32 Pros & Cons Of Starting A Bookkeeping Service (2024)
Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.
Trying to understand the pros and cons of starting a bookkeeping service?
Here are all of the pros and cons of selling bookkeeping online:
Learn more about starting a bookkeeping service:
Where to start?
-> How much does it cost to start a bookkeeping service?
Need inspiration?
-> Other bookkeeping service success stories
-> Marketing ideas for a bookkeeping service
Other resources
Pros Of A Bookkeeping Service
Pros | Description |
---|---|
Flexibility |
You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
Ability to start your business from home |
It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning! |
Meaningful business connections |
You never know who you will meet as a bookkeeping service. This could be the start of an incredible business opportunity! |
High customer retention rates |
Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
Pick & choose the clients you work with |
Bookkeeping Servicees have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients! |
Gain exposure and experience |
This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you! |
Unlimited income potential |
With starting a bookkeeping service there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make. |
Predictable income stream |
Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless! |
Higher likelihood of getting referrals |
This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product. |
Greater Income Potential |
With this business, the sky is the limit in regards to your income potential. |
You get to do something you truly love |
With starting a bookkeeping service, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful. |
You can decide who you work with |
Gone are the days of working in a toxic work environment with employees that you may not vibe with. As a small business owner, you get to decide who you work and surround yourself with. |
You can work from anywhere! |
Not only can you start your bookkeeping service from home, you can also run your business from anywhere in the world. This is the entrepreneur dream. |
Strong Demand & Relatively Recession Proof |
The demand for bookkeeping service is increasing year over year and the business is known to be relatively recession proof. |
You establish yourself as an expert |
With starting a bookkeeping service, you establish yourself as an expert in your niche, which builds your credibility. In return, customers are more likely to trust you and refer you to other friends and family. |
Can build solid foundation of clients |
It's unlikely you will have one-off customers as a bookkeeping service. Typically, you have a solid foundation of clients that use your product and services regularly. |
Cons Of A Bookkeeping Service
Cons | Description |
---|---|
Motivation of employees |
If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees. |
Longer Sales Process |
A bookkeeping service can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers. |
Security Issues |
With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road. |
Low margins |
The gross margins for your bookkeeping service are typically around 18%, which can make it more challenging to incur new expenses and maintain profitability. |
High employee turnover |
In the bookkeeping service, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
Taxes |
As a bookkeeping service, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it. |
High overhead expenses |
With starting a bookkeeping service, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below. |
Time commitment |
With starting a bookkeeping service, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business. |
Difficult to build trust with your customer |
With starting a bookkeeping service, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business. |
Complex maintenance |
Your bookkeeping service will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times. |
Impatient customers |
You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service. |
Difficult to scale |
With a bookkeeping service, it can be challenging to find ways to scale. Check out this article that discusses scaling your business and the challenges that come with it. |
Learning Curve |
When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you. |
Equipment Breakdowns |
Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible. |
Technical issues can be frustrating |
Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration. |
More challenging to earn passive income |
It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day. |
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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