[IMGCAP(1)]Launching a payroll practice does not have to be overwhelming, in fact if the right business model is adopted, starting a payroll venture can happen faster than one might think and with far less stress.
My second part of this series offers deeper insights into how to manage, market, and sell payroll services—based on a proven and tested business model (read: Wake Up and Smell the Payroll Part I).
Managing a Payroll Business
If you own a practice or serve as an executive level manager within a firm, you already have the foundation to manage a payroll business. Experience in relation to payroll adoption, however, is not the issue. The real issue is that many practitioners are still serving as a technician’—working in their practice instead of working on their business. With this in mind, the first course of action is to create a plan that will help you shift from technician responsibilities into an entrepreneur role and the tasks that come with driving business growth.
At the core of this plan is to view payroll as a long-term business opportunity, not just a new income stream. Starting with this approach is important because it requires you to plan for and invest in a new business, rather than just a new service line.
Your plan must include all the elements required for managing a full-on business, including:
- Define Your Full Service Line—Identify all the services you will offer along with payroll, including human resources, time tracking tools, employee background checks, etc.
- Build the Proper Staff—Put the right people on the bus, in the right seats. That is, take the time to hire a skilled, technically proficient team that can independently operate a payroll operation (these should not be the same employees working in your accounting firm). The right staff will run operations, allowing you to focus on strategy. The right staff will also allow you to delegate tasks appropriately, relieving you of the day-to-day work. Delegating to your staff is key!
- Invest in Office Space—Your payroll business is a separate venture, so identify a separate space (in your current office or a new location) to support a standalone business.
- Invest in the Right Technology—Build an internal technology system to support an efficient payroll practice. This software system is often different from what’s in your firm.
- Map Out a Plan to Re-invest—Identify how you will re-invest initial revenues to build your business after launch. The first few years will require that you re-invest profits to build your brand. Earmark some of this money for your marketing efforts.
In the first year, as with any new business, management is critical and will require focus and dedication. As part of your business plan, your main goal is to establish a clear vision on all the elements listed above.
Marketing & Branding Your Payroll Business
Marketing and branding are absolutely a must to build your payroll business. Clients want to partner with a trusted business source your brand image should “say” this to clients. Marketing your business, or rather, communicating what it is you do and why your business is the premium choice above other vendors, is a big part of building your brand.
Marketing and branding represents the creative side of your business plan, so be sure to put ample thought and planning into it. Do not underestimate the power of marketing. Remember, if you don’t tell people about your services, how will they know to come to you? This is marketing!
Because this is important to the overall plan, take some time to access your marketing and branding skills. If you are like most accountants, this is not an area of strength. If this is true of you as well, consider bringing in a marketing consultant to help with cultivating your messaging and developing your materials. Remember, you have to re-invest to grow, and marketing is well worth the investment.
Part of your initial marketing and branding plan should include:
- Pick a Strong Name—Make sure people know what you do by your name. Having the word “payroll” in the name is a good start.
- Develop an Attractive, Effective Logo—Your logo is the graphic representation of your brand and the image that people will associate with your name so make sure it represents who you are.
- Network—Identify networking channels within which to promote your services.
- Build a Powerful Web Presence—Your website is the “new front door” to your practice. This is where people search for just about any service or product, so make sure your web presence is strong.
Marketing and branding, if done correctly, can earn your business some major recognition. Marketing and branding efforts also provide the foundation from which your sales and business development will be built.
Selling Your Services
The word sales’ can be intimidating for some, but if you have a first-rate service, it shouldn’t be. Sales are a required function to grow a business, so whether you lead sales efforts or have a staff, sales is an important part of the formula. Having a dedicated business development employee on board is recommended. This person will be solely focused on sales, building referral channels, and developing relationships broadly. This person should have the skill level to nurture a prospect through the sales funnel and close opportunities
It should also be noted that selling payroll services today is not nearly as hard as it used to be. With expanding regulations and changing tax and labor laws, more companies are handing over payroll. The mere complexity of payroll processing is the single most effective selling tactic. Professional payroll service vendors relieve businesses of time-consuming, complex payroll work and ensure peace of mind that payroll is in the hands of experienced professionals. Many payroll providers are finding that selling payroll is not that hard because companies are eager to get rid of the headaches associated with payroll.
Payroll represents a huge and lucrative opportunity for entrepreneurs. Managing, marketing, and selling a payroll business have gotten much easier, especially if you follow the tips in this article. Set up your payroll company for success from the start—build the right staff and technology solution, have the right marketing elements in place, and focus on the value of handing over payroll tasks in your sales pitch. Getting into payroll is a smart move, and it’s easier than ever.
Sean Manning, CPA, is owner of Manning & Company, a full-service CPA firm, and Payroll Vault, a full-service payroll company. He has dedicated the past several years to building and perfecting a sustainable, profitable payroll services model. He is a nationally recognized speaker on the topic of payroll services and building a successful business model. Sean can be reached at firstname.lastname@example.org.