Every business needs accounting processes to be successful. Some entrepreneurs find it difficult to put their books in order and some cannot afford to employ an accountant on a full times basis. As a result, there is a huge opportunity for individuals with accounting skills. Accounting business involves keeping records of income and expenditures, taxes, and other financial obligations as may be required by an organisation.
Are you considering starting an accounting firm in Nigeria? This article will expose you to how you can start your own accounting business.
What Is Accounting?
Accounting is the process of recording, classifying, analysing, summarising, and interpreting the financial statement of an organisation. Therefore, accounting business involves helping business owners understand the state of their finances, keeping proper record of their trade, profit and loss account, preparation and completion of tax returns, proposing solutions to business financial roadblocks and many more.
Accountants drive business decisions through the accurate, orderly management of finances and cash flow.
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Skills Needed To Run An Accounting Business?
Aside from holding an accounting degree from a higher institute of learning and having a natural fluency in the language of numbers, here are other important skills that will help you lay a good foundation for a successful accounting business.
- Extreme organising skill: Accountants often maintain the neatest desks since they deal with numbers and lots of paperwork that cannot be misplaced
- Good analytical skill: You must be great at reconciling data and numbers.
- Sharp eye for detail: A misplaced decimal point can wreak havoc in a financial report.
- Structured work style: Accounting business requires diligence, consistency, and professionalism.
- Aptitude for Technology: There are many accounting and spreadsheet software an accounting firm must be familiar with to be successful.
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What Are The Costs Involved In Starting An Accounting Business?
Actually, starting an accounting firm does not cost much. The basic requirement is having a sound accounting knowledge. Typically, here are the major costs you’ll incur as a startup in this business:
- Office Space
- Accounting software
- Computer systems
- Registration and license fee
Institute Of Chartered Accountants Of Nigeria (ICAN)
To be recognised as a professional accountant in Nigeria, it is imperative to get certified with ICAN, the recognised body for professional accountants in Nigeria. The interesting thing about getting certified with ICAN is that it gives you global recognition. Also, if you don’t have a university degree in Accounting, you can become a chartered accountant by just writing ICAN examinations.
When you successfully complete the examination, you will qualify as Associate Chartered Accountant (ACA). A member of ICAN is not allowed to set up a public practice as an accountant until he/she has applied for, and has been granted a license to practice by the council.
The license to practice will be issued only to those members who have been trained in professional offices and have acquired the minimum practical training: 36 months for those with accounting qualifications, while those with non-accounting qualifications require not less than 42 months.
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Who Are The Target Market Of An Accounting Business
Your target markets are large businesses and corporations with myriad sources of income. Small business owners tend to handle their accounting obligations themselves using the available accounting software.
How Profitable Is Accounting Business?
The profitability depends on several factors such as the size of the business you are working with, the scope of the work you are doing for them, the region in which you are located, and several other factors.
Regardless, if you secure a high profile business with high revenue, you can charge hourly and this can be thousands of naira. Actually, a single accounting job can land you six figures. So, profitability and pricing are at your discretion and will depend on how professional you are.
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Steps Involved In Starting An Accounting Business
Step One – Select An Accounting Niche
When considering accounting business, you must pick a niche you’ll like to operate in. Here are some of the niches you can venture into:
Auditing business involves examining a business’s financial records to verify they are accurate. It is done through a systematic review of their transactions.
Actually, many businesses have routine audits annually and even if a company have an internal auditor, they still hire the service of an external auditor. ICAN license is a requirement if you want to run an audit firm in Nigeria.
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2. Pure Accounting
This specialises in helping small, medium, and large businesses with cost-effective solutions to their accounting, bookkeeping and other financial needs.
Accounting consultants play a crucial role in helping businesses enhance performance and comply with changing regulations. Additionally, they help businesses analyse their accounting processes, identify the best accounting process that suits their business type, identify financial issues, and proffer workable solutions to them. Unlike auditing, you don’t need an ICAN license to run an accounting consulting business.
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4. Forensic Accounting
This is quite different and many people involved in the business are specially trained for it. Basically, forensic accounting is a mix of accounting and investigative techniques used to discover financial crimes. Also, forensic accountants explain the nature of the financial crime to the courts.
See Also: Forms Of Corporate Crime And It’s Consequences
Here is another accounting business to explore. There are several accounting platforms offering accounting training to people. You can open a social media account for the purpose of training people in financial education.
There are several people out there who do not understand how to go about their finances both personally and as a business. Hence, you can offer to train them on topics such as savings, investment, and how to use accounting software (MS Excel, Peachtree, Quickbooks, Sage Intacct, Xero, Desktop Pro, etc).
