When you are starting up in practice it is important that you are aware of the options to consider. Often the first steps are the most difficult ones. This resource will help by pointing you in the direction of answers to some key questions.
Your roles will include managing director, finance director, compliance director, technical director and money-laundering reporting officer. They will extend to client-facing roles as well as accounts and tax preparation. And they then extend further to the more esoteric areas such as health and safety for example. So everything is now your responsibility. If it has a deadline, diarise it!
What is certain is that you will review this list thinking 'I haven't done the majority of those tasks before.' Do not be put off! You probably have experience of many of them (even if indirectly) and they are manageable.
Focus and prioritise difficult tasks to prevent them becoming real problems. For example, there are practitioners who can provide an excellent service but do not like the challenge of chasing outstanding debts. Not surprisingly, clients may take an exceptionally long time to pay. The effective management of such an issue is important for those practitioners.
When we hold setting up in practice presentations, it is clear that a lot of attendees are concerned as to whether their relative inexperience will be a problem. People learn how to manage the problems they face (and we discuss and advise below how to manage the typical issues).
Although this might sound counter-intuitive your inexperience may actually be a benefit! If you have always done something in a particular way you might assume it to be the correct way. If you have no experience in an area, you are more likely to be open to considering alternative methods of doing things.
Build a bank of specialist support. Never be afraid to say no if you are unsure of the technical difficulty or risk perspective of potential work, for example if you have a client seeking investment or legal advice.
Know your own limitations and ensure that, if you need technical input from colleagues, you have support from specialists you can refer work to or call on. Always ensure that your terms with them are clear. If they act as your subcontractor for a complex area that you are unfamiliar with it may be that your professional indemnity insurance will bear a claim in the unfortunate event that they make a mistake. Or will you refer your clients on to them to advise, with them taking client engagement responsibilities for this area? How such referrals are contracted (from the client's perspective) can be extremely important. Be careful that your referral basis works for you and that you can manage it well.
Some practitioners do not want to employ staff. Their desire is to remain a solo practitioner. Others are planning to start small but end up in a larger firm, possibly with business partners and certainly with staff. Where you want to end up will shape your objectives and lead to many other decisions becoming clear, such as office location and marketing.
Consider whether or not you will need staff. If you do, plan to recruit them well in advance to ensure you have the right people at the right time. Recruitment is not necessarily easy and may be more difficult depending on your location. If you have the lure of a large city drawing staff away, you may find it more difficult.
If you are engaging staff, don't forget the human resource implications of being an employer (PAYE/NI and employment law), the ICAEW guide to employment basics is a useful resource that you can refer to.
Some firms recruit with sub-contractors working from their homes to assist in busy periods, giving flexibility and enabling deadlines to be met. This may be your interim solution. But you need to be happy at delegating the completion to someone who may be doing the work at different times to yourself. If you are using sub-contractors enter into a sub-contract agreement with them. ICAEW has helpsheets explaining some relevant considerations and one with a proforma sub-contractor’s agreement.