Accounting and Financial Franchise UK – the TOP 10 MUST KNOWS about finding and running successful UK Accounting and Financial Franchises.
The UK is one of the nerve centres of global business, trade and financial services. Naturally, there’s a never-ending demand for skilled service providers. Accounting and Financial Franchise UK give skilled entrepreneurs a great way of meeting this demand and establishing a reliable source of stable income.
Accounting and Financial Franchise UK are well-and-truly unique. They don’t always require you to rent a prime high-street office (although renting one helps), and they certainly don’t need you to deal with hundreds of customers on a daily basis – just a few good ones often do the trick.
Financial, accounting and tax franchises have enjoyed steady – often predictable – growth over the years for a simple reason – they have high tolerance against market ups and downs. It doesn’t matter if you’re having a good year or bad, your business will almost always require the services of qualified, trusted and reliable financial advisors, accounting experts and tax consultants.
In that sense, if you’re thinking about buying and running a financial and accounting franchise, you already have a head start over most other franchising business sectors. But how does it work? How much do accounting franchises cost? What are the considerations? What challenges should franchisees be aware of moving forward?
We’ll try to answer these (and more) questions in this accounting and financial franchising guide.
Financial Services and Accounting Franchise UK: The Demand Will (Almost) Always Be There!
There’s a reason why many young professionals want to enter the financial sector. It’s a phenomenon that finds itself rooted around the world: money is where money is handled.
From bankers to accountants and tax consultants to asset managers, financial service professionals and businesses find themselves right at the top of the wealth-pyramid. Barring the exceptionally bleak periods of bad economy, the financial sector has almost always been rewarding to these professionals.
There’s a simple reason for all this: the demand seems to be almost always guaranteed. And the supply, equally importantly, is almost always barely enough to keep up. Businesses need financial service providers when they are doing good, and more badly when they aren’t.
Here are some numbers that quantify this idea. These will help you understand why financial sector franchises make for great investment opportunities for those who possess the right skill set:
- The accounting sector in the UK rose at an average of 5% per year from 2014 through 2018. This growth rate is comfortably above the overall growth rate of the UK economy.
- The overall size of the UK accounting industry is estimated to be £5.5 bn, an impressive number given the limited scope of the operations.
- Over 5,400 businesses are estimated to offer various levels and kinds of accounting and auditing services in the UK.
- Over 48,000 people are employed by the sector.
For a specialty sector, these numbers are great. What stands out is the fact that the growth rate has been steady and above average even through the slow phases of economy. If you’re thinking about buying and running an accounting franchise in the UK, this is definitely a good foundation to base your decisions upon.
The ‘Trust’ Argument for Financial and Accounting Franchise UK
As we mentioned in the previous part, there are close to 5,500 accounting and auditing businesses in the UK, employing close to 50,000 people. Evidently, the average organisation size is less than 10. If we discount the Big 4, this number is bound to drop drastically.
What this means is that most accounting businesses in the UK are limited to offering services to small businesses in local, hands-on ways. If we look at this as an opportunity, it’s clear that there’s great potential for accounting and financial businesses to capture the scattered market provided by small and medium sized businesses and even individuals.
But it’s not always that easy.
As a standalone accounting business, you’ll always have a hard time finding, onboarding and closing clients. Most businesses prefer to work with established accounting professionals and firms, even if it means having to shell out more money. So, building a successful accounting business from the ground up is always going to be an uphill task.
This is where the idea of franchising comes to the fore. By working as a franchise unit of an already established and successful accounting and auditing business, you make sure that you overcome the biggest barrier to client acquisition.
Types of Financial and Accounting Franchise UK
Ever since the internet has become mainstream, the financial sector has seen tremendous innovations. From digital financial forensics to cryptocurrencies that have fascinated the youth, new doors have been opening for business. In the coming years, you can expect the financial and accounting franchises in the UK to embrace new trends, discard the old ones and create new avenues for skilled entrepreneurs.
For now, however, the types of accounting and financial franchises are largely limited to the few usual suspects. Some of these types will be discussed in more details on our blog in coming weeks.
These are the most common financial franchises you can find. There are many successful accounting and auditing businesses and firms that are looking to expand their operations in new regions and districts. It’s not always an affordable mission, and hence, establishing franchise units often turns out to be the most cost-effective way for such firms.
Among all accounting and auditing franchises, the most common are bookkeeping franchises and SME accounting franchises, followed by more specialty alternatives like digital accounting, forensic auditing and multinational accounting franchises.
As a would-be accounting franchisee, you can make this trend work in your favour by buying a reasonably priced, established and successful franchisor.
Financial Planner Franchises
While not very common, financial planner franchises can be immensely profitable if you can find the right franchisor. These essentially involve your franchise unit working with local businesses, professionals, organisations and high net worth individuals. As we mentioned earlier, trust and track record are the two most important driving forces – and hence, having a credible, reputed franchisor on your side can help you earn much more than you otherwise would working as an employee of a firm.