In addition to that, you can start a tutorial center for students who want to write ICAN, ACCA, and other accounting-related professional exams.
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Step Two – Register Your Business With CAC
Corporate Affairs Commission (CAC) is the recognised body responsible for business registration in Nigeria. Without mincing words, customers see registered businesses as credible and trustworthy.
Therefore, you’ll stand a better chance of gaining the trust of your customers if your business is registered. Besides, you cannot open a corporate account without your business registration certificate. The good news is that business registration in Nigeria is simple and seamless if you know how to go about it.
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First, you need to run a name search availability to ensure that your preferred name has not been registered by someone else. If the name is available on CAC’s portal, the next thing to do is to reserve the name.
Afterward, you can begin the registration process properly. Please note that many businesses get stuck when registering themselves. So, it’s advisable to hire the service of an expert to help you with your registration. One of the experienced firms you can trust in Nigeria is ReDahlia.
ReDahlia is located at 43B, Emina Crescent Off Toyin Street, Ikeja, Lagos. Actually, you don’t need to reside in Lagos to use ReDahlia’s service. You can send your information via email to them, make payment and your certificate would be delivered to your preferred location once it’s ready. Yes, it’s that simple.
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Step Three – Differentiate Your Business Among Competitors
After selecting the perfect niche for yourself, setting yourself apart is very important. When starting any business, you need to be able to answer this question in the affirmative: Why would my target audience do business with me instead of my competitors?
Usually, most entrepreneurs fail because of their refusal to give deep thought to this question. Before answering this question, research the competition in the accounting market and find the underserved spot where you can fit in. Since you are involved in a service business, your customer service and professionalism must be top-notch.
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Step Four – Draft A Business Plan
This step cannot be overemphasized. You need to properly plan your business for success. Remember, he who fails to plan, plan to fail. Contrary to the belief of many startups, a business plan is not difficult to draft. All you need is to ensure that both your long and short term business goals are penned down. You can begin writing them one day at a time.
Basically, here are the information that should be found in your business plan:
- An overview of your accounting business
- Executive summary
- General company description
- SWOT analysis
- Market research
- Your strategy
- The team
- A marketing plan
- An operational plan
- Financial projection
- An appendix
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Step Five – Secure Funding
Find out how much money is required to get started depending on the type of accounting business you choose. Project for more money to ensure your business doesn’t run out of cash before revenue starts coming in.
Peradventure you cannot cover this amount yourself, then you need to think about getting outside financing for your business. Actually, there are several options business owners can consider when looking for outside funds.
The first attempt is usually to approach family and friends. Thereafter, you can turn to angel investors, traditional bank loans, and venture capitalists. Another great funding option is crowdfunding. Register with different crowdfunding sites and take your chance. You can never tell if that’s where your capital will come from.
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Step Six – Market Your Accounting Business
Before you get excited about your new business, let me tell you the most important aspect of running a business: MARKETING. As simple as it sounds, marketing demands real hard work. If you get your marketing right, you are on your way to enjoying high business revenue.
You must understand that even marketing agencies get marketing wrong sometimes. What you need to do is carefully test different approaches with small amounts of money. And when you discover the one that works best for you, pump in more money into that channel.
Here’s a simple way to reach your target audience:
- Find your selling point
- Prepare your sales material
- Search for prospects
- Reach out to them
- Follow up
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The niche you select will inform the marketing channel that’ll best work for you. Here are some of the commonly used marketing strategy that produces result:
- Social media
- Google Ad
- Partnership and collaboration
- Word of mouth
- Offering freebies
- Influencer marketing
In conclusion, accounting business is a noble business that provides tremendous help to small, medium, or large enterprises. Needless to say, the business is accompanied by great financial rewards.
In summary, here are the six steps to running a successful accounting business:
- Select an accounting niche
- Register your business with CAC
- Differentiate your business among competitors
- Draft A Business plan
- Secure funding
- Market your accounting business
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There you have it. We wish you all the best
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2 thoughts on “How To Start Accounting Business In Nigeria”
Thank you for sharing this article. I have a goal of operating an Accounting Firm, this will help me in the future. I wish you and myself all the best in our life endeavour.
Thank you for reading and it’s good you’re thinking of starting your accounting firm someday.
Interestingly, we have compiled a comprehensive guide that will help you start the accounting business and 34 other profitable businesses in Nigeria.
You can find it here:https://www.entrepreneurs.ng/35-business-ideas/.