Whether you've worked as a bookkeeper or not, a bookkeeping business can be a profitable venture. But if you want to be the best bookkeeper, you need to pick a niche.
That way, you can focus your time and energy on one industry and learn how to manage finances for that niche.
Keep reading to learn about some profitable bookkeeping niche ideas and why a niche is so important.
One excellent niche to consider is serving law firms. Lawyers need bookkeepers to manage their finances, and lawyers make a lot of money.
If you focus on law firms, you can help them track law firm performance and financial trends. You can also help the law firm prepare for when they file taxes, and you can prepare the taxes.
Working with a law firm can be difficult because you need to make sure the attorneys don't accidentally report personal expenses for the business. Attention to detail and organization are essential for success as a legal bookkeeper.
If you want your bookkeeping business to be financially successful, you should consider working with law firms. Specializing in legal bookkeeping can help you gain experience so that you can charge more in the future.
Like lawyers, engineers can make a lot of money. So you can charge them a lot to manage their books. You can work with engineering firms to help manage the finances, and you can do many of the same tasks as you would for any other business.
Another benefit of focusing on bookkeeping for engineering firms is that you can specialize even more. Engineering is a massive field with dozens of sub-specialties.
If you're interested in technology, you could start a bookkeeping business helping software engineering companies. Or, if you're passionate about urban design, you could work with civil engineers.
Engineers are necessary around the country. So you could live almost anywhere and still find some nearby engineers who need to hire a bookkeeper.
Real estate is another excellent niche idea for your bookkeeping business. You can work with real estate companies and individuals to manage the books.
People will always buy and sell houses, so real estate agents will always have work. So they will always need a bookkeeper.
You can make sure your real estate clients take in their commissions and track their revenue correctly. If you find problems, you can alert your client and adjust their books accordingly.
Real estate is also one of those industries that exist everywhere. No matter if you live in a major city or a small town, you can start a real estate bookkeeping business.
If you have an interest in health care, you can utilize that to start a medical bookkeeping business. It's one of the best bookkeeping niche ideas for practicality.
You can set up your business almost anywhere, and you can find at least one nearby hospital. While you may be a bit far away if you live in a rural area, there will be a hospital somewhere.
And if you're in a small town, you may be the only bookkeeper with a focus on healthcare and medicine. Because of that, you can charge a lot for your services.
You can focus on all medical services, or you can specialize in bookkeeping for certain medical specialties, like veterinarians or chiropractors.
Construction and Trades
Construction and trades are also very popular businesses, and you can find them anywhere. They're also a profitable niche for your bookkeeping business.
As with other niches, you can focus on one type of construction or trade business. You can learn all about the business model behind one industry, so you can better help your clients.
But you can also help businesses in different trades, from plumbers and electricians to cosmetologists. You can also decide if you want to work with companies or independent contractors.
Both can be profitable, so consider what you want from your work. You may want to work with a bigger company for more structure, for example.
Not-for-profit (NFP) bookkeeping is another excellent niche to consider. It can be just as profitable as for-profit bookkeeping because you can charge similar amounts.
The biggest difference between for-profit and not-for-profit organizations is who they answer to. Non-profits focus more on fulfilling their mission, while for-profit companies answer to their stockholders.
If you can convince an NFP organization they need your service, you may be able to charge a decent amount. You won't have to worry about stakeholders affecting your services to the company.
Plus, you can look for clients whose missions interest you. If you like animals, you can work with animal shelters, and if you're passionate about education, you can work with a private school.
If there isn't a particular industry you want to focus on, you can focus on your local area. You can target small businesses who need to outsource their bookkeeping, and you won't have to limit your potential client base.
Local bookkeeping can be a great niche in a small town, but you can do it in a city. You will need to find something to make yourself stand out, such as experience.
But you can focus on helping local businesses rather than large corporations. Then, you can learn all of the local finance laws so that you can better help your clients.
Local businesses can have differing budgets, so consider that when choosing your niche. If you want to make more, you can focus on established businesses with more funds to pay a bookkeeper.
If you have a hard time getting local clients, you can offer your services online. You can market yourself as a virtual bookkeeper with no need to meet in-person with clients.
That can be great if you want to work from home and control your schedule. You can use email and phone calls to communicate with your clients.
Then, you can do your best work in an environment that suits you. You won't have to invest in office space, so you can lower your costs and increase your profits.