Tax Advisor/Consultant Franchises
These can also be seen as an offshoot of accounting franchises. If you specialise in tax-related fields (think tax laws, international taxation, SME taxation and so on), you could combine your expertise with the strong profile and brand name of a franchisor.
Working as a local tax advisor or consultant, you can expect to work on a retainer basis with SMEs, charities, associations and individuals.
Finance franchises (commercial finance franchises, in particular) are fairly popular thanks to their proven, scalable business models.
By buying a finance franchise, you operate as an independent unit of the franchisor business, operating in the given territory. You’ll either be generating leads for the franchisor through your local network or closing them on your own.
Again, there are multiple narrow niches in this sector – HMO finance franchises, bridging finance franchises, just to name a couple.
How Much Does a Financial and Accounting Franchise UK Cost?
The answer largely depends on the following factors:
- The area of operations,
- The territory you choose,
- The brand value of the franchisor,
- The local demand forces for the services you’ll be offering.
All of these factors can be measured up in an actionable way with detailed, systematic franchise market research.
A thorough analysis of dozens of accounting and financial franchises in the UK shows that, on an average, franchisees need £20,000 to £40,000 in minimum initial investment to get started.
The other costs that need to be considered for such franchises are:
- Office rent
- Staff salaries
- Marketing budget
- Networking budget
- IT and software expenses
- Franchise taxes
- Monthly commissions/royalties/fees to the franchisor
On the incomings front, it’s rather difficult to say when accounting franchises can break even. It all depends on how fast you can generate leads and convert them into customers. Onboarding a single large business can often be enough to push the franchise towards profitability, whereas you’d require dozens of small clients if you’re operating in a territory with less demand to achieve the same results.
Accounting, Financial and Tax Franchises – Should You Buy One?
Typically, financial, tax, accounting and auditing franchises are best suited to professionals who can bring on board some level of prior experience in the industry. This is largely due to the fact that these franchises are specialty businesses, and you almost always need various certifications and licences to run the show.
In addition, you’ll be required to have certain personal and professional traits to succeed in what essentially is a trust-driven, competitive field. If you’re a motivated professional who is familiar with the basics of running a business, most franchisors will have no problems working with you.
Can You Run an Accounting Franchise from Home?
There are quite a few financial services franchises that allow you to work from home.
Home-based franchises, however, have certain inherent limitations. If you’re running an accounting and auditing franchise from home, not having an office address can potentially soften the professional edge. This is, of course, a factor that needs to be weighed against many other factors like the size of your territory and the business demographic you’ll be targetting.
Recommended: Read More About Home-Based Franchises Here.
Top Financial and Accounting Franchise UK
If you’re looking for an accounting franchise that ticks all the boxes for you, be sure to first check out our free How to Choose a Franchise guide.
Here’s an overview of some of the most popular options:
- Minimum Initial Investment: £36,950 (plus VAT)
- USP: Accounting services for small businesses
- Dedicated Training Academy
- Chance to grow the franchise unit in value with a healthy resale multiplier
- 200+ exclusive territories available across the UK
- Full BFA Member
- Minimum Initial Investment: £25,000 (plus VAT)
- USP: Tax accountants and advisors for SMEs and individuals
- 4-week training programme
- IT assistance
- Marketing assistance
- Networking opportunities via events and workshops
- Exclusive territories
- BFA Membership (Provisional)
- Minimum Initial Investment: £16,495 (plus VAT)
- USP: Whole of market commercial finance broker with UK-wide operations
- Exclusive territories
- 2-day residential training
- Full marketing, admin and IT support
- Chance to break even within months
- High volume, recurring business with high commissions
- Diversity through working with both Property Based clients as well as SMEs
- Minimum Initial Investment: £5,511 (plus VAT)
- USP: Affordable home-based bookkeeping services
- Work from home opportunity
- Growth-oriented business model
- Anticipated profit margins around 50%
- Associate BFA Member
- Minimum Initial Investment: £9,995 (plus VAT)
- USP: Accounting and tax advisory services for professionals and businesses
- Full training from Chartered Certified professionals
- Unique combination of business and personal accounting services
- 100+ franchise units in operation across the UK
- Minimum Initial Investment: £15,000 (plus VAT)
- USP: Accounting services for small businesses
- Well-established business name and model
- Wide range of services on offer for clients
- Exclusive territory with a minimum of 3,000 potential clients
- Full training programme
- Website, admin and marketing support
Financial, Accounting, Auditing and Bookkeeping Franchise UK: The Takeaways
- Know what your professional strengths are. Choose a franchisor that offers services compatible with those.
- Make sure you’ve got your market research right.
- Keep up with new trends and changing business demands.
- If you’re not an experienced franchisee, it may be a good idea to start small.
- Invest carefully.
- Networking is the key to success in the financial sector. Build a network of clients that keeps bringing in passive prospects.
At franchise4u, our aim is to educate, inform and guide franchisees and franchisors. If you run a successful accountancy or financial franchise, thousands of our readers can benefit from your experiences and expertise. To know more about how you can get featured on our website, do feel free to drop us a line here.