CPAs flock to at-home offices to battle downturn. Is it the right move for you?
by Rick Telberg/On Careers
If past recessions are any guide, the number of CPAs launching solo or side practices should surge in the next few months. But is it the right strategy for you?
The practitioners I hear from who are already working at home give it a double thumbs up. Still, the work-at-home accounting practice is not for everyone. It requires the right focus, self-discipline and an appropriate home-office setup.
Don Weinstein has seen the trend before. Even now, as vice president of strategy and marketing at Automatic Data Processing Inc., he notes that small business has generally been faring better than large business. And franchising is expanding. Indeed, CPAs can be very competitive.
Harking back to his days at a Big Four accounting firm, Weinstein told me, “I know that when I worked in consulting, whenever someone left, they hung out their own shingle and started working with the same clients, but at half the price because they didn’t have all the overhead of the large company.â€
But, how do they like it? CPAs who own their own home-based businesses tend to be extraordinarily enthusiastic about what they do and are apt to encourage other CPAs to branch out on their own.
In a series of surveys of over 1,617 accountants and CPAs, 66 percent say working at home is “great!†Thirty-two percent call it “okay†and only two percent call it “lousy.â€
“Try it. You might like it. It’s much easier to coordinate work and personal life if they are in the same place,†advises Maurie Fox-Warren, who operates an at-home public practice in Cambridge, Mass., that focuses on small business and professionals. She launched the business after first working for another local CPA firm.
“If you want some freedom and the opportunity to control your own destiny, then go for it. There seems to be plenty of work to go around,†adds Tammy Paxton who also owns a CPA practice at her home.
John Sibley, who owns an at-home public practice in suburban Chicago, boasts that being his own boss enabled him to take the time off to watch his daughter play in a college basketball tournament in Charlotte, N.C., last year. He also notes that he’s more productive at home because he has eliminated his former three-hour commute and “the low overhead means more profit to the owner, me.”
Speaking of overhead, John B. Barfield is quick to mention that owning his own at-home practice in Atlanta saves him considerably on gasoline for his car. The amount of those savings has probably increased since you started reading this post.
While the majority of CPAs who own a home business work them full-time, eight percent work less than 10 hours per week on their home businesses, in many cases after other jobs elsewhere.
David Jauvtis, who runs a public practice at his home in Monsey, N.Y., advises others seeking to work from home to “build up slowly as a moonlighting situation and then take the plunge.”
Before taking a plunge consider the elements that CPAs who own their own businesses identify as most essential to successful work at-home arrangements:
- The right attitude and self-discipline
- Good technology
- A dedicated and quiet work area
- Experience and maturity.
Experience and maturity often help confident practitioners realize that they may be more successful by themselves in a small shop than in a big organization among many others.
“It’s great that there are no office politics or commute,” says Leah Melton, who runs an at-home accounting business in Avondale Estates, Ga. “But the bad is that there is no one to bounce ideas off, no one to share the laughter with.”
Indeed, isolation from peers is what home business-owner CPAs most identify as their biggest work challenge.
The top challenges in order of how often identified are:
- Isolation from peers
- Meeting clients in professional settings
- Lack of administrative support
- Time management
For home business-owner accountants, time management is more than just balancing the hours spent on marketing for new clients with those spent completing business at hand. It can also mean overcoming the temptation to work too much because you feel so comfortable at home.
For example, Frances Wallace says the convenience of her home business enables her to get more work done, but she also admits to sometimes working until 3 a.m.
Ron Villiotti says the big drawback to his home public practice in Castle Rock, Colo., is “a tendency, especially during tax season, to always be on the job.â€
Kim Hartman, who also is aware of the temptation to work too much at her home business in Franklin, Tenn., notes, “A dedicated office is essential, preferably a separate room, so that you can walk and ‘leave’ work.â€
Indeed, back in Cambridge, Mass, Fox-Warren has this one negative to say about her home business: “It isn’t great that you never are away from the office.â€
Copyright © 2005-2008 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
15 Responses to “The Recession-Proof Accountant”
Janet E. Cole, CPA
I’m incredibly lucky. My home office is in a separate building – space in my garage apartment – so the office itself is very professional and separate from the house.
I’ve been in this office almost 12 years – all these years as a single mom and having my parents live with me too. The absolute best part is the flexibility for the kids and teenagers – I was always there for anything important – and during my Mother’s lengthy final illness, I could help my Dad take care of her.
The worst part is the social & professional isolation. The second worst aspect is time management – or lack of same!
Thanks,
Janet
Tim Hughes
Rick,
I started my own bookkeeping and accounting practice from home 2 years ago. It has been the best thing I have ever done.
Since I do go to clients and work on a regular basis, I do not feel isolated. Since I have an MBA in International Business and a BA in Finance, and have worked 20 years in various career positions (some in accounting, most not) with large organizations, I have a diverse background which works well for my clients.
