Launching a New Bookkeeping Venture in Canada: Is Our Pricing Strategy Sound?
Starting a new business venture always comes with its share of excitement and challenges. My colleague and I are embarking on this journey by establishing our own Bookkeeping firm in Canada. It’s a transition that’s been made smoother by the fact that we’ve already secured a client base, thanks to a CPA who is winding down her tax and Bookkeeping operations and graciously passing her clients onto us.
One of the initial tasks on our agenda is setting our pricing structure. After much deliberation, we have settled on a rate of $55 per hour for our services. We arrived at this figure partly by considering that the previous CPA, who held a formal designation, charged $70 per hour. While we’re not designated CPAs, we bring a wealth of experience to the table—over five years for myself and more than two for my partner.
An important decision we made is to track our billable hours individually. This approach not only motivates us to each seek out additional clients but also ensures a fair allocation of earnings based on effort and client acquisition.
Our bookkeeping service portfolio includes key offerings such as reconciliation, payroll processing, accounts payable and receivable management, as well as GST/PST handling. We believe these cover the essential needs of most businesses, providing comprehensive support.
I’d love to hear from other bookkeeping professionals out there. Are any of you working in similar partnerships? What insights or advice can you share about setting rates or managing a bookkeeping business collaboratively? Your feedback would be greatly appreciated as we navigate the early stages of our business.
Thank you for reading, and I look forward to your thoughts!
One response
Congratulations on your new Bookkeeping partnership! It’s fantastic that you’re entering the business with clients already in place, thanks to your arrangement with the departing CPA. Pricing can be a significant factor in establishing your market position and ensuring the sustainability of your business, so it’s wise to consider your options carefully.
Evaluating Your Pricing Strategy
Market Research: Start by conducting market research to understand what other bookkeepers in your area charge. Although you’re based in Canada, Bookkeeping rates can vary significantly by region and market demand. While $55/hr is lower than the $70/hr charged by the CPA, it’s important to ascertain if it’s competitive with other local Bookkeeping firms, especially considering your level of experience.
Value Proposition: Highlight what makes your services unique. If your pricing is lower, ensure that your clients understand the value you bring, such as timely service, personalized attention, or specialized expertise. Since the CPA was designated, she likely justified her higher rate with her credentials and experience. Emphasize your strengths to justify your pricing.
Tiered Pricing: Consider offering tiered pricing packages. Some clients may prefer fixed-rate packages that cover standard services, which can streamline their budgeting and decision-making processes. This approach can also simplify your billing process and might make your services attractive to small businesses that need predictability in their finances.
Incremental Increases: Start with your $55/hr rate, but prepare for incremental increases as your experience grows and your clients see the value you deliver. Regularly review and adjust your rates in line with market standards and inflation.
Managing a Partnership
Clear Role Definition: Clearly define your responsibilities within the partnership to play to each other’s strengths. Your 5+ years of experience versus your partner’s 2+ years might guide who takes on more complex tasks, or you might focus on different aspects of the business, like client acquisition versus bookkeeping tasks.
Communication and Collaboration Tools: Utilize tools that help manage your assignments and billing hours transparently. Tools like QuickBooks Online, Xero, or Trello can be invaluable for tracking tasks, monitoring client interactions, and ensuring both partners have visibility into the business operations.
Ongoing Education and Networking
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