No one knows exactly how many tax preparers and CPAs are solo practitioners, but anecdotal evidence is that the number may be staggeringly high – as much as 40 percent of these industries. The 2014 Tax Software survey found that 21 percent of respondents had solo practices. In addition, among those who work for larger organizations, nearly one-third telework, performing the majority of their work from home, versus 34 percent who work in cubicles and 28 percent in a private office.
Either way, working from home (or from another alternative site) offers both substantial benefits and significant potential dangers.
The major benefit is the level of costs savings available. Even discounting the savings from not having a formal office (no lease, utilities, parking fees, and related expenses), there are savings in commuting costs, office attire, dry cleaning, lunches out and even the cost of coffee that can mean extra discretionary income each month. There are also professional benefits – the ability to pursue work that you love, to work only for the clients you choose, and the sense of entrepreneurial freedom.
Balancing these advantages are the dangers. Topping this list is the fact that distractions are many and quite seductive. It is far easier to interact with friends and family, or engage in social media, than to perform work. Timekeeping, accounting and billing are time-consuming, and salaries may be lower than in similar corporate positions. Isolation and lack of human interaction can be problematic. Finally, there is often a stigma attached to solo practices that may limit the ability to advance in the profession.
In terms of the practice, solo practitioners do not have the resources to pursue large clients, and primarily serve the Small-to-Middle Enterprise market. Fortunately, this is the largest group of prospective clients and a client base that may be more interesting and challenging. In terms of the top concerns of solo practitioners, the 2015 “CPA Firm Top Issues Survey” conducted by the American Institute of CPAs via its Private Company Practice Section (PCPS) shows that the concerns differ little from those of larger firms, including:
- Keeping up with changes and complexity of tax laws
- Seasonality and compression of workload
- The effect on firms caused by new Federal and State regulations
- Succession planning
- Bringing in new clients
If there is any major difference, it is that solo practitioners give greater important to the issue of succession planning, particularly as the “boomer” generation prepares for retirement.
For all of the dangers and challenges, a solo practice is highly appealing to and lucrative, though it requires some adjustments in work style. Based on interviews with successful solo practitioners, here are 10 strategies for your own success:
- Create a space. A home office is nonetheless an office. Create a separate area or room as the office, and arrange it for productivity. Make sure the office has ergonomic furniture, appropriate lighting, and a large enough work area or desk. File storage is also a consideration, in addition to all of the standard concerns of leased office space – insurance, security, a disaster recovery plan, and backups.
- Set office hours. Some professionals are able to manage the distractions of the home office with ease, but most find it more useful to establish regular office hours. Your personal circadian rhythms will play a role here – if your most productive hours are first thing in the morning, your work day should begin early. That is, after all, a major benefit of working from home. Make sure that your hours overlap with standard 9 – 5 work days so you can contact clients and peers on their schedule.
- Schedule family and household chores. Just as dangerous as letting home life distract you from work, it is easy to let the office overwhelm you if you never “leave.” Schedule time with your family, pets, neighbors and others to keep balance in your life.
- Make use of technology. In addition to a desktop PC and a laptop, essential equipment will include a good workgroup scanner, a digital signature pad, a smartphone, a quality laser printer, and either a large monitor or multiple monitors. Make sure to install a video-conferencing application and office suite as well as tax preparation and accounting software.
- Get out of the office. Contact with clients and peers is critical to success of any size firm. Of greater interest, the major reason cited by companies for changing accounting or tax firms is their perception of poor customer service. Get out of the office, have lunch, attend networking meetings, and use any other excuse to get out of the office while still working in the best interests of clients and the firm.
- Limit social media use. Social media is a critical part of marketing for the solo firm, but can also be an enormous time-waster. Set aside time to read, post and blog each day, but be careful not to mix social media time with client time.
- Outsource specialty jobs. The definition of a solo firm is that it has only one tax or accounting professional – not that there are no other members of the firm. That is, if space permits an administrative assistant is an essential staff addition. Other support specialist you will need may include a book-keeper, tech support person, and a researcher. These services are more economical if outsourced for use as needed.
- Partner with larger accounting firms. There are two levels of partnerships that should be explored. The first is an agreement to use the conference room of a large firm to conduct client or business meetings in return for a small fee or services rendered. This also provides the larger firm with a resource to handle some accounting tasks. It is also a place they may refer clients to if they are too small or have only low-level needs. The second partnership is more extensive, building on a mutual referral system with some level of fee sharing.
- Make use of the Cloud. Cloud computing is essential for the solo firm, providing access to files, software, secure client portals, backups and archiving. No client data is stored in the home office, is at lower risk of theft or damage, and will enable the firm to work from anywhere at any time.
Solo and work-at-home practices are becoming a substantial if not prevalent part of the tax and accounting professions, offering superior life-work balance and flexibility desired by the current generation of practitioners. It is a work style that offers substantial benefits, with potential disadvantages that can be managed through planning, commitment and self-discipline.