According to the Small Business Administration in the U.S., there are 28.2 million small businesses (2011 data).   Nearly 80 percent of these businesses do not have any employees, and over 50 percent are home-based.  The bottom line of all these numbers is that a huge number of small businesses are really small, earning under $1 million in annual revenue, and many earning under $100,000.

While the vast majority of small businesses have very little revenue, they all still need accounting, tax, and financial skills to run their businesses.  And the good news is the vast majority of accounting firms don’t like to bother with these very small businesses, which means less competition for you.

Safety in Numbers

Serving these businesses well is a numbers game, and accountants are good at numbers.  There are a huge number of these small businesses, so the accountant who properly packages their services to meet the needs of these clients wins big time.   Here are three tips to consider:

1.  The KISS Principle

It can be counter-intuitive for smart people to dumb things down, but it’s going to be important to keep things really simple for the small business owner so that it can be affordable.  One example is even if a small business client has a fairly simple inventory, it might not be necessary to keep inventory records in real time.  It might be much cheaper to just make adjusting entries a few times a year.

The KISS (“keep it simple, Sam”) principle is a compromise that will help small business owners get the help they need without making their recordkeeping overly time-consuming or complicated.

2.  A Dose of Literacy, a Tad of Training

Small business owners need a healthy dose of financial literacy to help them understand their numbers.  Education should be a part of the services you provide small business clients.  Clients also need training on their accounting system and so they can keep their books up to date.

3.  There’s a Line

The top priority of a small business owner is rarely to have the perfect accounting system, and accountants need to understand that.  Owners need to focus on keeping their cash flow positive and attracting customers and sales.   When accountants can be sensitive to that pecking order, they will be able to better serve these clients without losing patience or getting frustrated.

Find a way to work these small business clients into your practice, and you will be tapping a huge market opportunity.