Starting your own accountancy practice is a bit like having your first baby. There never seems to be a good time for it. But if it’s what you’re really hankering after, eventually you just have to bite the bullet and get on with it.
Having said that, while there is no such thing as a good time, some times are undoubtedly better than others. You probably wouldn’t want to start your own practice the week before your first baby is due, for example. And on the face of it, many accountants would not consider 2013 to be ideal timing for them to strike out on their own.
The economies of the developed world are still in the doldrums, the eurozone crisis is rumbling on, households and small businesses are feeling the squeeze and the UK’s national debt keeps growing to the extent that it is predicted to hit 85.6% of our GDP in 2016/17. Ouch.
Nevertheless, research by information provider Bloomsbury Professional has found that entrepreneurial accountants are undeterred by the gloom. Last year the number of new accountancy firm start-ups outstripped closures for the first time since 2008. Overall, there was a net gain of 850 accountancy firms in 2012, following a net loss of 360 firms in the preceding two years.
Martin Casimir, managing director at Bloomsbury Professional, attributed the trend to the market stabilising as the economy recovers from recession. “New firms are joining the market, clients are now willing to increase their spend on finance and accountancy advice, while the firms that survived the recession are financially tougher and less likely to fail,” he said.
But he also pointed out that the recession had changed the landscape of the accountancy profession, resulting in a number of “micro firms” springing up. Essentially, many accountants have been spurred into leaving larger firms and starting out on their own as a result of redundancies, restricted promotion opportunities and low wage growth during the recession. And as Casimir explained, the accountancy market has low barriers to entry: “Potential sole practitioners only need a computer, a spare room and a good knowledge of start-up rules and regulations. Most accountants are more than familiar with these.”
The truth is that a host of successful businesses including software giant Microsoft and courier FedEx were launched during recessions and there’s no reason why your accountancy practice can’t join them. Recessions can be periods of tremendous innovation and enterprises that are founded in challenging times have the advantage of knowing how to survive when the going gets tough in a later business cycle. There are also practical considerations – office space can be cheaper, suppliers more amenable and your competitors may be weakened. And just remember that most people feel the same way about self-employment as they do about parenthood – it may be stressful at times but they don’t regret making that choice.
So is now a good time for you to strike out on your own and start your own practice? There’s only one way to find out.