A bookkeeping services business is a business that helps its clients handle their books. The main focus of bookkeeping is the recording of financial transactions. Purchases, sales, receipts, and payments made by an individual, organization, or corporation are the essential transactions that bookkeepers record for enterprises.

Statistics have it that the market size of the Payroll & Bookkeeping Services industry in Canada is $5.9 billion in 2023 and the industry experienced a 0.4 percent growth rate per year on average between 2017 and 2022. This is expected to increase by 3.4 percent in 2023.

Steps on How to Start a Bookkeeping Business in Canada  

  1. Conduct Market Research

You should not start a bookkeeping services firm without first completing market research because doing so is essential to the business’s success. Market research offers essential information about your industry and competitive environment.

It can inform you of how the target clients and customers you wish to reach view your company. You may use it to figure out who your consumers are, where they are, and which ones are most likely to buy from you. In essence, extensive market research will enable you to comprehend the mindset of your target market and adjust to their needs in order to win their loyalty.

a. Who is the Target Market for Bookkeeping Business in Canada?
  • Small Agencies
  • Religious Organizations
  • Entrepreneurs and Start-Ups.
b. Is Bookkeeping Business a Profitable Business in Canada?

A bookkeeping services business is a profitable business in Canada because there are loads of small businesses that cannot afford to hire professional accountants. Players in the industry are expected to generate over $5.9 billion in 2023.

c. Are There Existing Niches in the Industry?

No, there is no niche area in the bookkeeping services business.

d. Who are the Major Competitors?
  • Apex Accounting
  • KC & Company | Bookkeeping & Taxes for Canadian Online Entrepreneurs
  • LW Accounting Services
  • Solutions Plus Bookkeeping & Business Services
  • Enkel Backoffice Solutions Inc.
  • Tantelo Services
  • On-Core Bookkeeping Services
  • Kinden Accounting & Advisory Services
  • Asset Bookkeeping & Business Services
  • Acton Accounting & Bookkeeping
  • Avalon Accounting
  • Cloud Business Services
  • GTA Accounting | Tax and Bookkeeping Services
  • Accounting For You Canada
  • R M Bookkeeping & Accounting Services
  • AIS Solutions
  • USTAC Tax and Accounting Canada
  • Intrinsic Bookkeeping & Business Solutions
  • King Business Solutions
  • Accounting & Business Services.
e. Are There County or Province Regulations or Zoning Laws for Bookkeeping Services in Canada?

No, there are no provincial regulations or zoning laws for bookkeeping services businesses. Players in this industry are expected to work with the existing regulations governing similar businesses in the county or state where their business is domiciled.

f. Is There a Franchise for the Bookkeeping services business?

Yes, there are franchise opportunities for the bookkeeping services business, and here are some of them;

  • Succentrix Business Advisors
  • Toro Taxes
  • H&R Block
  • Padgett Business Services
  • Jackson Hewitt Tax Services
  • Daniel Ahart Tax Service ™.
g. What Do You Need to Start a Bookkeeping Services Business in Canada?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Office Space
  • Computers, Laptops, and Servers
  • Goods and Services Tax/ Harmonized Sales Tax (GST/HST)
  • A Corporate Bank Account
  • Software Apps
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a bookkeeping business in Canada are;

Creative Bookkeeping Business Name ideas
  • Andrew Mackson© Bookkeeping Services, Inc.
  • Thomas Lindsay® Bookkeeping Services, Ltd.
  • Boynton Beach© Bookkeeping Services, Inc.
  • Matt Phills® Bookkeeping Services, Inc.
  • MK Greenwood™ Bookkeeping Services, Inc.
  • Wesley Chapel™ Bookkeeping Services, Ltd.
  • Doral Lauderhill© Bookkeeping Services, Ltd
  • Poinciana Leo® Bookkeeping Services, Inc.
  • Hilary Jorgen© Bookkeeping Services, Inc.
  • Kelly Gibson© Bookkeeping Services, Inc.
  • Mike Kester® Bookkeeping Services, Inc.
  • Union Group® Bookkeeping Services, Inc.
  • TM Morris® Bookkeeping Services, Inc.
  • Sanford Wellington® Bookkeeping Services, Inc.
  • Nathan Fred® Bookkeeping Services, Inc.
  • Rowland Hyden© Bookkeeping Services, Inc.
  • Clem Weston™ Bookkeeping Services, LLC
  • Entrée Group® Bookkeeping Services, Inc.
  • West Prestigious® Bookkeeping Services, Inc.
  • Next Group™ Bookkeeping Services, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Bookkeeping Services Business in Canada?

You have four business structures when it comes to creating a bookkeeping service in Canada, but the corporation is the one that most people in this industry prefer. A corporation has limited liability—the owners are not liable for the debts or liabilities of the business.

