How To Start an Accounting Firm in Kenya

For ‘young’ people, starting their own business and becoming self-employed is the most suitable alternative to the ever-growing hard-to-get 9-to-5 jobs. Starting a business is always the best alternative to the ever-elusive jobs.

A survey by the Kenya National Bureau of Statistics (KNBS) revealed that seven (7) million Kenyans are unemployed. An additional figure of over 1.4 million are actively looking for employment. With those figures, it is easy to see why more and more people are looking for alternatives.

Because we know many business ventures require vast amounts of capital to get started, this new How-To series will only show you how to start and execute several small businesses that need capital from as little as 5,000 Kenyan Shillings. Thus, it will give you the keys to the kingdom of starting a profitable business with little or no capital.

If you are also looking for a side hustle to supplement your 9-to-5 or full-time job, this is for you.

Apart from capital, all you need to thrive in these businesses is good customer service, excellent managerial skills, a suitable location, and a clear-cut vision.

This article will show you how to set up your own Accounting Firm in Kenya. While this is not precisely a 5,000 Kenyan Shillings capital business, you would agree that it is also a viable option.

An Accounting Firm specialises in providing accounting services to clients. These services include handling a client’s payroll, accounts receivable, and accounts payable, as well as taxes and other services.

Just how much do you need to set up an Accounting Firm business? What paperwork and or equipment are you required to have in Kenya? If you are considering this option, here is everything you will need to kickstart your Accounting Firm business in Kenya.

• Acquire The Needed Training. Yes, running an accounting firm business requires some training. Especially if you have not done this professionally before, the training will enable you to better understand the technicalities behind your chosen company. You can get the needed training by becoming a Certified Public Accountant (CPA). The Certified Public Accountant (CPA) qualification is achieved after you have completed the training in all levels of the Certified Public Accountant (CPA) course. The Certified Public Accountant (CPA) course has tests broken down into three parts. Each of the three parts comes with two sections. This means that Part 1 will have sections 1 and 2, Part 2 will have sections 3 and 4 and Part 3 will have sections 5 and 6. All Certified Public Accountant (CPA) exams are set by the Kenya Accountants and Secretaries National Examinations Board (KASNEB).
• Have a Business Plan. Every business must have an effective and concise business plan.
• Figure Out Your Market. You must figure out your market before starting your Accounting Firm business. Your potential customers will be every single legal business on the face of the Earth. Look at it; you cannot succeed without ensuring your accounting is in order.
• Figure Out How to Raise Capital. The Accounting Firm business, like any other business, requires capital investment. After completing your business plan, knowing your market and finding a location, this should be your next line of action. Although Personal funds are sometimes the primary funding source for many new businesses, doing just that may not be enough. Taking on a financial partner is your best bet. If obtaining a business loan from financial institutions proves difficult, the next option should be getting it from friends and family. Loan arrangements in this setting are usually much more flexible as they come with lower interest rates. All you would need to do is convince friends and family of the profitability of your business. Please ensure you repay the money in good time to maintain the confidence you need if you require money from them.
• Create a Unique Logo. The importance of a well-done Logo cannot be overemphasised, especially when making a positive first impression on potential clients. As an accounting firm, your logo and how it reaches anyone who sees it might be the first introduction of your presence to your future clients. With this in mind, create a logo that stands out and sets you apart from the competition.
• Choose The Most Suitable Business Structure for Your Accounting Firm. Choosing a business structure can determine your liability, how much you pay in taxes, and your ability to raise financing. This is why you must select the business structure that is most suitable from the get-go, as changing structures later on could lead to tax consequences. Consult a business accountant and lawyer before deciding if your Accounting Firm would be a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company (LLC).
• Register The Name of Your Accounting Firm. You will need to register the name of your Accounting Firm startup if you plan to run it as a legitimate business. The business name registration would cost you around 1,000 Kenyan Shillings.
• Register With and Obtain A License From The Certified Public Accountants of Kenya (ICPAK). You must register with and obtain a license from the Institute of Certified Public Accountants of Kenya (ICPAK). Established in 1978, the institution is a member of the Pan-African Federation of Accountants (PAFA) and the International Federation of Accountants (IFAC), the global umbrella body for the accountancy profession. You must also have a registered account with the Certified Public Accountants of Kenya (ICPAK).

