All businesses need bookkeeping, so a bookkeeping franchisee need not worry about running out of customers. After all, some people would prefer to run their business than manage its books. Moreover, some businesses do not have enough bookkeeping tasks to justify employing full-time bookkeepers. Thus, they choose to outsource their bookkeeping.
With a solid demand in the market, it comes as no surprise that a bookkeeping franchise is a profitable investment.
The Lucrative Business of Bookkeeping
Sageworks, a financial information company, reported that bookkeeping, alongside accounting, tax preparation, and payroll services, is the most profitable industry in the country. The report found that the industry enjoyed net profits of 18.4% from June 2016 to June 2017.
Meanwhile, IBISWorld, a market research firm, reported that the payroll and bookkeeping industry has been growing for the past five years. This is because businesses want to take advantage of the strong economic conditions; instead of handling the books, they focus their efforts on improving their products and services. So, they opt to outsource their bookkeeping tasks.
Projected Growth of the Bookkeeping Industry
Experts anticipate a growth in bookkeeping services. IBISWorld, for instance, claims that the improving labor market will drive the demand for the industry over the next years. Meanwhile, PR Newswire adds that American small businesses anticipate a growth over the next six months. In fact, about 69% of owners foresee a positive path for their respective ventures. Thus, it’s safe to assume that business is about to get better for a bookkeeping franchise.
Make Bookkeeping More Profitable
Although a bookkeeping franchise is profitable, a sound financial strategy should still be in place to maintain its momentum. The CNBC warns franchisees against big, over-the-top numbers, for instance. A franchisee must understand the realistic targets of his business (in the case of bookkeeping, the CNBC reports that the average pre-tax income for financial and tax services franchises in 2015 is around $74,722). This depends on the marketing strategies of the business.
Moreover, Accoa, an accounting coaching platform, states that the right combination of technology, pricing, and processes can make the business even more lucrative, and these are usually taught at the training sessions conducted by the franchisor.
A bookkeeping franchise is, by nature, a stable and profitable venture, and the outlook in the years to come is even more positive. The franchisee, however, still has to make sure that the business maximizes its earning potential.