Obtaining funding from investors or financial organizations is simpler. Additionally, it is necessary to be incorporated in order to transact business with governments or other companies, and business income can be distributed in the form of dividends or salaries, allowing you to minimize your tax liability.

Please note that all Canadian businesses must register their names in their respective provinces or territories, with the exception of sole proprietorships that use only the owner’s legal name without any additions (except in Newfoundland and Labrador, where neither partnerships nor sole proprietorships are required to register their names).

b. Steps to Form a Corporation in Canada
  • Whether it is a federal or provincial/territorial incorporation, register your business.
  • Contact the Canada Revenue Agency to open a corporate income tax account and obtain a federal business number.
  • In other Canadian jurisdictions where you want to conduct business, register as an extra-provincial or extra-territorial corporation.
c. What Type of License is Needed to Open a Bookkeeping Services in Canada?
  • General Business License
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
d. What Type of Certification is Needed to Open a Bookkeeping Services in Canada?
  • CPB certification.
e. What Documents are Needed to Open a Bookkeeping Services in Canada?

These are some of the basic legal documents that you are expected to have in place if you want to legally run a bookkeeping service in Canada;

  • Goods and Services Tax/Harmonized Sales Tax (GST/HST)
  • Council Permit
  • Business and liability insurance
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
f. Do You Need a Trademark, Copyright, or Patent?

If you have plans to start a bookkeeping services business in Canada, you probably won’t need to file for trademark protection or intellectual property protection. This is true because the nature of the business makes it possible for you to run the company successfully without needing to take legal action against anyone who uses your intellectual property without your permission.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Bookkeeping Services Business in Canada?

The startup fees for a bookkeeping services business could be anywhere from $5,000 to over $150,000.

b. What are the Costs Involved in Starting a Bookkeeping Business in Canada
  • The total fee for registering the business in Canada – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $8,300.
  • Marketing promotion expenses for the grand opening of the bookkeeping services business – $3,580.
  • The total cost for the purchase of insurance coverage – $4,400.
  • The cost of renting or leasing office space – $45,000.
  • Other start-up expenses like, commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
  • Operational cost for the first 3 months (salaries of employees, payments of bills and software renewal fees et al) – $35,000
  • The cost for the purchase of software apps: $5,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $1,750
  • The cost of launching a website: $2000
  • Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Bookkeeping Services Business in Canada?
  • The size of the bookkeeping service
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The additional services offerings
  • The cost of branding, promotion, and marketing of the bookkeeping service
  • The cost of furnishing and equipping the bookkeeping facility
  • The cost of the insurance policy covers
  • The cost of registering the business
  • The cost of recruiting and training your staff
  • The cost of the purchase and customizing of uniforms.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

Your bookkeeping services company can be run from a leased or rented office space or a home office, so you don’t need to build a facility to house it.

e. What are the Ongoing Expenses of a Bookkeeping Services Business?
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Rent
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (Chief Investigator) – $45,000 Per Year
  • Human Resources and Admin Manager – $36,000 Per Year
  • Bookkeeper and Payroll Administrator – $36,000 Per Year
  • Accountant – $32,000 Per Year
  • Marketing Sales Officer – $32,000 Per Year
  • Client Service Executive (Help Desk Office) -$28,000 Per Year
g. How Do You Get Funding to Start a Bookkeeping Services Business in Canada
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Shavonne Peterson© Bookkeeping Services, Inc. is a registered and licensed bookkeeping services business. The company will have its headquarters in Ottawa, Ontario. We have been fortunate to obtain office space in a prime location in one of the city’s busiest commercial districts. Our aim is to provide our cherished clients with affordable, dependable, quick, and courteous service.

Our client’s best interests always come first at Shavonne Peterson© Bookkeeping Services, Inc., and our values and code of conduct serve as the foundation of everything we do. We will make sure to work with experts who have a lot of experience with a variety of bookkeeping services.

b. Products and Service
  • Full-service payroll services
  • Payroll services sold separately
  • Billing services
  • Bookkeeping and compilation services
  • General accounting services
  • Tax planning and consulting services
  • Tax preparation and representation services
  • Other financial consulting and advisory-related services
a. Mission Statement

Our mission is to assist start-ups, corporations, and non-profit organizations organize their finances by offering competent, dependable, and trustworthy bookkeeping and payroll services. We will position the company to take the top spot in the bookkeeping and payroll services market in Ottawa, Ontario.

