Looking for a bookkeeping business plan? You're in the right place.
A bookkeeping firm lives or dies on a few numbers that other small businesses never track: how many clients one bookkeeper can carry, how many of them leave each month, and what it costs to win a replacement. A lender or a partner will ask about all three. How much do you need to open? How many clients does it take before the firm pays its people? What happens if clients leave faster than you planned?
In this article we'll walk through a complete sample business plan for a bookkeeping-only firm in Austin, Texas, section by section. We'll cover the executive summary, the SWOT analysis and the Texas rules that shape the model, and finish with all of the financials.
Here's what you'll take away:
- The executive summary: see how to describe a firm that stops short of tax work, so a lender reads the limit as a decision
- The SWOT analysis: put a one-person start and a loss-making first year on the page without losing the reader
- Capacity and unit economics: work out how many clients a bookkeeper can carry, and time each hire to the client count instead of to hope
- Churn and onboarding: see what a 2% monthly loss of clients does to growth, and how set-up and catch-up fees help pay for winning them
- The Texas section: check what to say about franchise tax, sales tax on data processing and the words a non-CPA firm should avoid
- The five-year profit, cash flow and balance sheet: follow each hire and price change into the numbers a bank will test
- The downside case: have an answer ready for the "what if revenue is 20% short?" question, with the steps the owner takes in response
If you're planning a bookkeeping firm, read this before you write your own. The firm is fictional, so take what fits yours and change the rest.
In this plan
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The Business in Brief
Clarity Books opens in Austin, Texas on 1 January 2027 and keeps small businesses' books for a monthly fee. Payroll runs, bill pay and management reports can be added on top. Nothing it produces needs a CPA's signature, and it files no tax returns. A client who wants either is handed to an independent CPA, and Clarity Books takes no commission for the introduction. Maria Santos owns the whole company.
Opening takes $175,000: $120,000 from Maria's savings and a $55,000 bank term loan. About $144,500 of it pays wages and absorbs surprises until the client list covers the team. Equipment and fit-out take $14,000, and legal work, licences and the launch campaign take $16,500.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $275,750 | $517,646 | $756,356 |
| Net income after start-up costs | ($80,399) | $14,343 | $57,490 |
| Closing cash | $70,709 | $72,605 | $96,659 |
Twelve clients have signed engagement letters before the doors open. By December 2027 there are 50, and by the end of Year 5 there are 154. One bookkeeper can look after about 22 of them, so payroll tracks the client count closely. The count also leaks: the model has 2% of clients leaving every month, 21.5% across a year, and each year's selling goes first on replacing them.
Losses in 2027 come from timing. Three bookkeepers are hired before enough fees arrive to pay for them. Monthly operating profit appears in October, and 2028 is the first profitable year at a 4.1% margin before interest, depreciation and tax.
The model also runs a harsher version of the story. With revenue 20% under plan, Maria hires later, spends less on marketing, takes a pay cut, stays in the first office and pays herself no distributions, and cash still stays above zero in all five years. Take those steps away and the money is gone during Year 2.
Clarity Books is deliberately narrow. Each client gets one named bookkeeper, the month closes by the 10th of the next, and the fee stays the same every month. Anything that needs tax advice goes to someone licensed to give it.
How Clarity Books Is Set Up
Company: Clarity Books, LLC, formed in Texas. Maria Santos holds 100%. Where: 800 square feet of rented office in Austin, used on a hybrid rota with shared desks. Opens: 1 January 2027. Where things stand: the lease and website are in draft, and 12 clients have signed.
Why it exists
Small-business owners in Austin get books that are current every month, for a fee they can plan around.
Five-year targets
- 50 clients by December 2027, from 12 at opening.
- A profit after interest in 2028.
- Every bookkeeper at about 22 clients or fewer, with the team's load under 95% of available client hours.
- Owner distributions starting in 2029, from spare cash only.
- 154 clients, nine full-time staff and a part-time coordinator by the end of Year 5.
Services and what each earns
| Service | How it is priced | Year 1 share of revenue |
|---|---|---|
| Monthly bookkeeping, reconciliations and a month-end report | $300 to $1,100 a month by volume and complexity; $545 average | 77% |
| Add-ons: payroll runs, bill pay, management reports | About $130 a month; 35% of clients take one | 6% |
| Onboarding: $300 set-up and catch-up bookkeeping | $300 plus an average of $1,200 for the 60% of new clients who are behind | 16% |
Where the firm stops
No tax returns, no signed financial statements, no audit or review work and no tax advice. Referring these out removes the February-to-April crunch of a tax practice, and the extra licensing along with it.
