How to build a CA practice from scratch
Ever dreamed of setting up your own practice? Find out what works, and what doesn’t, from four chartered accountants who did.
- These accountants recommend utilising CA ANZ resources and making the most of its diverse network of members.
- When starting out, use smart apps and helpful software solutions to cut down administrative headaches.
- Go into the endeavour with confidence in yourself and hire employees you can be just as confident in.
By Cameron Cooper
Photo Shannon Morris
Hosting client meetings in your own office-cum-whisky bar is not on the wish list for most accountants. Then again, Andrew Van De Beek FCA, the founder of Victorian accounting firm Illumin8, is not your typical accountant. A decade ago, age 26 and bored with “putting numbers in boxes” at a traditional practice, he considered his career options – encourage a culture shift with his boss, join a more progressive firm, or go it alone. He chose the latter and today runs a thriving cloud-based accounting and bookkeeping practice that prides itself on being different. Illumin8’s clients are typically entrepreneurial, with family and small businesses from sectors such as the creative industries, e-commerce, alcohol, trades and hospitality.
The firm is set to unveil its new headquarters in Mornington, about 60km south of Melbourne, in early 2022, and a whisky bar will be the showpiece of the premises. “So we can have that for client meetings, functions or just general Friday afternoon debauchery,” says whisky aficionado and music-lover Van De Beek, whose business was named Fast-Growing Firm of the Year at the 2021 Australian Accounting Awards.
He sees Illumin8 and the whisky bar as proof that business dreams do not have to conform to stereotypes. “You can still achieve your goals by thinking outside the box,” he says.
Picture: Andrew Van De Beek FCA.
Back yourself and understand your vision
Offering more than just their accounting expertise is a smart way for start-ups and newer firms to stand out, says Amanda Gascoigne FCA, an accountant and business coach for small and solo accounting practice owners.
Based close to Newcastle in New South Wales, Gascoigne started her home-based CA firm in 1999 when the concept was not as widely accepted and probably less doable.
She insists that “you can bring your personality to your firm.” In her case, a bright, colourful office is a signal to her clients about her style, while her status as an author, blogger and technology adopter is also instructive.
“The added advantage of being yourself is that you appeal to the people you want to appeal to – and you attract your ideal client.”
Picture: Amanda Gascoigne FCA.
From day one, Gascoigne advises practice owners to “start the way you want to finish” and think about five key elements:
- your vision for your practice and life
- your perfect client
- your ideal service offering and pricing
- your preferred team and practice culture
- your ideal technology suite.
While cloud technology and subscription-based accounting platforms have made it easier for CAs to run their own practices, it may not be the right choice for everyone. “The barriers to entry are quite inexpensive, but that doesn’t mean everyone is cut out for it,” warns Gascoigne.
In Cairns in tropical Queensland, Cheryl Overlack CA agrees that setting up a new firm is not for the faint-hearted. “You have to be ready,” she says. “You have to be mentally prepared for the change and have some financial security to do it.”
Picture: Cheryl Overlack CA.
After getting a taste of working from home during COVID-19, Overlack and her husband, Kaine Overlack, quit a large firm in which they had both been working for 20 years to establish Overlack Accounting Group early in 2021. They had lost some of their passion for a 9 to 5, time-billing accounting job and wanted to enjoy the Cairns lifestyle and be more available to their two children.
Auckland accountant Martyn Ecroyd CA is also backing himself to succeed after opening the virtual doors to his practice, Aspire Accounting, in September 2021.
What works, and what doesn’t
Van De Beek now has about 20 staff and credits the firm’s rapid growth to his decision to offer four employees equity in Illumin8. (Their skills cover bookkeeping, accounting and technology.)
Van De Beek says the result is better, more informed decision-making. “As the adage suggests, if you want to go fast, go alone,” he says. “If you want to go far, go together.”
Another imperative has been to hire employees who are comfortable with Illumin8’s culture and who have a life outside accounting. “If I can’t have a chat with someone at the pub for 15 minutes, I’m probably not going to hire them,” he says.
Technical tests are a given when recruiting, but Van De Beek also rounds out the onboarding with a “cultural interview” featuring questions that have nothing to do with the job.
“It’s absolutely pivotal for us to ensure that when I plonk someone on a chair in an office, at home, at a party, wherever, that they can respectfully and comfortably be themselves while also respecting other people as well.”
Gascoigne believes founders of new firms who have left old jobs should have a sense of how many hours they want to work, and their expected earnings. Resist taking a big pay cut if possible and favour set and minimum pricing for services. “It takes the emotion out of quoting and pricing.”
To ease her way into business two decades ago, Gascoigne contracted back to her former firm for 20 hours a week for six months.
On the networking front, Gascoigne has over the past four-and-a-half years fostered a cohort of about 800 members through her initiative The Balanced Firm Community, an online group that is both a chance to connect with others and to generate revenue for her consulting arm after the group’s move off Facebook in recent months to a new platform.
