Nearly 25 years later, his only regret is wishing he’d done it sooner. “I spent two and half years thinking about it and 18 months to complete the deal. I had time to plan how I was going to do it. Buying-in was a good option as we walked straight into an established business that had a reasonable portfolio of clients, a theoretical turnover of £125,000 and, crucially, stacks of work in arrears, which gave us an income of £250,000 in our first year. It also kept us comfortable in year two, while we became established and won some quality business through word of mouth recommendations. We didn’t do any marketing.”
Redressing the imbalance between work and home was also the driver for sisters Carly and Ellie Allchurch, who left PwC to set up Swansea-based Allchurch & Co in February. “I was on maternity leave and decided that the best way to reconcile my career ambitions with being a mum was to be my own boss,” says Carly. “Luckily Ellie was also looking for a new direction.”
The sisters didn’t spend long over-thinking their decision. “Accountants are very well placed to go it alone,” says Carly. “We’ve spent years helping other people start businesses. It’s just a question of finding the confidence to jump and being ready.”
They had intended to work from home, but an opportunity to take on premises came as they were starting. “The rent was so reasonable that we decided to take it – it helps keep work and home separate, and it’s good from a client perspective too,” says Carly.
Their biggest investment has been in IT, which they funded with savings (now fully replenished) and a start-up grant from their local council, which they put towards software. Other than that, they are keeping costs down by maximising free PR: some of the local newspapers have run news stories on them, and they’ve both written for a local magazine to raise their profile.
The Allchurches have also been grateful for free support: “We had invaluable advice from our peers, from staff at ICAEW and from our mentor, an old friend and colleague, who told us when and how to apply for our practicing certificate and explained the other procedures we had to follow before we could practice. ICAEW’s website is also very useful.”Peter Hollis left Haines Watts to set up Hollis & Co in Sheffield in 1990. “I’d reached the stage where I was more scared of not trying than of failing. Once I’d decided that I’d be no worse off – if it didn’t work out, I could always go back to working for a big firm – there was no stopping me.”
Hollis left because he wanted to see his children grow up, and because he wanted the privilege of being able to say no. He met his set-up costs with savings and a modest overdraft. “This was pre-internet, so my costs were minimal – no broadband, no software, just a computer, a phoneline, stationery and some second-hand furniture. My first month’s pay cheque came out of my savings: after that, I was more or less self-sufficient and didn’t touch the overdraft after month four.”
Initially, Hollis’s one and only client gave him a rent-free office for nine months. “I stayed for six years, occupying more of their spare space until there was no more vacant room to rent,” he says. “Part of the delay in moving was finding something suitable to buy. I didn’t want to lease – you can always sell a building, but getting out of a lease should you need to is expensive.”
Keys to successThe bandwagon effect is key to building a successful business. Self- employed people are supportive of others who have had the courage to do the same and will try to help when they can, either by becoming clients or by recommending you.
Always pay your suppliers promptly, not only because it’s disrespectful not to, but also because you’ll reap good service when you need it. And by the same token, don’t chop and change suppliers. Build good relationships and nurture loyalty.
Invest in the best technology and in the best people. And reward them as well as you possibly can.
There’s no need to do things that are outside your competence. There is more than enough work to do in the traditional areas of accountancy – tax, payroll, business advice – without trying to become an expert in new areas. Only diversify if there is a realistic chance of turning this new area into a profitable revenue stream.
Work out of one office – it’s thebest way to build a strong team and to make everyone feel part of the same business.
Five live tips
- Don’t leave it too long. If you know you want your own firm, go for it as soon as finances, circumstances and knowledge allow.
- Have principles and stick to them. Decide who you are, what you represent, what you stand for and don’t be led astray. If you have clients who want you to do things that don’t fit in with your values, don’t take on their business.
- Don’t forget your own personal development. This is all arranged for you when you are in a practice but can easily slip when you go it alone. Keep going on courses and stay up to date with everything.
- Remember why you’re doing this – if it’s to improve your life or spend more time with your family and you find yourself working all hours, stop.
- Your reputation is everything. If you make a mistake – and you’ll need to accept that you will – own up immediately, apologise immediately and fix it immediately.