Licensing and the words the firm can use
The Texas State Board of Public Accountancy publishes guidance for consumers on who may offer accounting services. Its page lists offering "accounting services" or "audit services" to the public without a licence as unauthorised practice, and says using terms such as "accounting," "auditing" or "accountant" to suggest a licence counts as practising public accountancy. Maria is not a CPA. Everything the firm publishes calls the work bookkeeping, and the firm's name and client-facing descriptions avoid those words. A Texas lawyer reads the website and the engagement letter before launch, and the fee is in the legal budget.
The Austin Market for Outsourced Books
How many businesses there are
About 3.5 million small businesses operated in Texas in 2022, according to the Texas Comptroller. That is 99.8% of the state's businesses, with about 44% of the workforce, and the number grew 24% between 2017 and 2022. The count takes in the smallest operations. Clarity Books targets a narrower slice: owner-run businesses with enough monthly transactions to need reconciled books, many of them running a payroll.
What a bookkeeper costs and where the job is going
The Bureau of Labor Statistics reports median pay of $50,670 a year for bookkeeping, accounting and auditing clerks in May 2025. It projects the occupation to shrink 6% between 2025 and 2035, roughly 85,600 fewer jobs, as software absorbs data entry. Clarity Books is built around that shift. Software captures receipts and matches bank feeds; the staff reconcile, review and explain. Bookkeepers are paid $55,000, above the national median, because review skill is what the firm hires for and Austin employers compete for it.
Fee levels
No primary source for small-business bookkeeping fees turned up. The price list is the firm's own. Tiers follow transaction volume, the number of bank and card accounts, and whether the client runs payroll.
Who else offers this
| Alternative | What it offers | Why a client picks it | How Clarity Books differs by design |
|---|---|---|---|
| Doing it in-house with cloud software | Owner or office manager keeps the books | No extra fee | Books are reconciled monthly by someone whose only job is bookkeeping |
| Freelance bookkeepers | Flexible, often hourly | Low cost, personal relationship | A team covers leave and a reviewer checks each close |
| Remote bookkeeping platforms | Fixed-price plans, large teams | Price and speed of sign-up | A named bookkeeper in the same city and a local office for meetings |
| Local CPA firms that also keep books | Bookkeeping alongside tax | One firm for everything | Bookkeeping is the whole business and not a feeder for tax work |
Categories only, with no ranking. Providers publish and change their own prices, so none are quoted.
Strengths, weaknesses, opportunities, threats
| Strengths | Weaknesses |
|---|---|
| A decade of bookkeeping practice behind the founder | One senior person at launch; review depends on a freelance reviewer until month 21 |
| Flat monthly fee that is easy to buy and to budget | No brand yet; every client starts from zero |
| 12 signed clients before opening | The first year loses money and draws on the funding |
| Opportunities | Threats |
|---|---|
| Business owners who want a local team rather than a remote one | Software automating routine work and pressing fees down |
| Referral partners: CPAs who do not want bookkeeping, bankers, realtors, coworking managers | Fixed-price remote platforms discounting to win small clients |
| Add-on work as clients grow | A bookkeeper leaving with a client list to hand over; costed in the section on running the work |
Who Buys Monthly Bookkeeping
The typical buyer owns a landscaping company, an HVAC contractor, a restaurant, a design studio, an online shop or a dental practice. They are skilled at the trade and weak on paperwork, and they usually learn the books are months behind when a lender, an investor or a tax preparer asks to see them.
Before Clarity Books the books live in a spreadsheet, in software the owner set up alone, or with a part-time bookkeeper. The usual failure sits between a bank feed that has been categorised and one that has been reconciled and reviewed.
The trigger to change is a bank asking for statements, a tax preparer returning an incomplete file, a cash shortage nobody saw coming, or a bookkeeper walking out.
What keeps a client is the add-ons. Payroll and bill pay tie the firm into the week as well as the month, so those clients stay longest. Even so, the model has 2% leaving each month, because small businesses close, change hands or take bookkeeping in-house for reasons outside the firm's control.
Priorities, in the buyer's own order: correct books, delivered on time, at a fee that does not move, from one person they can phone.
Winning and Keeping Clients
The first twelve
Twelve clients signed engagement letters before launch. Eight come from freelance bookkeeping Maria did on evenings and weekends over the past two years, with her employers' written agreement, and four from introductions by two bankers and a realtor. None is a client of a firm she worked for. A lawyer has reviewed the non-solicitation terms in her last employment contract, and she will not approach those firms' clients. Were that advice to change, the firm would open with fewer clients and Year 1 revenue would fall by whatever the missing ones were paying.
