Advice - Setting up a business

Mafrofro

Hi all,

I'm MAAT and currently studying CIMA and would like to set up my own business but I'm a bit unsure where to start. I've read the info on AAT.org but I could do with something a bit less "get a licence, read these regulations and go for it etc" and more of a step by step.

I'm currently an assistant management accountant so my main experience is in industry than practice so im a little out of my depth.

Any information would be greatly appreciated

Thanks,
Rosie

knightyo

Hi Rosie

There a million people on here who are probably better qualified to answer this but I have just been through the AAT MIP application process and thought I'd share my experience with you.

First of all, I'd check with CIMA if there are any practicing restrictions with your student membership. (for example, ACCA don't let students carry out any business activities other than 'basic' bookkeeping) If they say it's OK, you're good to go.

Make sure your CPD is up-to-date and fill in your CPD record. This is also a good exercise to see where you may need refresher courses or more study.

I then sat down and wrote a business plan. It may seem a bit daunting at first but this really is important. You can access templates from the internet if you need to. It really helps you to think about what you want, how you are going to achieve it and just basically makes you think! As part of this, I researched my competition and potential client base (to the point of obsession!) and thoroughly worked out pricing (I have decided to offer a monthly service charging by direct debit but this is something you need to look into, it might not be best for you). I also worked out what I needed to earn on a daily basis so I could work out holidays, what services I wanted to offer etc.

I trawled various forums and the internet for any relevant articles or discussions regarding setting up on my own. This forum has been particularly helpful.

You need to think carefully about a business name and consider whether to be a sole trader or Limited Company (remember, AAT won't allow MAAT as part of the business name). If you are going to trade as a sole trader, it might be worth setting up a Limited company with your business name to secure the name for future use. You would have to submit dormant company accounts though and all necessary company secretarial paperwork but these are things you might want to consider. If you are going to be a sole trader, you will need to register for self-employment with HMRC, get set-up for self assessment and national insurance.

With regards to the application, its pretty self explanatory. You will need to get a Continuity of Practice agreement in place with someone (a friend of mine who has her own business signed for me). This means if you are unable to work, they will cover your work and clients for you. Some people ask on the AAT forum if they have no-one available.

You will need PII insurance as well. I have mine with Trafalgar (who are linked to AAT). You may also want to look at Business Interruption insurance.

You will need to register with a body to be regulated for Money Laundering Regulations - again I did this with AAT but you can choose another body to regulate you.

You will need to register with the ICO regarding Data Protection (cost £35).

You will need to give evidence of Practice Management experience. I haven't worked in Practice for several years but the AAT said this did not matter. If you need any help with it, just let me know.

If you got your CPD in order initially, this will help when filling in the CPD section (Services I wish to offer). Just be aware that you need to be able to demonstrate CPD in all services you wish to offer. And more importantly, be confident and knowledgeable in the services you are offering.

Research software and hardware thoroughly (if you are going to be using any). I've gone with VT, Taxfiler and Moneysoft. I've got a great laptop and a super duper printer. Also, research Cloud software.

I have a free website which I made through WIX which is simple and smart. I didn't waste too much time on it as I personally don't believe a website will generate much business. It's more there for if people hear of me and want to check me out! I am just waiting to add an AAT logo (if I get my MIP status! - fingers crossed) and the AAT give you special wording to put on your website and any stationery. I've got some business cards which I have on hand to whip out as well!

If you are working from home, consider the Business rates side of things and make sure you notify your insurance company. Consider a separate business line and maybe advise neighbours if you will have clients coming to your home.

Having capital behind you really helps but I understand that some people just don't have that luxury.

If you are accepted for MIP status you can start to worry about the clients! I've managed to get some lined up already - I'll be buggered if I don't get MIP! Think about your market and who you want to attract. I have picked up people through word of mouth. Don't be afraid to know what sort of client you want and the ones you don't want!

Sorry for the long winded post, I've probably missed a load of things out but I hope this helps in some way.

Best of luck to you, I genuinely hope you do well

Ange

knightyo

Oh God, I'm sorry for the massive post everyone, please don't chuck me out

Mafrofro

Thank you so much for this! I really appreciate it and it's definitely the type of advice I was after. So far all the information I've had was a bit vague!

