How I started my bookkeeping business with almost no money

Starting your own business can be expensive.   I started one because I was in desperate need of extra income.  This also meant that I didn’t have funds for start-up costs.  With careful research and planning, I was able to start my business for the bare minimum and spread out the costs so that I barely felt the expense.  How?

I will break down my costs and how I handled them.  A lot of these costs vary by area and I shopped around for everything else so I can only report on what I paid.

• DBA registration: $50
• City Business Tax $52.10
• County Business Tax: $15.10
• Domain Registration: $1
• Business Cards $10
• Professional Liability Insurance $58.60

I already had some needed items so I didn’t need to buy them, that may not be the case for you so additional things that you may need to budget for:

• Computer with desk and chair
• Printer- optional in a truly virtual business but nice to have
• Phone- I got a Google Voice line to have a dedicated business number but still use my regular phone
• Internet Service
• Website hosting
• Office Software- there are free alternatives

My Total Start-Up Costs: $186.80

This doesn’t sound like a lot but when you are literally living paycheck to paycheck, it’s a fortune.  I started off working as a freelancer on websites like Upwork and Guru making very little as I competed with free labor from Asia and using the earnings to pay the government costs (DBA and business taxes).

Once I was legal to operate I started to advertise on Craigslist (free) and with the clients that I gained there, I then paid for the advertising costs (domain registration and business cards).  I shopped around and used coupons so I got my domain name for a dollar and change for the first year.  I also got 500 business cards for $10.  I still have most of those business cards, as a virtual business, this is an optional item and just something I like to have.  The website, however, is a must-have for me.

I already know how to build websites and had a hosting account so I didn’t have to pay for this.  You may have to pay for a DIY website solution or pay a professional.  Shop around and use coupons when possible.

I actually didn’t get liability insurance right away, it was a calculated risk as I didn’t want to buy a policy until I knew that I would have the recurring income to maintain it.  Insurance can be very expensive so it’s critical to shop around.  I don’t need a standard business policy so it was even harder to get comparison quotes for a professional liability policy specific to bookkeepers.  The winning policy was over $100 cheaper than all the others. I only had to pay a downpayment and the rest is paid in monthly installments with no extra fees for payments that other insurance companies like to charge.

So that was it! I could have spent money on a lot of things but they were not a must have, so I didn’t.

As a QuickBooks ProAdvisor and Xero Certified Advisor I get the main tools that I need to serve clients at no cost to me.

So now the key has been for my to keep my overhead costs low, so when I have a slow month, it’s no big deal.  There are so many things that would be nice to have.  Services that aim to help your business that sound so tempting but the costs would quickly add up and oftentimes there are free alternatives.  For the tools that I use (most of them free) check out the post I wrote about my Freelancer Toolkit.

My current overhead is:

• City Business Tax: $33.10 per year/ approx. $2.76 per month
• County Business Tax: $15.10 per year/ approx. $1.26 per month
• Liability Insurance: $28.33 per month
• Domain renewal: $10 per year/ approx $0.83 per month

Monthly Overhead: $33.18

My DBA only has to be renewed every 5 years but if you want to count everything add another $10 per year or $0.83 per month.

That’s it for overhead, while my business does have a couple other expenses, they are directly related to client services and thus built into the fee that they pay.

When I first started I was on a binge to find as many business expenses to reduce my tax liability until I realize that if I am spending the money on the business, I am defeating the purpose of having a business, which is to help provide for my family!  I have now implemented the concepts of the Profit First system and having been so lean and frugal from the beginning allowed me to reap the benefits from day one.

So that’s my lean business.  To learn about the mostly free tools that I use, check out my Freelancer Toolkit.