From discovery call to signed letter
Maria takes every first call herself in Year 1: a 30-minute conversation, a fixed-fee proposal within two working days, then the engagement letter and a kick-off call in the first week. Year 1 needs about 45 gross new clients from roughly 129 calls, a 35% close rate and about two and a half calls a week.
| Lead source | Gross new clients | Share |
|---|---|---|
| Referral partners | 18 | 40% |
| Google Ads and local search | 11 | 24% |
| Website and content | 7 | 16% |
| Networking and chamber events | 5 | 11% |
| Existing clients' referrals | 4 | 9% |
Tiers and fees
Three tiers follow monthly transaction volume and complexity. A business with one bank account and few transactions pays about $300. The middle tier is about $500. A business with payroll, several accounts and inventory pays up to $1,100. The $545 average comes from most clients sitting in the middle with a minority at the top. Fees hold steady through 2027 and then rise 2.5% a year.
Set-up and catch-up fees
A new client pays $300 to be set up. About 60% also need catch-up work on months of unreconciled books, quoted as a fixed fee averaging $1,200. Together that is $1,000 of onboarding revenue per gross new client for about 10 hours of work, or roughly $100 an hour. The 12 opening clients are moved across free of charge.
What a client is worth
At 2% a month, a client stays 50 months on average. Subscription and add-ons bill about $590 a month, so a client's life is worth about $29,500 of billing before price rises. That is revenue. Direct costs take 5% of recurring revenue, and the bookkeeper time spent serving the client (5.4 hours a month at about $50 an hour loaded) takes most of the rest. A client contributes about $292 a month, 49% of billing, and about $14,600 over 50 months. Against the Year 1 marketing cost of about $777 per new client, that is about 19 times the cost of winning the client. Maria's time, reviewers and overheads sit outside that calculation.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Clients at year end | 50 | 78 | 108 | 134 | 154 |
| Gross new clients | 45 | 44 | 53 | 55 | 55 |
| Clients lost | 7 | 16 | 23 | 29 | 35 |
New signings hold at 44 to 55 a year while departures rise from 7 to 35, which explains the slowing growth. Churn is the sensitive input. At 3% a month with the same sales, Year 5 would end with about 124 clients and not 154. That figure is a recalculation outside the financial model, using the same new-client numbers.
Marketing: Spend and Channels
Marketing costs $35,000 in Year 1, made up of $11,000 for the launch (paid out of the opening funds) and $24,000 of running spend. It equals 13% of Year 1 revenue and falls to 5% by Year 3 and 4% by Year 5. Divided across 45 gross new clients, that is about $777 each, or roughly 1.3 months of the $590 a client is billed. Later years land between $720 and $805 per new client at a similar volume of sales.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website, brand and referral-partner pack (launch) | $11,000 | A clear site with pages by trade and a booking link for discovery calls |
| Referral partner programme | $6,000 | Meetings with CPAs who prefer not to keep books, bankers, realtors and coworking managers; about 18 clients, or $333 each |
| Google Ads and local search | $7,500 | Searches such as "bookkeeper Austin" and "small business bookkeeping"; about 11 clients, or $682 each |
| Guides and website content | $3,500 | One practical guide a month on catch-up work, month-end close and payroll set-up; about 7 clients |
| Networking and chamber memberships | $3,000 | Local business events and a membership; about 5 clients |
| Client referral credits | $2,000 | A month's fee credit for each introduction that signs; about 4 clients |
| Email and client newsletter | $2,000 | Monthly reminders that keep clients and prompt introductions |
Dates to hit in 2027:
- January: website live, 15 clients on the books.
- April: 24 clients, and the first referral partner sends a second introduction.
- June: 31 clients, with the second bookkeeper already hired.
- September: 41 clients, with EBITDA within $8 of break-even.
- December: 50 clients and about $29,500 of monthly subscription and add-on revenue.
How the Work Gets Done
The office
Clarity Books rents 800 square feet in Austin at about $33 a square foot a year including service charges, which is $26,400 in Year 1. The lease runs three years with a personal guarantee. Staff come in on a hybrid rota and share desks. In Year 4 the firm moves to roughly 1,100 square feet.
The monthly close
Each client has a checklist. Feeds from banks and cards are categorised through the month. Reconciliation is finished by the fifth business day, a reviewer checks the close, and the owner gets a short report by the 10th. For add-on clients, payroll runs and bill payments follow the same calendar.
Hours, clients and cost per bookkeeper
Capacity is counted in hours. A client takes 5.4 hours a month on average: 4.8 for the monthly work and 0.6 for add-ons. That figure relies on bank feeds and receipt capture doing most of the data entry for businesses with 100 to 150 monthly transactions, leaving the hours for reconciliation, review, client questions and the report. A bookkeeper has about 1,650 working hours a year after leave, holidays and internal meetings, and 85% go to client work. That is 1,402 hours, or about 22 clients. At that load a bookkeeper brings in about $153,000 a year against a loaded cost of $69,850, which is 46%.
