Many of us have thought at one point or another of starting our own business. But it can be hard to decide what type of business to start, especially if you don’t have extensive savings.
A great solution is to start a business in bookkeeping, accounting, or tax services. Bookkeeping, accounting, and tax services are the best businesses to get into with little or no money. Plus, every business needs to handle its money, which requires a particular skill set. Often, they choose to outsource this part of the business. That’s where you can come in.
Read on to find out more about the differences between tax, accounting, and bookkeeping businesses and how to start your own financial company with very few overhead costs.
What Is Bookkeeping?
It’s easy to confuse bookkeeping and accounting since they overlap in several areas. But, they are two distinct professions. Each has its own set of challenges, benefits, and necessary qualifications. Let’s take a look at bookkeeping first.
A bookkeeper’s main job is to record and organize financial data for a business or individual. They are responsible for keeping a detailed record of a business’s transactions. Every business needs an accurate financial record. It’s important if they want to be successful and avoid legal troubles.
A few examples of a bookkeeper’s duties include:
- Overseeing payroll procedures
- Overseeing invoices
- Overseeing accounts payable and accounts receivable
- Completing transactions, payments, and receipts
- Contacting customers for timely payments
- Recording business costs and expenditures
How Do I Become a Bookkeeper?
You don’t need a college degree to become a bookkeeper. In fact, bookkeeping is one of the most highly paid professions that doesn’t need higher education. There are associate’s and bachelor’s programs that can help you become a bookkeeper. If you want a company to hire you as a bookkeeper, they will prefer that you have at least some college experience.
To be a successful bookkeeper, you’ll also need a few specific qualities. It would be best if you had a good understanding of numbers and math. You’ll need to pay attention to detail and organization. Bookkeepers also need a lot of integrity since they manage financials for businesses.
If you want to start your own bookkeeping business, many online courses and resources, such as Ledgers can help you.
What Is Accounting?
Accounting is a lot like bookkeeping. The big difference is that bookkeepers record finances, while accountants use those records to make reports. Bookkeepers mainly have administrative duties. Accountants analyze the data that bookkeepers collect and give businesses advice accordingly.
Accounting is a wide field with many different areas. But, the general duties of an accountant can include:
- Creating financial statements and reports
- Preparing income tax returns
- Verifying financial records
- Analyzing financial data and providing financial advice according to that data
- Adjusting entries
- Researching and presenting financial trends and forecasts for business growth
How Do I Become an Accountant?
Accounting requires training and certifications beyond those necessary for bookkeeping. If you want to start an accounting business, you’ll want to get an accounting degree. Luckily, there are hundreds of accredited accounting programs in the country.
Many accountants earn further certifications depending on their specialty. For instance, you can become a certified public accountant (CPA) by completing extra tests and education.
What Are Tax Services?
Taxes are among the few certainties in life, so starting a tax service business can be extremely lucrative. Certain types of accounting deal specifically in taxes. They are essential and profitable pursuits.
Duties of a tax accountant can include:
- Preparing tax returns for businesses and individuals
- Keeping clients updated and informed on tax laws
- Arranging audits with tax authorities
- Determine tax strategies to cut client payments
- Give clients advice on best financial practices to cut tax payments
How Do I Become a Tax Accountant?
If you’re interested in starting a tax business, it’s a good idea to get a bachelor’s degree in accounting and then to become a CPA through more training. Tax companies like ATAX and Ledgers can help you on your journey.
Why Bookkeeping, Accounting, & Taxes Are Good Businesses To Start With Little Money
Now we’ve gone over what you need to become a bookkeeper, accountant, or tax expert. Let’s look at some specific reasons why these are great businesses to start with little or no money.
High Demand
Financial services are one of the only industries that will always have a viable market. It doesn’t matter what the economy looks like. People always need financial experts to help organize and plan their money and taxes. It takes a specific skill set, including math, attention to detail, organization, and tax code knowledge. Many people are more than happy to outsource.
Low Overhead Costs
In general, service-based businesses have very low initial costs. Bookkeeping, accounting, and tax services are no exception. You won’t need to buy retail products or even a physical office space since you can work entirely from home if you want. You’ll need to invest in advertising and any education or training you need to complete.
Large Customer Base
There’s always a high demand for financial services like bookkeeping, accounting, and taxes. Working in today’s digital era expands this even more. You can complete virtual financial work for clients all over the world. If you market yourself digitally, you won’t limit your customer base to your local area.
Conclusion
Bookkeeping, accounting, and tax services are excellent businesses to get into with little to no money. This is due to constant high demand, a large available customer base, and low overhead costs. Depending on the specialty you choose, you may need to invest in some training or education. But, the payoff is well worth it.
Do you want more information on how to start your own business? Check out our article on entrepreneurship here.