Leaving a top-tier accounting firm to start your own business is an exhilarating yet complex journey. Whether you’re a senior manager, partner, or at an earlier stage in your accounting career, understanding the intricacies of transitioning existing clients, as well as recruiting and retaining new clients, is paramount to your long-term success. In this guide, we’ll dive into all these vital aspects, and outline how Harness Tax can further facilitate your growth and marketing efforts.
Table of Contents
- Understanding Client Ownership and Ethics
- Can You Take Clients With You When Leaving a Tax Firm?
- Strategies for Growth: Building and Growing Your Client Base
- Harness Tax: Your Partner in Growth
Understanding Client Ownership and Ethics
In most accounting firms, the work you do as part of your job often becomes the property of your employer, and taking clients with you when leaving the firm could potentially lead to contractual and ethical challenges. It’s important to fully understand the terms of your employment before making any decisions in this area, and we recommend consulting with an outside attorney as you navigate this process.
Can You Take Clients With You When Leaving a Tax Firm?
When leaving an accounting firm to start your own private practice, there is the chance that you will be leaving your current clients behind. Depending on the terms of your employment with the firm you’ll be leaving, here are three options to consider.
Buy Out Your Book of Business
It’s not always possible, but there are certain employment contracts that senior managers and partners have with accounting firms that allow them to buy out their tax clients. If you’re unsure of whether your employment contract provides you with that option, you should first speak with an outside attorney. In cases where this is possible, the buy-out fee is generally equal to roughly one to two years’ worth of total client fees.
Depending on the number of accounting clients you’re looking to retain, this can certainly grow into a cost that may not be feasible for everyone looking to start their own accounting firm. However, of course, it does offer the benefit and stability of being able to retain clients who already value your service offerings, and with whom you’re already familiar.
Inform Your Clients, But Let Them Decide
If buying out clients from the accounting firm you’ll be leaving is not feasible for you, your next best option is to simply inform those clients that you have decided to start your own firm. It is important not to disparage your prior firm or to actively solicit them to move over to your new firm. Where a client chooses to go for their accounting services is their decision, and neither you nor your firm can control that choice for them.
One additional piece to keep in mind here is that, depending on your employment contract, there may be non-compete terms that prevent you from working with past clients for a certain amount of time. Just like in the previous point on buying out your book of business, before any decisions are made, you should speak with an outside attorney.
If neither of the two above strategies work for you, you’ll find yourself starting from scratch, without any clients of your new accounting firm. This may seem like a daunting situation, but there are many proven strategies to help you bounce back and build a solid foundation of new clients.
There are also benefits to starting fresh, such as being able to define the target audience that works best for your interests and skill set, and it could allow you the time needed to grow your new business at the pace that’s best for you. Additionally, at a larger firm, accountants are likely to only earn a small percentage of the revenue generated, so by going independent at starting fresh, you have a valuable opportunity to design a business model that pays you what you’re worth.
Strategies for Growth: Building and Growing Your Client Base
Build a Robust Network
Any accounting business relies heavily on personal relationships. Engaging with industry peers, attending in-person or virtual events, and fostering trust within your community is essential to client acquisition and client retention.
If you’re looking to find new clients through networking strategies, consider starting with connections you already have, including college or university alumni groups, LinkedIn connections, and past co-workers.
Building from there, consider establishing yourself within your local community. Attend local business meetups, networking sessions at co-working places, or other venues to attract the type of clients you’re looking for.
Your new clients may come from all over the country, and it would be wise to be proactive in building a digital presence for your accounting firm. Content marketing, social media, newsletters, and online ads can all be incredibly powerful in attracting the right types of new clients.
- Content Marketing is the creation of in-depth information on topics relevant to the service offerings of your accounting firm. You might choose to start a blog, or posting on LinkedIn, about tax matters that could help you build authority and an audience of potential clients.
- Social Media can be used as a complement to content marketing, offering you the ability to expand on complex accounting topics in short-form videos on Twitter or Instagram, which allow you to reach a wider audience than content marketing alone.
- Email Newsletters can allow you to keep in touch with potential clients who may not spend as much time on social media, and offer you an alternative way of sharing the content marketing work you’ve done.
- Online Ads can be effective in growing your new accounting firm. The first option that may come to mind is Google Ads, but you can also list your new accounting firm in online directories that individuals use to find the best accountants for their specific needs.
Harness Tax: Your Partner in Growth
If the prospect of marketing and growing your new accounting firm through extensive advertising and networking seems daunting, you’re not alone, and there’s a tailored solution to meet your needs
Harness Tax simplifies the complexities of growing and running a modern accounting practice through an all-in-one solution with access to industry-leading software, sales & marketing support, and administrative assistance to keep your firm running smoothly around the clock.
- Marketing and Sales Support: Through the Harness Marketplace, your tax firm is introduced to a network of potential clients who’ve signed up for the platform and completed their profiles. Our Harness Concierge team then steps in to help schedule calls and close the deal. And through the Harness Blog, we help people discover Harness and the services we provide, through in-depth articles on complex tax and financial planning subjects that best align with the needs of our typical clients.
- Access to Leading Software: We provide our Harness Tax Advisors with access to leading software, ensuring you have everything you need to run a modern tax practice. On their own, platforms such as Bloomberg BNA and Wolters Kluwer CCH Axcess can cost a tax business tens of thousands of dollars per year.
- Administrative Support: Our in-house tax staff offers year-round administrative support with invoicing and client servicing, filing client returns, and other administrative needs to help you not only better serve your existing clients, but enable you to take on more clients more quickly.
Starting a new accounting firm is a multifaceted journey filled with challenges and opportunities. By offering an out-of-the-box solution, we believe Harness is the best way to grow your new firm, and attract the right clients. If you’re ready to take the next step, book your call today and begin your journey towards a thriving tax practice with Harness Tax.