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

  1. Understanding Client Ownership and Ethics
  2. Can You Take Clients With You When Leaving a Tax Firm?
  3. Strategies for Growth: Building and Growing Your Client Base
  4. 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.

Start Fresh

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.

Digital Marketing

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.

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.

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.

startup tax planning by harness wealth

Tax services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness Wealth”. Harness Wealth Advisers LLC is an internet investment adviser registered with the Securities and Exchange Commission (“SEC”). Harness Wealth Advisers LLC solely acts as a paid promoter for unaffiliated registered investment advisers. Harness Wealth Advisers LLC’s registration as an investment adviser with the SEC does not imply a certain level of skill or training.

This document should not be considered tax, legal or financial planning advice. It does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only. To the extent that the reader has any questions regarding the applicability of any specific topic discussed above, please consult a tax, legal and/or financial professional for advice specific to your individual circumstances.