2 Ways to Grow Your Bookkeeping Business

For the sake of argument, let’s say you’re a bookkeeper.

Let’s take this spectacular fantasy one step further and imagine you’ve been doing this for a few years. And, finally, you’re doing this as a solo business owner. Have you transported yourself to this magical world? Perfect, let’s continue.

You’ve developed some excellent skills, and you’re feeling more comfortable with the challenges your clients throw at you.

You’re getting the urge to grow your small business bookkeeping practice. You enjoy the work you do, but you want to take things to the next level.

2 ways to grow your bookkeeping business

There are two basic ways to grow your business; vertically or horizontally. Don't worry; if you're new and interested in starting a bookkeeper business, this applies to you too.

Grow your bookkeeping business vertically.

This method is what a lot of people think of when you talk about growing a business. The process goes like this:

• Get a client and perform basic bookkeeping for businesses
• Find another client and perform the same set of services
• Repeat this until you have maxed out the available hours in the day
• Hire more bookkeepers to do the same set of services with more clients
• Lather, rinse, repeat until you have taken over the bookkeeping world

It is an excellent and conventional approach to growing a business. It’s probably the method I would suggest for most bookkeepers. Keeping your service offerings small and simple makes delivering good quality service much more manageable. You can get set up on a standard set of tools, which will make it easier to work with, to train clients on, and to add support staff down the road.

I think this is a great time to pick one software platform. In fact, I wrote a post about this very topic. Check out my post about choosing the right bookkeeping software for more tips on that topic.

If you set your services at a fair fixed monthly fee, you have given yourself the potential to grow a very successful business.

You’ll need to have a good client acquisition strategy for this method. Either through advertising or word of mouth from your first clients, you’ll need to be able to add new clients regularly.

This method is especially good for natural leaders who enjoy working alongside others in a team. Once you grow enough to require extra help, you will slowly become a manager first, and a bookkeeper second. Of course, if this doesn’t describe you, there’s another way.

Grow your bookkeeping business horizontally.

By comparison, this method is excellent for people who love working with their clients, are willing to put in the hours, but maybe don’t love the idea of being a manager and hiring staff.

The difference is that instead of adding more clients who get the same services, you add more services to your existing clients.

As I mentioned in the previous post, “What Is A Bookkeeper?”, a common set of tasks define the term “bookkeeper.” This set would be the core of your services. Things like:

• Recording financial transactions
• Reconciling business bank accounts
• Accounts Receivable
• Accounts Payable
• Managing cash flow
• Financial reports
• Accounting software setup - basic
• Coordinating with a tax preparer or accountant

Your list may vary. There are some standard services you can offer as add-ons, such as:

• Payroll
• Cleaning up their old books
• Tax preparation
• Accounting software support and training - basic/intermediate

These will have to be services you can comfortably perform, so you’re bringing value to your clients. These will increase your fees, but also make you more valuable to your client. Plus, if you’re anything like me, you just enjoy digging further into a business to learn how it works.

If you want to dig even deeper, and you have the interest and skills, you can offer even more services. Here are a couple of examples.

• Financial data analysis
• Forecasting
• Advanced accounting software setup, support, and training

There are many companies out there that are big enough to benefit from these services, but maybe too small to warrant having an accountant on retainer.

Data analysis, forecasting, and budgeting are often the kinds of services that an accountant provides. And for a good reason. Accountants train for many years to provide valuable insight into how to structure and grow your business. And if your client has particularly complex tax requirements, suggest an accountant unless you have a high level of training.

If these are services you are skilled at providing, it’s an opportunity to shine. You can offer these services for a premium, while still saving your clients money.

Or why not use both methods to grow your bookkeeping business?

Either of the first two methods would be a good option. If you find yourself drawn to both, the 3rd option is to combine both ways.

You could develop a small group of clients who receive a basic set of services that work well for them. And, for 1 or 2 clients who start to grow, you could expand your offerings. This way, you get a steady source of income spread across many clients, but also the chance to dig into the numbers on a selected few.

A great scenario for this approach is when you start to grow your team. You could outsource the basic services to your team members, and step into an advisory role in your company. You'd be able to provide advanced services to your clients without having to also juggle the hours of routine tasks.

Which method would you choose?

Are you interested in growing your client base, adding staff and eventually locations across the country? Or are you someone who prefers doing a deep dive into each client’s business?

Or, are you just starting a tax and bookkeeping business and want to figure out which way to take it? If that's the case, why not check out my posts about how to get bookkeeping clients with no experience and how to charge for bookkeeping services.

Please reach out and contact me with your thoughts.If you’re in the middle of a similar expansion in your business, share your stories.