How to Start an Accounting Firm in 2025

Thinking about how to start an accounting firm in today’s rapidly evolving business landscape? You’re not alone. Whether you’re a newly licensed CPA or a seasoned accountant ready to go independent, launching your own firm can offer autonomy, flexibility, and long-term growth potential. But success requires more than just tax software and ambition. This guide walks you through every essential step—from licensing to niche selection, pricing models, technology, and client acquisition. With the rise of virtual accounting firms, automation, and AI-powered tools, there’s never been a better time to build a modern, efficient, and scalable accounting practice.

1. Confirm Your Credentials & Experience

Before hanging out your shingle, verify you meet your state board's requirements. Most states require:

• Active CPA license and 1–2 years of supervised experience.
• Professional ethics exam (e.g., AICPA or state-specific).
• Continuing professional education (CPE) commitment—typically 40 hours annually.

Tip: Even if your state permits non-CPAs to own a minority share of an accounting firm, clients still expect a CPA to sign attest reports. Build credibility early by showcasing your license and memberships (AICPA, state societies, NACPB).

2. Choose a Profitable Niche

Picking a niche is arguably the single biggest strategic decision you’ll make when starting your own CPA firm. It dictates your marketing message, tech stack, pricing, and even the talent you recruit. In saturated markets, specialization signals expertise and lets you command premium fees.

Why it matters

• Market fit: Clients want an accountant who speaks their language—whether that’s SKU level inventory for Amazon FBA sellers or job costing for construction contractors.
• Operational efficiency: A well-defined niche can help you to automate data capture, and train staff faster.
• Pricing confidence: Specializing in one industry or client type helps you clearly communicate the value you provide, making it easier to justify premium pricing and move away from hourly billing.

How to perform niche market analysis

1. Size the opportunity. Use Bureau of Labor Statistics (BLS) and Census data to estimate the number of potential businesses in your region or vertical. Multiply by an average client value (ACV) to gauge total addressable market (TAM).
2. Assess competitive density. Google "[niche] accountant + city" and record how many firms surface on page one. Fewer than ten is a green light; more than twenty means you’ll need a distinct angle.
3. Map pain points. Lurk in subreddit threads (e.g., r/entrepreneur) and LinkedIn groups to note recurring bookkeeping or compliance headaches. Each pain point becomes a service line.
4. Validate pricing. See what similar accounting firms are charging. Interview 5–10 target prospects. Present three fixed fee packages and gauge reaction. This prevents a "race to the bottom" later.
5. Run a pilot. Offer discounted services to two beta clients for 90 days. Measure hours logged, revision requests, and client satisfaction to confirm margins.

Example niches for 2025

Tip: Even a local, brick and mortar CPA firm can find it's niche.

3. Marketing and Sales Strategy

A brilliant niche and service offering won’t matter if ideal clients never discover you when opening an accounting firm. This section walks you through building a creating your go to market strategy that attracts, nurtures, and converts prospects into long term clients.

Define Your Ideal Customer Profile

Create a one page snapshot that covers:

• Industry & business model: What type of industry and business does your customer belong to
• Demographics: company size, founder age, tech adoption level
• Trigger events: funding round closed, hit nexus for sales tax, DIY bookkeeping pain
• Primary goals: fast monthly close, cash flow visibility, audit readiness

Map the Customer Journey

Select Your Core Channels

1. Search (SEO + Local SEO)
2. • Optimize service pages around “CPA for [niche]” and geo-specific keywords. Use a tool like Semrush or hrefs to help you understand what target customers might be searching for.
   • Claim & update your Google Business Profile
2. Social Media
3. • LinkedIn: Publish weekly carousels breaking down KPI benchmarks.
   • TikTok/Instagram Reels: 60 second tax tips with captions and on-screen graphics to reach founders under 35.
3. Thought leadership Webinars & Podcasts
4. • Partner with vertical specific software vendors; swap lead lists.
4. Outbound Email & Cold Direct Messages (optional)
5. • Hyper-personalized emails referencing a recent funding announcement convert up to 10%.

Cover the Basics of an Online Presence

• Name & domain: Check state board naming rules (often must include “CPAs” or “Accounting”).
• Logo & visual identity: Keep it clean; blue conveys trust.
• Website: Publish service pages, pricing, thought leadership blog posts. We've made a whole blog about this topic for how to create an accounting firm website.
• Social media: LinkedIn for B2B; TikTok/Instagram Reels for tax tips.
• Google Business Profile: Rank locally for “CPA near me.”

Define an Automated, Low-Friction Sales Funnel

1. Landing page with social proof and a booking widget.
2. Qualification call (15 min) to confirm fit and filter out non-target customers.
3. Deep-dive discovery (45 min) recorded on Zoom—with notes auto synced to your CRM.
4. Dynamic proposal (scope + fixed fee) with e-signature and ACH payment link.
5. Onboarding kickoff—client uploads prior year files via a secure portal.