Virtual bookkeeping can also increase your profits by saving money on bookkeeping tools. If you use digital tools, you can start for free or cheap, and you can keep more of your revenue.
How to Choose Your Bookkeeping Niche
When starting a bookkeeping business, you should consider your area of focus. It can help you narrow your marketing efforts, and you can learn more about your clients and their work.
Having a niche is also one of the best tips for how to find bookkeeping clients. Odds are a law firm would prefer a legal bookkeeper over a general bookkeeper.
Here are a few things to think about so that you can start a profitable bookkeeping business.
Review Your Experience
If you've been in the workforce, think about your previous jobs. Your jobs could have been as a bookkeeper or not, but consider the experience you have.
Perhaps you worked as a bookkeeper for a law firm and know how the finances work. That can be a great sign that legal bookkeeping is the right niche for you.
Or maybe you worked as a teacher and enjoyed working with kids and other teachers. So you decide you should start a bookkeeping business with a focus on schools or childcare centers.
You can leverage the experience you have to start your business. You can then convince clients you're an expert in their field and the right bookkeeper for the job.
Consider Your Interests
Next, you should think about what interests you have. If you don't have experience or want to do something new, focus on what you like.
You could focus on local restaurants if you enjoy trying new foods. Or, if you have a passion for the arts, you could work with arts organizations.
While you can make your bookkeeping business profitable, you should do something you enjoy. If you can't stand the idea of working in a certain industry, you shouldn't choose that niche even if it's the most profitable.
Instead, combine your interests with the goal of a profitable business. Then, you can push through the beginning when you may not make much of a profit.
Determine Your Income Needs
You should also figure out how much money you need to make each month or year. If one niche interests you, make sure the clients in it can pay your bills.
While money isn't everything, it is important. It's not worth choosing a niche if it won't get you enough money to support yourself.
If you haven't already, calculate how much you spend on rent, food, and transportation. Add in the money you spend on insurance, your phone bill, and any debt you have.
Then, add about 20 to 30 percent to account for taxes. Figure out if you can reasonably charge that amount to all of your clients combined, and you can determine if the niche is profitable for you.
Research the Market
To verify that your niche is profitable, you should do some market research. See if there are other bookkeepers with businesses in the same area.
While too much competition is bad, some are good. It means that clients in your niche need your services, so your business can be successful.
You can research other bookkeeping business websites for pricing info. They may not all list prices, but you can get an idea of how much other bookkeepers make.
That way, you can compare it to the income you need. If you realize you can't make enough, you can search for other bookkeeping niche ideas.
Once you find a bookkeeping niche, see how focused you can get. For example, you can focus on bookkeeping for car accident law firms. Or your niche could cover non-profit hospitals.
Starting small can seem limiting. But you can accept clients outside of your main niche. Having a small niche means you can make your marketing efforts hyperfocused.
You can tailor your services to a specific business or entrepreneur. That way, when that person or business comes across your business, they'll know you're the perfect bookkeeper for them.
As you build your business, you can adjust your niche. You can widen the clients you target, and you can get clients in other industries. But starting small can help you earn a profit sooner rather than later.
Get a Second Opinion
If you aren't sure if your chosen niche is a good idea, you can ask someone else for their thoughts. You can connect with a bookkeeping franchise to get support along the way when building your business.
Going with a franchise means you can go with a business structure that already works. You don't have to spend time trying things and failing.
Also, experienced bookkeepers can give you some advice on your business. They can help you select a niche that interests you and can earn you a decent income.
You won't have to worry about finding the perfect niche yourself. And you can get help with marketing and training to help boost your business.
Know Profit May Not Come Immediately
Starting any business can take time and money. While a bookkeeping business doesn't have a ton of upfront costs, you may not make a lot at first.
You'll have to pay for bookkeeping software and some marketing. You may also need to buy a new computer to do your work.
But the more you stick with it, the easier it will be to start making a profit from your bookkeeping business. As you get more clients, you can get them to refer more clients to you.
After you start, you may not need to work that hard to get new clients, and you can raise your rates to earn even more as you gain more experience.
Starting a Bookkeeping Business
If you want to start a bookkeeping business, you should choose a niche. Sure, you could serve any and every company out there.
But if you don't niche down, you won't be an expert in any one area. Instead, focus on a niche and learn about the finances behind that niche so that you can better help your clients.
Are you ready to start your bookkeeping business? Schedule an introduction call today.