Is Bookkeeping A Profitable Business?
You are doing your research and trying to figure out, is bookkeeping a profitable business to start? And the quick and easy answer to that is yup… so thanks for stopping by and reading my 40-word post on the subject. Actually, you may be surprised as to how profitable bookkeeping can be!
Okay, so you’re not gonna take my word for it. I suppose I can do some research and provide some proof so that you don’t have to. After all, that’s why you are here right?
Let’s Start With Google
So, what I decided to do is just go ahead and do a Google search for the term “most profitable home business”. Take a look at the screenshot below and check it out for yourself.
As you can see, bookkeeping is at the top of the list. There are a couple of reasons why. The first is that when you do things right you are able to command an excellent rate of pay. It’s entirely possible to earn around $80 an hour for your bookkeeping services. Pretty cool huh?
The other reason that a bookkeeping business is such a great idea is that there are very few expenses that you need to maintain. There is no need to rent out a physical space (you can do this right from your home). In fact, most of your expenses are for the different software programs that you will need (of course these costs are figured into your hourly rate).
Just to throw a random number out there, let’s say your monthly expenses are $250 dollars a month. Then, let’s pretend that you have 5 clients that you do bookkeeping for. If we split that cost between those 5 clients, that come down to $50 a month.
What if we have 25 clients? Here is the cool part… your expenses don’t increase since you don’t need any extra software just because you have 25 clients as opposed to 5 clients. That changes your cost per client from $50 down to $10 per month.
So not only do your expenses not increase the more clients that you get, but profit per client actually does increase! It’s actually a win-win scenario.
Bookkeeping Business Costs
The amount of money that you can charge as a top-notch bookkeeper is great and all but what kinds of expenses are you looking at to get things going? There is definitely going to be a range as far as expenses are concerned since some of the things needed you may already have. Below is a quick rundown of some of the things you will need to consider as you get started.
- Business cards – $15-$25
- Standard office supplies: $0-$75
- Website domain: $15
- Website Hosting: $5-$15 a month
- Insurance: $150-$200
- Software: $70-$165 a month
- Business License: $0-$200
- LLC: $350-$600
- Scanner: $150-$300
- Email autoresponder: $20-$40 a month
When all is said and done, you are looking at your startup costs to be in the ballpark of $800-$1800. Another thing to keep in mind is that you don’t have to have all of these different pieces from the get-go. Simply add them to your business when your business requires you to add them.
That is the nice thing about starting a bookkeeping business, you can do it on a shoestring budget. In other words, anything that you would have to buy wouldn’t be until it is absolutely essential, so you not burning money while you are waiting on gaining clients.
How Much Do Bookkeepers Make?
Now that I have touched on the expenses side of things, let’s turn our focus to your possible earnings. It’s very possible, if you do things the right way, to earn somewhere in the ballpark of $80 an hour. You are able to ask for this amount by learning how to go above and beyond as a bookkeeper.
While some businesses may not like what you are asking, the bottom line is that those won’t be the types of clients you want anyways. Obviously, there are many factors that will go into determining what to charge (size of the business for example), but as things average out, $80 an hour should be a goal to shoot for.
By marketing your bookkeeping business the right way (more on how to do this in a minute) you will be able to eliminate many cost issues a potential client may feel from the very beginning. It simply comes down to learning how to provide massive value and becoming a top-notch bookkeeper… not just a number cruncher.
Once you have an established client you can expect to spend roughly 4 hours a month doing their books. That means that each client you have can bring in around $320 a month for your new business. I took the liberty of doing some number crunching of my own to show the potential money you can earn based on the number of clients that you have.
- 2 clients – $640 a month / $7680 a year
- 3 clients – $960 a month / $11,520 a year
- 4 clients – $1,280 a month / $15,360 a year
- 5 clients – $1,600 a month / $19,200 a year
- 6 clients – $1,920 a month / $23,040 a year
- 7 clients – $2,240 a month / $26,880 a year
- 8 clients – $2,560 a month / $30, 720 a year
- 10 clients – $3,200 a month / $38,400 a year
- 15 clients – $4,800 a month / $57,600 a year
- 20 clients – $6,400 a month / $76,800 a year
- 30 clients – $9,600 a month / $115,200 a year
- 50 clients – $16,000 a month / $192,00 a year
Quick little side note – I know of one particular bookkeeper that has landed 100 clients in under 4 years and has a team of bookkeepers do the work for him. 100 clients is $32,000 a month / $384,000 a year.
Oh, and he has also added tax services to his business as well so I can only imagine what he actually earns in a year’s time. How much can you add by adding taxes to your bookkeeping business? If you were to do both personal and business taxes, you would add an additional $600- $1,100 per client per year!
Taxes take around an extra 5 hours of your time on average but remember that this is only once a year! My point here is to simply get those wheels in your head turning to see the potential.
Here is the best part. You’re probably thinking if you were to get to 50 clients how much work am I going to be putting in? Well, if you spend 4 hours a month per client that is 200 hours a month of work which comes down to working 50 hours a week to earn $192,000 a year! Not too shabby if you ask me.
Understand that this is a very cut and dry example of the potential of having your own bookkeeping business. Of course, there are a lot of other factors that will go into your business and the time that will be required to get the work done.
There is also a very good chance that you aren’t going to want to be putting in 50 hours a week either which is completely understandable. When you start approaching that 50 client mark (probably much sooner than that) you are more than likely going to be hiring bookkeepers to do the work for you but those details are for another time.
Understand that this is YOUR business. You make all the rules. If you want to do all 50 clients yourself, by all means, you are free to do so. Do you want to hire 3 other bookkeepers so that you can sit back and simply manage your business that’s your choice as well. Or, maybe you are completely content on just having 3 or 4 clients and keeping your bookkeeping business as a side hustle. The choice is yours!
Where Can You Go From Here?
The question remains, what is your best option to learn how to start a bookkeeping business? Where can you not only learn how to become a bookkeeper but also learn how to market your business and demand those premium wages?
I want you to have the best chance of success. That means that you deserve the best option to learn everything you will ever need to run a highly successful bookkeeping business of your own.
Your next step is to simply head over to my full review of this program and check things out for yourself. Put your credit card away! I am simply providing you with as much information as possible so that you can make an informed decision on whether a bookkeeping business is right for you.
The one promise that I can make is that you will know for sure if this business is something you want to pursue or not IF you do 2 things.
- read my entire review on the #1 bookkeeping course online
- Check out the 3 training videos for an in-depth breakdown of what it takes to run a bookkeeping business AFTER you read the review
Is bookkeeping a profitable business? Absolutely! Now it’s your turn to do your homework and learn more about how you can make this happen for you. Whatever you decide, I hope you found this informative, and I wish you the best in whatever path you choose.
If you have any questions, feel free to drop them below in the comments and I will be sure to get back to you as soon as possible.