4. Prepare a Modern Tech Stack for Operations

A cloud first stack keeps overhead low and supports remote teams. We at Foyer have written an entire blog about software for accounting firms, so we'll only give you the quick checklist below for new accounting firms.

• General ledger: QuickBooks Online, Xero
• Tax prep: ProConnect, UltraTax
• Payroll: Gusto, Rippling
• Client portal & payments: Foyer (fully branded accounting portal, e-signature, file exchange)
• Workflow & automation: Karbon, Zapier, AI assistants for data entry
• Analytics & advisory: Fathom, Syft

5. Handle Licensing, Insurance & Compliance

6. Calculate All Startup Costs & Funding Options

Startup budgets vary widely, but every founder should draft a bottom-up estimate that covers across these categories:

1. Licenses, permits & professional insurance – compliance fees such as your state CPA firm registration, local business licenses, E&O and cyber liability premiums.
2. Technology & equipment – laptop or desktop, second monitor, secure router, and monthly cloud software subscriptions (GL, tax prep, practice management, data backup).
3. Workspace & utilities – home office upgrades or a co-working membership; if you’ll meet clients in person, include rent, furniture, signage and cleaning.
4. Marketing & sales enablement – brand design, website hosting, SEO tools, paid ads, webinar platforms and initial business development travel.
5. Professional services – legal entity formation, contract templates, your own bookkeeping and advisory sessions with a tax attorney.
6. Staffing & training – first hires (even fractional or offshore), payroll taxes, continuing professional education (CPE) and HR software.
7. Working capital & contingency – at least three months of operating expenses set aside for uneven cash flow or delayed client payments.

Funding options

Choose the least costly capital that lets you preserve control and hit your first year growth targets. Most solo CPAs bootstrap from savings or freelance income, but you can also:

• Use a business credit card or revolving line of credit for short term cash gaps.
• Apply for an SBA 7(a) loan to spread equipment and marketing costs over five to seven years.
• Leverage equipment financing for laptops and office furniture.
• Seek a modest equity investment from a strategic partner if you plan to scale quickly.

Choose the least-costly capital that lets you preserve control and hit your first-year growth targets as you start a CPA practice.

7. Define & Price Your Service Packages

Now that you understand your target customer and operating costs, set pricing that reflects value:

1. List core deliverables (bookkeeping, monthly closes, tax returns, CFO calls).
2. Bundle into three or four tiers, e.g., Starter, Growth, Scale.
3. Price on value and volume, not hours, wherever possible.
4. Offer annual contracts with auto-pay to stabilize cash-flow for a fledgling accounting business.

8. Draft a Business Plan & Select a Legal Structure

You’ve gathered everything you need to distill into a concise, actionable plan. Once that plan is finalised—and you’ve chosen the right legal structure—file for your EIN and open a dedicated business bank account on Day 1.

Key components of your plan:

1. Executive summary
2. Customer profile
3. Services & market analysis
4. Marketing & sales strategy
5. Operations & tech stack

When choosing your entity, balance liability protection and tax treatment:

9. Execute Your Plan and Win Your First Clients

• Content marketing: Publish niche specific tax guides; repurpose snippets on Reddit and LinkedIn. Consistency is key—the first ten clients often come from regular posting over three to four months.
• Personal network: Announce your launch on LinkedIn and alumni groups.
• Partnerships: Join industry associations (e.g., SaaS Founders Slack) and offer educational webinars.
• Referral program: Give existing clients one free month for every referral that signs an annual plan.

Frequently Asked Questions

Do I need to be a CPA to start an accounting firm?

Technically, some states allow non-CPAs to own a portion of the business, but at least one licensed CPA must supervise attest work.

How much money do I need to start?

A lean, home based firm can launch for under $10k; a staffed office can exceed $50k.

Can I run a virtual accounting firm from home?

Yes—cloud software and a secure client portal let you serve clients anywhere.

What software do new accounting firms use?

QuickBooks Online, Xero, ProConnect, and Foyer's branded client portal are 2025 staples.

How long does it take to become profitable?

Most founders reach break even within 6–12 months with 15–20 retainer clients.

Conclusion

Launching an accounting firm—or building a CPA practice from scratch—is a marathon, not a sprint. By following the steps outlined in this guide—securing credentials, positioning yourself in a well researched niche, crafting a clear go to market strategy, and equipping your practice with scalable technology—you’ve built a solid foundation for sustainable growth. Continue to revisit your plan, track key metrics, and adapt to regulatory or technological shifts. Above all, keep the client experience at the heart of every decision. Firms that communicate proactively, deliver timely insights, and educate their clients consistently grow through referrals and long term relationships.

Note

This article is for informational purposes and does not constitute legal or tax advice. Consult your state board of accountancy and legal counsel before making business decisions.