How to start a CPA firm in Canada?
In case the benefits aren’t obvious to you, let’s take a quick look at why you might want to start your own CPA firm, before we get into how to actually do it.
Starting a business is one of the greatest challenges you can undertake, professionally. But for every difficulty you face, there are equally weighted rewards. If you set out to start your own CPA firm, you will develop yourself as a professional in ways that no education or training can provide.
Sourced from http://www.journalofaccountancy.com/issues/2006/apr/startyourownpractice.html
When you work for yourself, you’re afforded a great deal of freedom that you can never have at a normal 9 to 5. We’re not just talking about freedom over your own schedule — though that is nice, too — but rather your freedom to choose the projects, niches, and sectors that you want to work in. You have the final say over what work you will be doing, and you can direct your company into the fields and industries that you are most passionate about. You can also seek out the sectors that pay the best.
Most importantly, as a business owner you are no longer confined to fixed salaries, bonuses, and raises. While this means you could find yourself completely broke, there is also no limit to how much you can make. Set yourself up right, and within a short amount of time you could be drinking margaritas on the beach while your own CPA firm generates you money from afar.
Fulfill legal and regulatory requirements to start a CPA firm
Obviously, to start a CPA firm you must already be a Canadian Chartered Professional Accountant (CPA). It is required that you have a Public Accounting License in order to operate a public accounting business in Canada:
Photo sourced from http://www.cpaontario.ca/FirmsATOs/Registrations/1008page1328.aspx
And to obtain a public accounting license you must already be a CPA in good standing. So go to school, fulfill your work requirements, pass your exams, and get your CPA designation.
In order to get your Public Accounting License, you will need to apply and provide proof of a few educational and experiential requirements in addition to having your CPA designation. These include, but aren’t limited to:
Sourced from http://www.cpaontario.ca/Member/PublicAccounting/PublicAccountingLicensing/ApplnForLicenceReq/1008page4820.aspx
It’s important to note that just obtaining your Public Accounting License does not, in itself, allow you to operate an accounting firm. You must also register with the CPA as a Public Accounting Practice (and name your company), obtain a certificate of authorization, and enlist professional liability insurance.
To register as a Public Accounting Practice, you’ll need to apply by filling out a number of registration forms provided by CPA Canada. These forms are to ensure that your organization meets all of the requirements and specifications of the Public Accounting Act, 2004. Upon registering as a Professional Corporation, you will receive a certificate of registration. Because of the legal specifications and technicalities of this process, you may want to consult legal representation.
Your last step in registering your organization is to obtain a certificate of authorization. The certificate of authorization is the final step that will allow you to practice as a Canadian accounting body, and it ensures that you are above board with all legal requirements. Before filing the application for your certificate of authorization, however, you will need to have mandatory professional liability insurance.
Protecting your organization with liability insurance
Starting a business always comes with associated risks. As the founder, owner, and/or operator of any organization, these risks come down on you if anything goes awry. It’s a troubling prospect, but this is also why accounting firms are legally required to hold professional liability insurance. Under the required levels of insurance coverage, there is little risk involved.
Sourced from http://www.cpaontario.ca/FirmsATOs/Registrations/LiabilityInsurance/1008page1106.aspx
Your first clients are the most important
Once you’ve fulfilled your backend and regulatory requirements (the boring stuff), it’s time to actually get to work! First of, you’ll need to find some clients.
With any fledgling business, finding your first few clients is the most difficult. Most business comes from referrals and repeat clients, so once you secure your first few, you’re in the clear. And yet, these clients are the most important to the success and future of your business. Your earliest contracts will be the ones that force you to shape your processes, communications, and service offerings. It’s through these first interactions that you will develop your business structure and put in place the systems to make your business dream a reality. So, how do you do it?
First and foremost, have as much structure and organization in place before acquire your first clients. All contract templates, corporate branding, and communication systems should be in place. When you sit down for that first engagement meeting, you want to look like you know what you’re doing, right?
Word of mouth is the old, tried-and-true method of garnering clients and customers, in any industry. Particularly when you’re just starting out, use every professional and resource available to you to get the word out that you’re in business. If you have a specialization or area of focus, make that clear. If you have a budget for advertising, use it. And, of course, you need to get social.
Sourced from https://www.firmofthefuture.com/content/cpa-firm-marketing-accountant-digital-marketing-trends-2016/
Social media isn’t going away, and it’s the perfect platform to target your marketing directly toward the people you want to work with. Leverage LinkedIn and Twitter to target professionals in the niches you focus on, and use Facebook to build and maintain relationships with potential clients. These platforms will keep you in the backs of potential clients’ minds.
Hiring with a focus on growth
You’ll (hopefully) find yourself at the point of needing to hire employees. This is the most important step in ensuring the longevity and growth of your business. You want employees who work hard and are going to consider the needs of the firm. Basically, you want to hire people who will grow with the firm.
Sourced from https://www.firmofthefuture.com/content/develop-talent-invest-in-your-future/
By seeking out a staff that is willing to learn and develop, you are investing in the future of the business. Hiring people with less experience but an entrepreneurial mindset and driven attitude will save you salary costs and help you build the best team possible.
Making the most money (being efficient)
The ideal, in starting your own CPA firm, is to build a business rather than just making a job for yourself. If you’ve built a business, you’re able to step back and let the firm run, without investing too much of your time. Building yourself a job is nice, but making an organization that is streamlined, efficient, and self-sustaining will allow you to collect passive income and have the most freedom possible.
Give careful attention to all of your systems, communication, and first hires. While building your firm, always have an eye to the future of your operation and whether or not processes can be automated or eliminated altogether. Most importantly, enjoy the process, because building a business can be fun!