Transition from Professional to Business Owner

“I having been working for my current employer (in a bank) for 5 years as an accountant.  I feel that I am now ready to start my own business. I have put some money aside and would like to start an accounting firm working with SME’s. Before I take the plunge and resign, are there any bumps on the road so to speak I should be aware of?  As much as I am good at what I do, I think running a business may be something different than what I expect.  Please advise”.  John*

I got this email a few days ago and I believe it is a scenario very many people can relate to.  Many of us start business or think of starting business based on our current profession.  John is spot on when he says running a business may be a different ball game.  Working as an accountant is not the same as running an accounting business. Many people however make the mistake of thinking that just because you are good or have a skill in a particular area, you can start or manage a business in that area.  Think of it this way – not all doctors are cut out to run hospitals.  I think the attitude and skill set of running a hospital is different than that of being a doctor.  I have personally experienced this.  I used to work in the stock broking industry at one point and the business I set up then was a stock broking agency. I did not think it would be different so I had to learn a lot in the process. I have phrased these key lessons as responses to John’s question but they are applicable to anyone thinking of turning their “profession” into a “business”.

1. When you are working as an accountant, you go to work and only focus on the job at hand i.e. accounting. Your mind is not occupied with anything else other than the job of accounting.  No one is going to ask you to make tea or collect stationery.  Being an accountant in a bank you never had to really worry about what the sales team were doing.  You were never the one responsible for bringing in business. What you first and foremost need to be aware about as you start the accounting business is that you are not just an accountant.  That becomes a service you are selling not just a job you are doing.  You are in the business of selling accounting services not just accounting.  You will be required to grow this business i.e. spend a lot of your time especially in the initial stages sourcing for clients.  It is great that you like accounting, but you must like or learn to like marketing, business development, networking etc. Work will not come to you simply because you are an accountant.  You have to be proactively growing your client base, something you are not required to do in your job as an accountant. Especially in the beginning when financial resources are lean, you could also be the messenger, receptionist, filing clerk etc.  Accounting will be just one of the many hats you wear.
2. Related to the above point, do not try to create an environment similar to where you worked.  In thinking back, I tried to actually replicate my previous working environment in a business that I owned. Instead of letting the real growth of the business dictate the resources (staff, office) I put in place, I went ahead and spent money hoping that the business will catch up to those resources.  Many have fallen into the same trap I did. Sometimes people have admitted to me that they wanted to portray the right image i.e. that the business is doing well from the get go. Ask yourself at this point do you really need a full time office?  Do you need staff?  If you do need to employ someone, is his or her role at this point directly related to the growth of the business?  Alternatively, will they free up your time so you can spend more time growing the business?  Don’t spend your finances on areas that you cannot equate with true measurable value. In my business then, I found that the intern I hired who could handle administrative duties (hence free up my time) and was able to establish relationships with the clients I brought in was more valuable to the business, then the technical investment analyst who wrote fantastic research reports.  Hiring that investment analyst was simply me trying to create the same environment as my previous job. Understand that what was working for the big bank will not work for your accounting business.  You have to evaluate your situation with very modest eyes.
3. The networks you have at the bank are not the same ones you will carry into your business. I thought I would carry clients over with me since they seemed to like me so much or so I thought.  So I went into business with a false sense of confidence.  However I learnt the painful lesson that the clients were relating to me because of the organisation I worked for.  So when I left and no longer had that affiliation, they were not interested in me.  I don’t blame them.  The organisation I worked for was tried and tested.  My business was not.  You may know some people that will try you out but be prepared to rebuild your profile and your networks. You may also find that the people you knew at the bank are just not your target market after all.

These are just a few of the many lessons you will learn as you transition from a profession into a business. It’s like putting on 3D glasses. The way you see things and your attitude has to be completely different.  You must learn to think not as a professional but as business owner. It doesn’t happen overnight but my advice is that before you leave employment get your first client.  The process of finding them, being able to convince them to use you and doing an assignment for them start to finish will teach you a lot more and start giving you a better sense of what to expect.

Waceke runs a program on personal financial management. Find her at waceke@centonomy.com|

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