Buying an accounting franchise is one of the options available if you’re looking to start your own accounting business. The other primary option is blazing a trail with your own startup accounting firm. Choosing to pursue either one of these entrepreneurial paths requires a major financial investment and is likely to determine the nature of your career in accounting for at least several years. Careful consideration of the relative advantages and disadvantages of each option can easily reveal which one suits you best, both as a professional accountant and as an individual.
Becoming an Accounting Entrepreneur
Starting your own accounting practice means shifting your role from just providing accounting services to taking on the responsibilities of owning and operating a business. Those responsibilities include things such as managing the budgeting, pricing, and marketing for your firm, along with handling various day-to-day operational tasks of small business owners, such as payroll and staffing.
The Franchise Advantage
Buying a franchise gives you the advantage of instant name recognition since you’re operating your business under an already-established brand name. Also, franchise opportunities offer a turnkey system for operating the business and usually the ability to share advertising expenses with the franchise company. Being able to plug right into a proven business model increases the likelihood of your accounting business being successful.
Disadvantages of Franchising
A major disadvantage of franchising is not having the freedom to create your own brand identity by designing the exact kind of accounting practice you want. You can only sell the franchise’s products and services, and at the prices the franchise sets. You have to get pre-approval on advertising campaigns. The typical franchise agreement contains pages of rules and regulations you have to abide by.
Another disadvantage is finance-related. Buying a franchise may save you money on up front costs of starting your business, but the restrictive nature of a franchise usually limits your maximum income, and ongoing franchise fees decrease your profits. If you have a specific vision of the accounting firm you want to build, or if you’re someone who highly values having the freedom to operate the way you want, you’ll probably be happier going the route of an independent startup. Just understand that growing your own business from the ground up takes longer, is a riskier investment, and requires you to create your own business structure and operating procedures.
Accounting Franchise Opportunities in Canada
There are a number of accounting franchise businesses available in Canada for you to choose from, ranging from franchises that just provide individual tax preparation services, such as Liberty Tax Service and Tax Planning Centre Ltd., to full service business accounting firms such as Padgett Business Services. Franchises like Padgett are more appropriate if you want to offer services such as tax planning, financial management, credit card processing, payroll, and other traditional accounting services for business clients.
On the low investment end is Tax Planning Center Ltd., which, as of 2017, charges only a $3,000 annual franchise fee. In contrast, the initial franchise fee for Padgett Business Services is, as of 2017, $25,000, followed by a 9 percent annual royalty fee. The total investment required to get your Padgett franchise up and running is estimated at $50,000 to $100,000.
Before selecting a franchise, check out what training in operating the business is provided. Some franchises don’t offer any training, while the franchise fee for others includes several weeks of startup training and ongoing courses.
Buying an accounting franchise may be just the right start for you as an accounting entrepreneur. But before investing in a franchise, think about whether a franchise business is really the type of business you want, or if you’re better suited to building your own individual accounting firm from the ground up. You might consider the additional option of buying an existing accounting practice in Canada.