The pitfall for me is getting my direct experience level up to speed. It would have been nice to have the training beforehand, however, there are so many resources to get the tools I need.
The only problem for me was that I did get too busy at times, thereby limiting my ability to market the services and to take more classes where I have the deficiencies.
My home office is a bit noisy with my dogs and neighbors dogs barking, so when the time is right, I will create that quiet and necessary office environment. For now, it is working through the tough economic cycle we are currently in.
I think the other hard thing is when you hire a contracted bookkeeper to work independently, it becomes challenging to find good talent that will stay with you. I have heard other home-based bookkeeping and accounting firms have this issue as well.
Warm Regards,
Tim Hughes
Stephen L. Nelson, CPA
Boy, the idea of working out of a home office seems poor to me… Clients value proximity so you’re probably not going to be close to good business clients if you live in a residential area… Also, you don’t have much space flexibility (typically) in a home to deal with expansion in your work and seasonality. Plus, are you even getting good clients if you’re running a “Fred & Barney” operation? Or are you getting price shoppers evaluating your service based principally on price?
I work out of a nice suburban office part with 1500 SF of space… but if I downsize my practice some day (like in retirement) I don’t think I’d go home. I think I’d office share with another practitioner… or work out of a smaller “executive” office.
Laura L Canales CPA
I give the work at home a double thumbs up as well. Like Ms. Fox-Warren, I started taking on clients while working for someone else, though it was as a controller for a private firm, not in public accounting. After that company sold, I worked for a public firm and still built my client base with the knowledge and blessing of my employer – as long as, we agreed, that my clients would be from referrals from my current roster or from students in my classes. Like Mr. Jauvtis, I built my business up by moonlighting, sometimes more like midnighting!
This November, I took the plunge, quitting my job with the public firm and hanging out my shingle full-time for myself. Yes, like Mr. Weinstein states in his comments, I do work at a lower rate than most others of my experience and firm size, because I have no additional overhead and can pass some savings along to my clients. I differ a bit, however, from Mr. Sibley and Mr. Barfield who are both saving on gasoline by having an at-home practice. I agree with the shortened commute to the office, but I am one of the few CPAs in Boise that makes “house calls†to my clients businesses and homes – so my fuel bill is about the same.
I agree with most of the comments from your other contributors to the article: Ms. Paxton who states there’s plenty of work and the freedom of control over your business; Ms. Melton’s comment about no politics or commute, but no interaction and sharing (my biggest negative point about working on my own); and Ms. Wallace and Mr. Villiotti who might work too late or be too accessable.
Working for myself is the hardest decision I have made in a very long time. And the timing in this current economy might not be the best in the short-term. But despite the drawbacks mentioned, I believe that I can now give my clients – old and new – all of my attention and the care and service that I know they deserve. And I couldn’t do that if I continued to work for someone else.
Loretta Dash, CPA
What started as an accomodation as I recovered from a accident, became a long-term decision. Over time, it eliminated space in the western location as more files and equipment were moved east.
I am partner in a firm but work out of my home office. It is a fully functional office located in a separate room. Through technology, files can be sent back and forth for review or mailing. Strategically it allowed the firm to expand further west without concern for my commute and lease less space. The eastern office accomodated eastern located clients. It has not presented insurmountable difficulties. I go to the western office on a regular basis to work, maintain relationships and to drop off/pick up files and office supplies.
I find I have less interruptions and more quality work time. I work much more efficiently and resolve complex issues more quickly. I am at home alone during the work day, I definitely could not do this when my children were younger. I am very grateful that the technology exists to have this opportunity now.
Michael Steele, CPA
Rick –
I built a log cabin office on a wooded hillside behind my home overlooking a 50-acre preserve. It has a high speed cable internet connection to my office network in town. I can do almost everything in my cabin office that I can do in my in town office.
I now come home early for dinner during tax season then work in the cabin in the evenings and on weekends. It is a nice break from the main office and I enjoy the large fireplace and watching the deer and turkey in the field.
It has really reduced the tax season stress.
Jim & Karon Stone
You don’t have to be isolated from your peers. Get involved in your local CPA society chapter. It is a great opportunity to make new friends and find others who are willing to share ideas, answer questions, etc. Of course, you have to be willing to share your expertise with them as well. It is a win, win situation for everyone who participates. It is also a source of referrals because we are all experts at something, but yet we are all different and we don’t all want to do exactly the same things. It is also how we compete with the Big 4, who have experts in everything just a few doors down the hall. This has served us well for more than 35 years.
Alphonse Sperske
I have been working for myself for about forty years. Part time when times were bad and full time for most of the time. Working at home was very hard when I was married but as a single person it is a good arrangement. After my Children went off to college or married, it is the best way for me.
You must attend live continuing ed classes as that is the only way you can find out how others are doing things.