“A lot of people are suffering in silence and thinking they may not be doing it right,” she says. “You don’t need to be alone.”
Gascoigne has always embraced technology as an investment for her practice and its clients, rather than seeing it as a cost.
In addition to using platforms such as Xero and MYOB, nascent firms can benefit from using other smart apps and software that bring efficiencies. For example, Overlack says FYI (document management) and Annature (e-signing) have been especially helpful, while Van De Beek endorses tools such as Futrli (business forecasting), Practice Ignition (client engagement and commerce) and Dext (receipt capturing).
What are the biggest challenges?
Pricing can be one of the big headaches for new firms. Illumin8 has a fixed-price monthly billing policy that Van De Beek dubs “lay-by for your accounting services”. Clients get a service package that covers predictable accounting and advisory work for 12 months, as well as some client-support activities. Additional charges apply for services outside that standard package.
While the system stretches the admin team in June and July, the pay-off is that the firm can lock in its workflow for the upcoming financial year. Van De Beek says it also helps mitigate the perennial concern for most small businesses – cash flow.
Overlack has adopted value-based billing, saying she spent “way too long filling out six-minute unit timesheets” in the past. She thinks it also helps build stronger relationships with clients who do not like bill shock and want to have a cup of coffee with their accountant without being charged for the time.
For Ecroyd, the toughest areas to get his head around include anti-money laundering policies and the lack of an in-office support network. “It’s definitely lonely sometimes,” he says.
To help overcome this, Ecroyd has joined networking groups through Chartered Accountants Australia and New Zealand and elsewhere to share knowledge and just catch up. He has been pleasantly surprised at how forthcoming people are to talk and offer advice.
“In accounting, we have an abundance mindset where we’re willing to share and do the best for clients. It’s not a competing nature at all.”
Picture: Martin Ecroyd CA.
"As long as you’re open to sharing your best ideas, then people tend to share with you, too."
Just do it
Although she admits that running a private business has been much tougher than expected, Overlack has no regrets about making the transition with her husband and credits COVID-19 with giving them the push they needed to change. “We really love it and I don’t know if I’d be able to go back to working in an office every day,” she says.
Ecroyd is also relishing his new pathway and encourages other accountants who are in the early stages of running their own firm, or contemplating going it alone, to think about where they want to be in five years.
“Close your eyes, envision the future, then write it on a bit of paper and make it happen,” he says. As Van De Beek eagerly awaits pouring the first whisky at Illumin8’s new bar, he advises others to follow their personal and professional passions and then work out what will distinguish their firm.
“Starting an accounting firm isn’t particularly hard. Running a successful one is,” he emphasises. “Put the time and effort into understanding that baseline.”
Start me up
Have a financial buffer: Cheryl Overlack CA says she and her husband, Kaine, made sure they were financially secure before setting up their firm. “Without that I’m not sure we’d have been able to do it.”
Take ownership of your firm: Andrew Van De Beek FCA recalls a rant some years ago when he attributed some of the firm’s problems to a former partner who had amicably exited the firm months earlier. “Then I realised I was trying to blame him for everything and he was not even here any more. One of the big lessons I learnt was that you have to take responsibility and ownership for the direction of your firm.”
Share ideas with others: Martyn Ecroyd CA encourages networking with other like-minded accountants and being prepared to give away valuable tips and ideas. “As long as you’re open to sharing your best ideas, then people tend to share with you, too.”
Reset and rebuild
For owners of existing practices who may have lost their joy or drive, there are options.
You can sell your practice outright, merge, offload a portion of your fee base as part of a wind-down, or you may even want to lower your stress and join another firm as an employee.
Above all, disenchanted firm owners need to reset their priorities, advises business coach Amanda Gascoigne FCA.
“Some of my clients realise they have grown, but not with purpose,” she says. “They’ve got to a point where they’re not enjoying what they do.
It’s about getting rid of that stress and loving being an accountant again.”
For one overwhelmed client, Gascoigne suggested cutting her client base by 30% to ease the workload and release any clients who were not the right fit. Twelve months on, the client is making similar money, but with far less anxiety.
Gascoigne says firm owners should constantly check in with themselves to ensure their business vision remains fulfilling. Scale back before you scale up and re-evaluate your client base, pricing, services and technology.
“So many people think the answer is just getting more clients, but it’s really about getting more ideal clients and getting everything in sync.”
Our interviewees recommend the following resources.
- Martyn Ecroyd CA says the CA ANZ Tools and Resources Hub, including the engagement letter tool, has been a godsend in start-up mode. He also recommends the association’s mentoring and support program, as well as The Gap, an international business advisory and networking portal.
- Cheryl Overlack CA endorses CA ANZ’s checklists and templates, saying they have been “worth their weight in gold”.
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