I wish you the best of luck with your business and if you fancy keeping in touch then just let me know

knightyo

@Mafrofro No worries Let me know how you get on and just message me if you need any help with the form.

hkaur92

Hi @knightyo

I'm also in the process of starting a business but as a Franchise Partner. The information you've provided above is really helpful, so thanks! Would you know if as a Franchise partner I would need to apply for MIP?

My second question is, I'm a MAAT and currently applying for AAT license, is it only the PII that is relevant for Business Insurance for a limited company?

Look forward hearing back from you

Harinder

Neillaw

Hi Rosie

I've moved over from industry to start my own practice, as a management accountant you will be familiar with a lot of the items you'll cover.

The area you'll need to look at would be your tax knowledge, due to being more cost orientated you may have become rusty on the changes to tax legislation and allowances.

It may be worth taking some book-keeping jobs to start with until your caught up. However you do have some advantages over practice accountants as being a MA you tend to be naturally more inquisitive about the figures instead of the profit being the profit.

Thanks
Neil

knightyo

@hkaur92 I'm so sorry I haven't replied sooner, I've been in Cornwall and couldn't get WiFi! I'd think you would need to apply for MIP even if you are a Franchise partner but this is something to check with the AAT themselves. I'd give them a quick phone call.

With regard to insurances, PII is a must but there are other insurances to consider. If you have an employee or even plan to take on a temp, you must have Employers Liability. If you have any members of the public coming to your premises, it is worth looking at Public Liability Insurance as well. If you are working from home, there may be implications with regards to home insurance. I'd give your insurance company a ring to find out. Other ones to consider are Business Interruption Insurance or Directors & Officers Insurance (google them for a breakdown).

Hope this helps!

Ange

hkaur92

Hi @knightyo and @mrme89 Sorry this is a late reply! Thanks for your response! Appreciate the advice given. I managed to give AAT a ring as you explained they said the MIP status will be changing to AAT License membership so I'm guessing it's all the same procedure but MIP status will be known as AAT License Member.

About the Insurance, I managed to find a decent insurance company that fits with the AAT guidelines. So all is good so far I hope

Thanks again!

Harinder

M_Zak

Very helpful discussion.. Thanks @knightyo
I have worked in practice for 6 years and about a year ago moved to industry.. As I was working in practice I wasn't allowed to offer accountancy services or become MAAT (possibility of taking clients, especially the ones I worked closely with)
Now working in industry I find I have a lot more time on my hands and don't need to worry about offering accountancy services

I'm having trouble with the MIP application form as I haven't had 'Work experience gained in past 12 months'
Would this affect my application?

knightyo

Hi M_Zak,

No it shouldn't affect your application. Like you, I had been out of practice for nearly 5-6 years. Detail all your previous work experience in the "Work Experience" box and anything that you do in industry would go in the "Work Experience in last 12 months" box. It doesn't have to be in practice, I used my current job as my basis and detailed my prior experience as well. Do you work in finance in industry? As long as you have detailed what you can do and what you intend to do and how (ie: any relevant future training, keeping up-to-date with tax updates etc.) you will be fine. I wanted to offer Tax services but obviously hadn't been in practice for 5 years. So I made sure I got up-to-date with the relevant legislation, purchased an accounts software package which I used as a training tool, spoke to other friends that are currently in practice about changes in legislation etc, took the relevant AAT courses with regards to various different taxes, purchased Tolleys Tax guide(s) and also downloaded some ACCA/ATT past exam papers and answers which I did religiously. This all counts. Then they need to know what you intend to do to further your training/experience. Just be truthful, look into additional courses/refresher courses. I signed up to a tax update service on @MarieNoelle's advice (Nicola Ross Martin) and took advantage of CCH (which comes with AAT MIP Membership. Just make sure you are confident and competent in each service you want to offer. For example, I wasn't confident about Inheritance Tax so I didn't select it. Best advice I can give is to fill it in as best you can with all your prior experience then try and think of everything you do in your current job that can possibly relate to it as well. I hope this helps in some way!

Ange