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32 June/July 2015 • www.CPAPracticeAdvisor.com A YEAR IN THE LIFE: PAYROLL ACCOUNTANT Where's Your Business Plan? by Taija Jenkins As a payroll practitioner, you recognize this and that's why you are in business – to provide a service that is crucial to the business, but ofen overlooked and/or dreaded by business owners. However, both you and your clients may sometimes overlook a key component to both businesses. W hether you've already started your practice or are still trying to f ig u re out how to get sta r ted, you' l l need one important thing to guide you – a solid business plan. A business plan will help you efectively com - municate your value to potential clients and staf as you start and grow your practice. A good business plan lays out the goals for your practice and your plans for achieving them. It will take into consider- ation the demographics of your target clients, your frm's profle, services ofered and other logistics. Before you begin drafing your business plan, take some time to assess your payroll practice. How will you defne your business and set it apart from your competitors? Consider the ser vices that you will ofer – full or partial payroll services – and how you will package them for your clients. Defne your ideal client: what industry are they in; the size of their business; their pain points and passions. Outline your costs and pricing structure. How will you sell and market your services? Decide who will see your business plan. Do you need investors to start your payroll business? Is this plan just for the founders and partners? How will you share it with the rest of your practice – in its entirety or as support documents? Once you're ready, you can begin tack ling the main sections of the plan. Each business plan should contain the following sections: • Executive Summary. Te executive summary will provide a high-level overview of your payroll practice, outlining company goals. • Business Description. Tis is the biography of your practice. Share when and why it was formed. In detail, explain what payroll services your practice will provide, as well as your frm's mission statement. Be sure to include those things that diferentiate you from other payroll providers. • Market Analysis. In order to know how to efectively sell your payroll services, you need to have an under- standing of your market. What industries are you tar- geting? Are there other payroll providers there? Determine the strengths and weaknesses of your competitors and identify where there are untapped opportunities. • Design and Development Plan. Fully layout your plans for providing services to clients. Describe what these services will look like, what payroll sofware you will use. How will you roll out your services to new clients or expand services for existing clients? How much of your payroll practice will be in the cloud. Outline what this means for clients in terms of transi- tioning if they are not already there. • Operations and Management Plan. It's important to map out how your business will run on a day-to-day business. Identif y the key staff member roles and responsibilities for each. Outlining this now will save you time when creating job descriptions for recruiting and hiring. It will also give you a clear picture of what you will need to run payroll for your clients to make sure you have the right sofware in place. • Financial Factors. If you're seeking funding to start your practice, they are going to want to see monthly and/or quarterly fnancial projections for the frst few years. You should consider both busy times and down times, as well as any known major payroll issues that can afect your cash fow. Now that you've laid out the basics, it's time to f inalize and st yle your plan. It should be clean, simple and easy-to-read. Choose language that's easily comprehendible and a font st yle and size that's legible. Make sure you proofread for spelling and grammatical errors multiple times. Te fnal draf should be approximately 30 pages. Tis will require some editing and fne-tuning. Be sure to include a table of contents and section headers. Graphics and images will break up text and make the plan more readable. Once the plan has been fnalized and put into place, plan to review it annually with your partners. Use it as a benchmark to make sure your practice is on track for meeting the goals you set. Te business plan is a good g uide for ma k ing sure that your day-to-day business is lining up with your practice's mission. It will help you measure if your practice is merely providing payroll ser vices or on target to provide meaning ful and valuable payroll services. M any business owners and entrepreneurs start a business because they have a service or product they want to sell to others. Tey don't do it to focus on the backend pro- cesses, such as payroll.