I spend extra for tech as I need backup if things break.
Mike Carpenter CPA
I’m beyond the moonlighting phase, but not quite to the solely-working-at-home phase.
I work at a local CPA firm, and also have the office in the home. It’s roughly 50/50 for hours spent.
The client base is completely separate, no overlap. The employers have known about the home-based business from the start.
The problem is that I’m never away from work. When I leave the office, I go right into the office. So during tax season, I’m working two 40+ hour weeks at the same time. But straddling the line does give me what some home-based businesses don’t have: a sounding board. Often, they’ll have a problem in the office, that I’ve seen at home, and vice versa. There is relatively little commute, so no problem there.
The problem is that my moonlighting business is the same as my daily work. I think if I was a janitor at night, there would be no problem with the employer. But because I do the same thing in two different places, it blurs the line – both for me and the employer.
The good thing about working from home is that it’s all right there: I walk downstairs to the office. Of course, that’s the bad thing as well.
The family is always present. But that’s been a blessing as well.
Outside of tax season, and even during, I’m able to flex my schedule to do things I might not normally be able to do if I worked solely for an employer.
Although I work on every facet of the return at home, I only focus on preparation and research as an employee. So I’m helped along by being able to have CPE through the firm. I get the best of both worlds, but also the worst of both worlds during tax season. That’s just the price I pay for being a little flexible. One of these years, it’ll have to turn one way or another, but right now, it works out okay.
I’d say that the important thing about working at home is trying to keep a consistent schedule. That’s easier said than done, but keep the family side separate from the work side and it’ll work out.
Art Ribail CPA
Hey Rick
After being a member in a top 50 regional Firm, and then leaving that practice to open my own 25-person regional Firm, and then retiring from that Firm to start a from-home consulting practice, I could not be happier.
The problem with managing a practice within a large Firm, or even managing your own local Firm is just that – managing. I found that I missed working with clients, and when I had the opportunity to really get involved in a client project, I no sooner started to feel energized again and I was sucked back in to the “practice management abyss,” the daily blocking and tackling necessary to run a practice.
My days now are made up of client problems, not Firm problems, and after 25 years I realize that this was the area that I missed…
Alan Lury CPA MBA MST
Read your column every week….
I have been on my own since beginning of 2003 after working in industry for previous 17 years or so. I recommend that if you are going to plunge into this full time the need for an outside office is imperative. I work from home on weekends and nights, but work out of my very small (and cheap) office during the week. Too many distractions at home for me to consider working here full time.
I have my computers linked so that I can access my information back and forth between my office and home and vise versa. Not looking forward to the addiitonal competition, but understandable considering the economy.
However this recession so far is not as severe in this area and it is definitely not the high tech recession of 2002-03.
Cheryl Leydon
I left PwC when my oldest daughter was a toddler – about 8 years ago. I took a handful of clients the firm was looking to offload, mainly to cover the cost of my CPE.
The business went from a few hours per week to a few days and now keeps myself and my husband fully employed.
Because a large percentage of our tax clients live around the world, we were even able to relocate to be closer to a parent in declining health without missing a beat. We now each have an office in our house. We’ve also turned to a “virtual office†to provide a business mailing address and a setting to meet local clients.
We are active in the business, in the community and have the time to spend with our daughters in each of their activities.
When we have quite a bit of work in-house, it’s not difficult to stay focused. I’ve found that I work all the time during tax season, whether working for myself or someone else. However, it’s easier to integrate family time during breaks when you are under the same roof as the family.
When the work is slower it’s more difficult to focus – that’s my biggest challenge.
Lynette J. Anderson CPA
I took the leap from a mid-sized CPA firm 4½ years ago to start my own practice and set up in an office space. I had plenty of experience (20+ years in public accounting) but was never good with meeting clients one-on-one (always worked as manager or staff with little direct contact with clients); I learned fast!
I unexpectedly got the opportunity to terminate the last year of a five year lease in July, looked for smaller office space then decided to give the home office a try. Losing some clients was expected (and needed) and losing over $30,000 in overhead costs more than offset the lost revenue.
The biggest challenge has been “meeting clients in professional settings.†After four years in an office space and admittedly ‘spoiling’ my clients who often simply dropped in (as well as many new clients), now I am desperately trying to figure out what I’ll do before tax season gets here.
It will work out and, so far, no regrets at all.
Thala Taperman Rolnick, CPA
Please see Senate bill 3371 regarding changes to the home office requirements. I have been working with Senator Snowe’s staff on this bill. While Rep. Velazquez has supported a different bill HR 660, Rep Gonzalez has proposed a companion bill to Senator Snowe’s bill.
If you look at the HR Committee on Small Business, 7 Ways to stimulate the economy by updating the Internal Revenue Code, dated April 10, 2008, you will find an analysis of home office issues.
Chris Mathis
excellent article.