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Why Start a Bookkeeping Business?

Australia needs bookkeepers!

start a bookkeeping business
It can be daunting knowing where to get your first clients when you start your own business.

EVERY BUSINESS HAS A LEGAL requirement to file an annual tax return, and for some businesses, a quarterly or monthly business activity statement (BAS).

Accurate record keeping and data entry is a crucial component of filing both, and with the increasing number of start-ups and new small businesses in Australia, the demand for a good, reliable bookkeeper has been growing steadily.

People start their own businesses for a variety of reasons, but usually it’s because they need flexibility and want to do work that is rewarding.

For some people, starting their own business is the next natural step in their career – perhaps they’ve worked for many years as hairdresser in someone else’s salon; or worked for someone else as a chef or photographer or builder, and going out on their own just makes good career sense.

Bookkeeping: the low-risk, high reward business option

However, for many, the career path isn’t so clear, or they always may have seen themselves shackled to a job working for someone else. To them, starting a business always seemed like something that hinged on a really great idea or new invention, and in absence of either, it has remained out of their grasp.

But it’s not. Becoming a bookkeeper is an accessible, low-risk new business option for any self-motivated person with good computer skills. You don’t even have to love being a number cruncher to be a good bookkeeper, because most bookkeepers don’t do much number crunching these days anyway.

The multi-talented bookkeeper

With the rise of cloud-accounting software like Xero and MYOB Account Right Live, for which we offer online training courses in both platforms, most bookkeepers set up the bank feeds option for their clients, which automatically matches transactions in their bank account with the transactions in their accounting software. This eliminates much of the grunt work associated with the data entry aspect of bookkeeping, freeing the bookkeeper up to do other things for their clients (like BAS) or even pick up some extra clients.

Increasingly, though, and this is largely due to the number of new bookkeepers who don’t come from a finance or accounting background, many bookkeepers are diversifying in the services they offer by performing other functions within their clients’ businesses. This demand for multi-talented bookkeepers brings me back to what I was saying earlier in this post about the growing number of new small businesses.

With great demand, comes great opportunity

As more people start new businesses, which only looks set to increase over the next couple of years thanks to the many tax breaks included in this year’s federal budget, these businesses require more than a good, reliable bookkeeper; they also need web developers, content marketers, virtual assistants, operational managers, and the like.

Hiring several different contractors to manage each aspect of their business is not only costly – it’s also time consuming. Most business owners would rather hire just one or two contractors who have a broad base of skills – a bookkeeper with administration and operational experience or a content marketer with web design experience, for example.

Develop valuable business skills

A bookkeeper with business administration skills, which can be obtained by enrolling in our Small Business Management Course, is a valuable asset to any business — and it doesn’t mean you have to become a Jack (or Jill) of all trades.

EzyLearn is passionate about helping people start their own bookkeeping businesses, and to this end, we have worked to help develop National Bookkeeping, an Australia-wide network of Australian bookkeepers and registered BAS agents, which helps to match small businesses with a bookkeeping professional that meets their business needs. National Bookkeeping is now looking to expand its network by licensing its business to people who would like to start a bookkeeping business.

Becoming a National Bookkeeping Licensee

Ever since we started delivering our MYOB training courses online, and watched as other tools like Dropbox and WordPress and the many Google apps made it easier and easier for people work entirely from their home office, we’ve wanted to help people to start their own home-based bookkeeping business.

Finally that dream of ours has been realised with our partnership with National Bookkeeping. As part of the National Bookkeeping partnership, we’re offering our Microsoft Word, Microsoft Excel, MYOB and Xero Training Courses to National Bookkeeping licensees.

The reason for this is that we believe that continued learning and professional development is crucial for every business owner, especially if they want to stay ahead of trends and new developments in their industry and if you’re interested in becoming an independent contractor running a bookkeeping business from home then these software programs are essential.

Stay ahead of industry trends

Keeping up with industry developments is something we do as a matter of priority at EzyLearn because we want to be able to provide training courses that are relevant to the latest trends, which is why we’re busy working with some of the top digital marketers and strategists to develop our Content Marketing course.

When you become a National Bookkeeping licensee, you’ll have access to this Content Marketing training course as part of the small business marketing course which is available as an optional extra. This will help you market your services more effectively.

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lifelong learning platform woman online learning for lifeIf you would like to learn more about National Bookkeeping or becoming a licensee, visit the National Bookkeeping website or register your interest online. For more information on starting a bookkeeping business, continue reading our blog, which we constantly update with news and advice on starting a business.

