours for my employer whilst I built my business. I worked for a large corporate with French and German clients so there was no conflict of interest, and my employer agreed to it. In early 2014 I went full-time with my business, but in hindsight, I probably would’ve worked part-time for a bit longer for some additional financial support.
How to find customers
The first big obstacle I faced was how to find customers.
When you’re the new kid on the block and nobody has heard of you, it’s tough. Year one was very difficult and I did lots of marketing to try and build a client base. It was mainly a mixture of local networking, leafleting and paid digital advertising. If you can get through that first year you’ll gather momentum and it gets easier but I wish I’d known more about the local market and done more research as to how I was going to find customers initially.
Only take on as much work as you feel comfortable with
Knowing what to charge
The other thing I found challenging at first was knowing what to charge. I looked on the AAT forums where there are some real nuggets of information and tried to gauge from those. As time went on, customers would come to me with their accounts and bookkeeping and I could see how other accountants were pricing themselves from the bills in them.
After two or three years I had a good grasp of what competitors were charging and established a personal stance on pricing that I felt happy with – generally charging 5-10% less than other accountants.
Practicalities and costs
I wanted to become a licensed accountant with AAT as part of their members in practice scheme. I had to take out professional indemnity insurance for the AAT’s programme and the AAT were my anti-money laundering supervisors. I also had to sort out ICO data protection.
My biggest start-up cost was setting up my office. I needed to create a working space in my home with a laptop, printer, accounting software and stationary. Another significant outlay was advertising – to build a presence and a brand to attract clients. Five years down the line I don’t advertise anymore, I don’t need to.
Time to grow
In October 2014 I formed a second company in Worcester with a friend and another member of the AAT, Mr Ali Jaw FMAAT, called AM Accounting and Business Advisors.
We decided that two heads would be better than one, and we could share our knowledge and expertise. I also felt that it was good to work with someone else because as a sole practitioner you are on your own quite a bit.
We’ve now got a few sub-contractors who we work with so we’ve built a little team where we can filter work out in order to cope with the expansion of the business. But the main factor that created success was simply doing a good job for people – be yourself and be honest and word will get around which will lead to growth. Most of our business has come from word of mouth.
People, teamwork, technical automation and hard work have been really important in the growth of my businesses but for me, work-life balance is very important. Scale can sometimes overwhelm you if you become too successful. I once went to a talk about having your own business with Henry Cooper, ex-president of the AAT, and one of the things he said was to only take on as much work as you feel comfortable with.
The best things about being your own boss
Having my first ever invoice paid was a really great feeling, but one of the most rewarding things is not monetary, but about lifestyle.
You can’t really put a price on the freedom of working when you want to work, where you want to and dressing how you want to dress.
All AAT members offering bookkeeping or accountancy services must hold a valid licence.
Sophie Cross is a freelance writer and marketer specialising in business and travel. She is the editor for London Revealed magazine and her clients include lastminute.com Group and the Coca-Cola London Eye.