• A Business License or Permit. This is one of the most fundamental licences businesses in Kenya must have before commencing operations, so yes, you will need one for your Accounting Firm. Although a business licence or permit costs differ from county to county, it usually sits at around 3,000 Kenyan shillings.
• A Location. As with most businesses, a good location is one of the significant factors determining whether your Accounting Firm will succeed. This is especially true for clients who prefer to meet in official settings or premises. Find a location that is both ideal and easily accessible.
• Make Sure Your Accounting Firm is Insured. Although nobody likes to incur extra costs, Insurance is essential to starting any business.
• Secure a Fire Clearance Certificate. This particular certificate is received after undergoing an inspection, which you pay for. It also involves getting advice regarding the guidelines for protection against fire and the installation of the required equipment, such as fire extinguishers.
• Be Trained in Sales. Ensure that you and your staff are well-trained in sales. This will especially come in handy when your business begins to grow, and you are trying to win over new clients and maintain existing ones.
• Plan Out Your Marketing. Next, after figuring out your target market, you should be planning out your marketing. Yes, your Accounting Firm business, like any other business, needs marketing, too. Think about it; what better way to get many clients than by marketing your Accounting Firm? Learn how to get the attention of your target market. Would discounts work? Or referrals or both? How about posters, sponsored adverts on social media and fliers? Email marketing, for example, is one cost-effective and very efficient way to build a customer base for your accounting firm. If you have a website for your business, you can gather people’s email addresses. Fliers are another cost-effective way to market. Flyers are one-page advertisement pieces that can be created at little or no cost. You can distribute these to people in and around the area where your Accounting Firm business will be located. Find out what is most effective for you and use that or a combination of all of them.
• Brand Yourself as an Authority in the Accounting Field. Clients and potential clients tend to believe in businesses perceived as authorities or authoritative in their fields. When you are making a pitch, make sure you are confident.
• Document the Work Your Advertising Agency Does. The best way to win over clients will be to impress them with testimonials of your work. Be sure to document all your work. You can then upload and display work you have done for various clients (who approve of this) on your social media pages and website.
• Make Sure Your Accounting Firm Has an Online Presence. Yes, it would be best if you had an online presence. This includes creating a Facebook page and Twitter and Instagram accounts for your business. You can also make a website for your business to attract larger customers who may require your services in bulk. Ensure the website is easy to navigate and your content is engaging. Ensure that all the relevant information about your company (which includes the contact details for your business and testimonials) is included, as well as the terms & conditions and privacy policy. Hire a professional to ensure the website is well done and looks presentable. The hired professional will also ensure that your website is maintained and updated regularly. Creating a LinkedIn profile for your business will also be a good look and help you further network with other companies. Just make sure that you update your LinkedIn.
• Get an Employer Identification Number. If you want to set up checking accounts for your business or hire employees, you will need an Employer Identification Number. Contact the Kenya Revenue Authority, Kenya’s internal revenue service, to get one.
• Employ More Hands. No one is an island. You really cannot carry out all the daily activities of an Accounting Firm efficiently on your own. Just think of all the numerous accounts you would handle, especially when your customer base begins to grow.
• Make Sure the Accounting for Your Accounting Firm is in Order. You cannot care for your clients’ accounting if your company is incorrectly done. Ensure you consistently record your expenses and the income your business generates. Doing this will ensure you completely understand how your business performs financially. It will also help you when it’s time to file your annual taxes.
• Figure Out Payment Arrangements That Work Best for Your Customers. You need to know the payment methods and arrangements that would work best for your customers and potential customers, i.e., whether they prefer to pay via M-Pesa, T-Kash, Airtel Money, POS, or cash. Knowing this will help you offer more payment options and also be more equipped to serve them better.
• Talk to Others Who Have Done This Before You. No man is an island. While several established business owners are happy to advise new entrepreneurs, finding one willing to do so can take a while. The wait, however, will be worth it. Talk to entrepreneurs who have entered or are still in the Accounting Firm business. Examine, study and understand their various business models and strategies. You never know; you might pick up one or two nuggets of wisdom from them.

And that is it!

Is the Accounting Firm business a suitable venture for you to pursue? That question is left for you to think about and answer.

In addition to the tips provided here, one important thing is to be good at what you do. Consider new ideas and ways to expand and grow your business.

Also, while the prospects are up-and-coming and running an accounting firm might seem easy, please take a realistic approach. Regardless, it still requires a fair amount of dedication and patience. As with any business, you might incur losses, especially initially, so please keep your overheads low.

If you have further questions or concerns, please get in touch with us through our contact us page. We aim to become your preferred choice for accounting SEO-savvy lawyers in Nairobi, Kenya.