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Small Business Finances: Should You Start Your Business in the Red?

Don't fall into a credit trap by running into debt to finance your small business before you even have your first customer.
Don’t fall into a credit trap by running into debt to finance your small business before you even have your first customer.

The ‘Plan small business finances module‘ of our Small Business Management Course takes students through the steps to creating a financial plan for their small business. Many small businesses get loans and credit from banks and other finance institutions, but how wise is it to get into debt before the doors to your business are even open?

Is Credit the Best Way?

About 20 years ago, the only way businesses could make payments easily was to apply for a credit card from a bank. The bank would then give you an amount of credit, $5000 say, and the more you used it, the more credit you would be offered.

This is great if you have the means to pay it back immediately – and if you do actually pay it back immediately. However, if you’re like most people, having access to large sums of money that can be paid back at a later date – in 30 days, 55 days, 3 months – can lead down a dangerous path for your small business.

Start-Up Finance

We spoke to one entrepreneur who had an idea to start a gourmet packaged meals business aimed at a demographic of busy professionals. He had planned to go the conventional route and borrow $200K to finance his start-up; even though at this point, he didn’t have a single customer.

But there were plenty of other options available to get his business off the ground, rather than getting into debt before he even had his first customer. We suggested using another company’s equipment, contracting the manufacture of the products to another company, or re-branding an already existing product.

The term used in the start-up community for using your own money is called bootstrapping. But it’s one way to guarantee that you will do all the research and determine the most cost efficient way to run your business before outlaying substantial sums of money on equipment or other overheads.

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With new technologies like cloud-based software and high-speed internet, many small business owners have been able to significantly reduce their overheads, which has enabled them to avoid starting their business in the red.

Business is about taking calculated risks for a reasonably predictable reward and it really all comes down to research and knowledge. Live with an asset mentality and don’t get caught in the credit trap. You’ll find out all the best financing options for your small business in our Small Business Management Course.

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When the Price is Right, It’s Not Always Cheap

Don't be a scrooge this Christmas - it's often not best to go cheap unless you intend to stay that way.
Don’t be a scrooge this Christmas – it’s often not best to go cheap unless you intend to stay that way.

WITH CHRISTMAS AROUND THE CORNER, good ol’ Scrooge deserves a mention. In the “Selling Your Products or Services” module of our EzyStartUp Course we cover how to determine the correct prices for your business; a decision many new business owners often don’t realise requires quite a bit of research and planning.

Instead, many people fall into the trap of using their prices as a way to market their new business to potential customers, using the “cheap is best” mentality. Bah — wrong! That may be no better than a Scrooge…

Often cheap is not best, and you need to ask yourself whether those cheap prices you’ll be offering are sustainable.

By that we mean, whether you’ll earn enough to draw a wage that’s commensurate with one you could earn as an employee elsewhere. If the answer is ‘no’, then you need to rethink your pricing structure before you start attracting clientele.

What Kinds of Customers Do You Want?

Because that’s the other thing: the prices you set attract a certain kind of customer. Consider the kind of shopper you would typically find in a department store, like David Jones, with the kind of shopper you would find in Target. Both stores sell fairly similar products, but the prices are different — and, often, so is the customer (although with the amount of sales constantly happening, there’s probably a significant overlap these days).

What a David Jones customer may be happy to pay for a new dress, for example, is likely to be different to what a Target shopper would be happy to pay for a similar item. Even if in this instance, the Target shopper learns that the dress from David Jones is superior in quality and worth the higher price tag (and they may well agree with you) it will probably change nothing: they will still shop at Target.

Low Can be a Loss

That’s not to say cheap is bad. But there is sometimes a high-cost associated with cheap. Consider the price wars between Woolies and Coles over the cost of milk, which Coles reduced to $1 a litre first and saw Woolies quickly follow suit. But who’s the real victor when you’re selling milk for a dollar? Not Coles or Woolies, where the profit margins are between two and minus-three percent, and certainly not the farmers.

If setting low prices is your strategy for winning customers, it may pay more to think of another one, as cheap is easily replicated and not every business can sustain it. Start out how you mean to continue — if you don’t always intend to offer bargain basement prices then don’t offer them at all. Or at least, offer them in a way that makes it clear to potential customers that you don’t intend to always charge those prices.

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One thing is certain: there’s a lot to weigh up in setting prices for your new business, which is why we consider the Selling Your Products or Services module of our EzyStartUp Course such an invaluable one. If you’re starting a new business, don’t sell yourself short. Make sure the price for your services is right, rather than just cheap.