How to Use a Business Loan to Grow Your Accounting Firm
As you likely know, to grow your business, you’ll need additional working capital. Due to this, many accounting business owners pursue a small business loan in order to expand. Having a business loan can help you take on bigger projects with larger potential returns than you could reach without the extra funds. To determine how you should utilize an accounting business loan, consider these investments:
5 Ways to Use Your Accounting Business Loan
If your business’s accounting software needs to be updated, now is the perfect time to do it. You’ll have time to familiarize yourself with the new software and convert your client files from the old system to the new.
Using your business loan, you could invest in cloud-based software, or upgrade to an enterprise-focused accounting product. In addition, there are many financial technology products which focus less on reporting and more on strategic needs, such as real-time key performance indicators (KPIs) and usability for non-accounting personnel.
Tax time is traditionally the busiest time of year for accounting firms, but there are many businesses who need year-round accounting services. It may be a good idea to devise a marketing plan which focuses on clients who need non-income-tax services. Using your loan, you can pay for paid social media posts, updated signage, direct mail campaigns, and other marketing efforts that will attract new customers.
3. Training and Specialization
There have been many tax law changes lately. Due to this, it may be worth your time and money to pay for training courses that will teach you and your staff about these modifications.
In addition, as you likely know, accounting firms can charge higher rates when they specialize. There are many incremental certifications in different accounting fields which will allow you to charge a higher rate. In fact, The 2018 Institute of Management Accountants released a 2018 study showing that accounting professionals who have a Certified Managerial Accountant (CMA) credential, or Certified Public Accountant (CPA) credential make an average of 40 to 60 percent more income than those without either credential.
If you’re interested in specializing, check out The American Institute of CPAs lists several broad categories of specialization. You can also specialize in serving specific business niches, such as restaurants, franchises, or manufacturing companies. If you choose to expand your skill set to cover an underserved niche, you could use your loan to pay for training in that niche.
Having more employees means that you’ll be able to serve more customers. Therefore, you should consider using your loan to hire and train new staff before your busy season starts again. It’s also important to note that there are many seasonal tax workers who may accept a lower hourly rate for a full-time role instead of a seasonal role.
5. Location or Facilities
If you’re currently be crammed into a small location, you could move to a larger space, or open an office in another city that is popular for your target niche. You might also consider converting from leasing to owning your own commercial property.
Now that your busy season has ended, it’s a great time to invest in growing your accounting firm. A business loan can enable you to invest in some larger projects with a larger return than you could afford otherwise. Now that you’ve learned about how you can best utilize your accounting business loan, it’s time to select the investments that are best for your particular company. Every accounting business is different, so it’s crucial that you determine areas of your business that need improving. Good luck!
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