Vision Statement

Our vision is to build a bookkeeping services business that will become the number one choice for individuals, families, and corporate clients in Ottawa, Ontario.

d. Goals and Objectives

The goals and objectives of the bookkeeping services business are to help individuals and small businesses handle their accounting and tax-related issues.

e. Organizational Structure
  • Chief Executive Officer (Chief Investigator)
  • Human Resources and Admin Manager
  • Bookkeeping Administrator
  • Accountant
  • Marketing Sales Officer
  • Client Service Executive (Help Desk Office)

Marketing Plan

a. SWOT Analysis
Strength:
  • Effective structure in place
  • Highly experienced and qualified employees and management
  • Reliable software app
  • Support from relevant organizations
  • Water-tight strategies on how to expand beyond the major markets.
Weakness:
  • Financial Constraints
  • The new business will be competing with well-established bookkeeping services businesses
  • Inability to retain our highly experienced and qualified employees longer than we want
Opportunities:
  • Partnerships and mergers between established companies.
  • Good support structure for bookkeeping services businesses in Canada.
Threat:
  • The arrival of a new bookkeeping services business within our market space
  • Unfavorable government policy and regulations
  • Differences in management and culture are the biggest barriers to integrating bookkeeping services into traditional companies
  • Liability problems
  • Continuously changing consumer demands especially as it relates to how they expect bookkeeping services businesses to serve them.
b. How Do Bookkeeping Services Businesses Make Money?

Bookkeeping services businesses make money by charging clients for services such as;

  • Full-service payroll services
  • Payroll services sold separately
  • Billing services
  • Bookkeeping and compilation services
  • General accounting services
  • Tax planning and consulting services
  • Tax preparation and representation services
  • Other financial consulting and advisory-related services
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your bookkeeping services business and the services your offer by sending introductory letters alongside your brochure to corporate organizations, small business owners, and other key stakeholders throughout the city where your bookkeeping services business is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Advertise your business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

Generally speaking, the cost may differ depending on whether the bookkeeper is employed internally or externally. Growthforce estimates that part-time in-house bookkeeping rates normally average around $2450 per month but can range from $400 on the low end to over $4500 on the high end.

b. How Much Profit Do Bookkeeping Services Business Owners Make a Year in Canada?

A typical bookkeeping services business owner in Canada will make between $40,000 to over $80,000 per year in profit.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the bookkeeping service
  • The location of the bookkeeping service
  • The management style of the bookkeeping service
  • The business approach of the bookkeeping services business
  • The advertising and marketing strategies adopted by the bookkeeping services business
  • The number of years the bookkeeping service is in business
d. What is the Profit Margin of a Bookkeeping Services Business?

The profit margin of a bookkeeping services business is not fixed; to a large extent, it will depend on some factors that are unique to the type of service offerings. It could range between 20 percent to 55 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a bookkeeping services business. It is based on the location of the business and other factors as it relates to such startups in Canada;

  • First Fiscal Year (FY1): $250,000
  • Second Fiscal Year (FY2): $380,000
  • Third Fiscal Year (FY3): $400,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for Bookkeeping Services Business in Canada?
  • The demography of the location
  • The demand for the services of bookkeepers in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of bookkeeping services businesses in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What City is Best to Open a Bookkeeping Services Business in Canada?
  • Toronto, Ontario
  • Montreal, Quebec
  • Calgary, Alberta
  • Ottawa, Ontario
  • Edmonton, Alberta
  • Winnipeg, Manitoba
  • Mississauga, Ontario
  • Vancouver, British Columbia
  • Kitchener, Ontario
  • Hamilton, Ontario.
c. What Equipment is Needed to Operate a Bookkeeping Services Business?

You should be prepared to purchase software applications, computers/laptops, internet facility, telephone, fax machines, and office furniture (chairs, tables, and shelves) amongst others, and all these can be gotten as fairly used.

  1. Hire Employees

When it comes to hiring employees for a standard bookkeeping services business, you should make plans to hire a competent Chief Executive Officer (Chief Investigator), Human Resources and Admin Manager, Account Manager, Marketing and Sales Officer, bookkeeping administrator, and Client Service Executive (Help Desk).

  1. Launch the Business Proper

Nowadays, no bookkeeping services company opens its doors for business without first organizing an opening celebration to formally launch the business. A quiet launch party rather than a big opening party can be the better option if you have a tight budget.

a. What Makes a Bookkeeping Services Business Successful?
  • Ability to identify good deals
  • Willingness to take chances
  • Tenacity
  • Customer-centric business approach
  • Good marketing and sales approach
  • Strong vision
  • Passionate leadership
b. What Happens During a Typical Day at a Bookkeeping Services Business?
  • The office is open for the day’s work
  • The job for the day is reviewed
  • Employees go straight to their job description (working with clients to handle their books and tax-related issues)
  • Marketers go all out to market the service offerings of the company
  • Reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Bookkeeping Services Business?
  • Excellent Accounting and Bookkeeping Skills
  • Excellent investigative skills
  • Excellent marketing skills
  • Excellent computer skills
  • Ability to Pay Attention to Details
  • Good managerial and human development skills
  • Visionary Leadership
  • Excellent communication and negotiation skills
  • Organizational skills
  • Problem-solving ability
  • Good Supervisory skills
  • Experience in managing bookkeeping services business
  • Experience in business administration
  • Experience in handling accounting and bookkeeping software and other relevant software.