New MIP - hopefully!

LouiseH

Hi All

Please could you answer some questions for me? I appreciate so of them may seem idiotic but I want to make sure of the facts before I commit!

1 Can I start my practice while I am working full time until income is enough to compensate?

2 Can I apply for MIP licence as soon as I am MAAT? (This should be next week!)

3 I have no idea what to charge! Where can I research fees? I have looked at other websites but with liited luck. Should I charge per hour?

4 I want to start with basic bookkeeping i.e accounts up to trial balance, bank rec etc is this possible or are potential clients likely to want more?

5 I will advertise in local papers and free papers but what kind of clients can I expect? I am guessing mostly sole traders.

Many thanks for your help! I may well have more questions but thats it for now.

Kind regards
Louise

bigmuggsy

Hi

I had my own company whilst still working full time in a small practise, my friend and I took the plunge in February and set up on our own - things are going well, hopefully have our 100th client by the end of the year so I know the problems & concerns faced when starting out as an MIP.

I'd give you the following advice;

1) You can start your own practise as I did, what I would say (from personal experience!) is, if your currently employed in an accountants, be careful that you don't cause conflict between your employer - I personally wouldn't tell anyone your starting on your own apart from those you can trust. Some employers don't appreciate staff having other jobs, especially if there's the possibility you may take clients you've built a rapport up with. I found it difficult to not try and promote my own business during working hours so be careful.

2) Yes you can - the process takes around 2 weeks. Also I took advantage of the Professional Indemnity Insurance offered by the AAT - something you must have.

3) I base my fees on two areas - company turnover and work involved. As a rough estimate for a company with a turnover of £100k I'd look to charge around £500 for preparation of accounts, submission to Comp House, calculation of tax liability, submission of SATR/CT600 etc. This could vary however. For a VAT return between £60-£100 depending on size, for payroll around £5 per employee a month, various other charges for company formation, capital gain/inheritance tax advice etc. I do very little book keeping, again it depends on the size of the the work involved but look to charge in the region of £20-£30 per hour.

4) It is possible to do this but then your really more of a book keeper than an accountant. I would stress to not do any work which you don't have knowledge of. If you not 100% sure you can give sound tax, accounts, VAT, payroll advice etc. I'd be careful not to advertise as an accountant for now. Stick as a book keeper or try and sub work out to a friend/collegue etc who has the relevant knowledge on the particular sectors. Don't try and do tax returns, limited company accounts etc yet - getting it wrong will loose you clients and could potentially cost you a lot of money.

5) You can expect any type of clients to get in contact, will usually be small limited companies or sole traders. But only if your lucky! You will tend to find it very very difficult at first to get clients, the best form of advertising is word of mouth so get the word around your family, friends, trusted collegues etc that your setting up on your own and see how you go. We've had a few clients from the local paper but most got recommended to contact us. Get yourself flyers, business cards, leaflets etc and post them round the local area, also advertise on shop windows even on the radio if you can afford it!
Networking is also not a bad way of advertising, search the web and see what events are in the local area.

You could also apply for a grant if possible - here in Liverpool there is a company called Blue Orchid which offer free grants to new local businesses in the area.

Hope this helps somewhat, the trick is to be patient it takes a long time to build up a practise, especially in he current economic climate. Feel free to get in touch if you want any more advice, best of luck and keep saying what we say in work every day - this time next year we'll be millionaires!!!

Regards


Mike