Revenue per client hour is $109. This is a price per client and not an hourly rate, and the margin hangs on it. If the same fees earned only $95 per client hour (6.2 hours per client), the firm would need a ninth bookkeeping hire, Year 5 EBITDA would drop from 18.0% to 9.1%, and cash would go negative in Years 2 to 5 on this funding.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Clients at year end | 50 | 78 | 108 | 134 | 154 |
| Bookkeepers and seniors (excluding Maria) | 3 | 4 | 6 | 7 | 8 |
| Clients per bookkeeper or senior | 16.7 | 19.5 | 18.0 | 19.1 | 19.3 |
| Team load at year end (client hours needed as a share of hours available) | 75% | 88% | 83% | 89% | 92% |
Ratios below 22 follow from three things. Maria carries clients herself, 115 hours a month at the start and 30 by Year 3. Seniors carry about three-quarters of a bookkeeper's load because they also review. The part-time coordinator takes over onboarding. A hire goes in the month team load would pass 95% of available client hours. In month 1 Maria works alone at about 100% of her 115 client hours.
If a bookkeeper leaves
Staff turnover is not in the model, though the risk is real. Say a bookkeeper at a full load of 22 clients resigns and a replacement takes about three months to recruit, hire and train. Roughly 350 client hours land on the rest of the team and a freelance contractor at $50 an hour for all of them. That costs $17,500, plus $5,000 to recruit. The total of about $22,500 is roughly a third of Year 3 EBITDA of $65,254.
Tools
Cloud accounting software, receipt capture, bill-pay and payroll tools, a practice-management system that tracks every close date, a password manager with multi-factor authentication on every login, and a secure portal for client documents. Software costs $9,000 in Year 1 and $22,500 by Year 5.
Hiring order
Year 1 ends with Maria and three bookkeepers. Year 2 adds a senior bookkeeper who reviews closes and a part-time onboarding coordinator. Year 3 brings two more bookkeepers, Year 4 a sixth bookkeeper and Year 5 a second senior. The revenue-shortfall case shows which of these slip or drop. Each full-time hire is budgeted at $5,000 to recruit, a blend of job boards and a 15% agency fee on first-year pay.
Texas rules that touch the firm
- Income and franchise tax. The Texas Comptroller states that Texas has no state income tax. The state's business tax is the franchise tax. For report years 2026 and 2027 the Comptroller lists a no-tax-due threshold of $2,650,000 of annualised revenue and a 0.75% rate for businesses that are not retail or wholesale. Revenue in this plan tops out at $1,192,317, so nothing is due, but the LLC still files an annual report by 15 May.
- Sales tax on data processing. The Comptroller's Taxable Services publication (January 2026) says a bookkeeper applying accounting knowledge to produce financial reports is not providing taxable data processing. It lists data entry, check preparation and accounts payable or receivable preparation as taxable, with 20% of the charge exempt. The engagement letter keeps judgment-based work apart from payroll runs and bill pay, and the firm confirms the treatment of its add-ons with the Comptroller's office before launch. Revenue here is shown net of any sales tax collected.
- Workers' compensation. The Texas Department of Insurance says private employers can choose to carry coverage and it is not required in most cases. The firm carries it, with the premium in the insurance line.
- Insurance. Errors and omissions, cyber, general liability, workers' compensation, a crime policy for employee dishonesty (staff can reach client bank accounts) and disability cover on Maria at $2,400 a year. The budget is $9,200 in Year 1 and $18,400 by Year 5.
- Client data. Engagement letters say who owns the books, how long files are kept and how access to bank feeds ends when a client leaves.
Vendors
Software vendors, an employment lawyer on call for hiring, and a recruiting agency for hard-to-fill roles. Any of them can be swapped.
Who Runs the Firm
Maria Santos spent ten years as a senior bookkeeper at regional CPA firms, reconciling and reviewing small clients' books ahead of their tax returns and training junior staff. She left to run a bookkeeping-only practice with a team sized to its clients. The $120,000 she is investing is savings from those years. She is not a CPA and does not sell anything that requires one.
What she has yet to do
Maria has never built a sales pipeline from scratch, hired for her own firm or run payroll for a team. A weekly referral schedule covers the first, an employment lawyer on call the second, and a payroll provider handles the firm's own staff.
Who checks Maria's work
Until the senior bookkeeper arrives in month 21, Maria and the first bookkeeper review each other's closes. A freelance reviewer, an experienced bookkeeper at four hours a month and $75 an hour ($3,600 a year, in professional fees), samples both. From month 21 the senior bookkeeper reviews every close.
If Maria is out
The freelance reviewer and the first bookkeeper keep the monthly cycle running, and disability cover of $2,400 a year is in the insurance budget. The first bookkeeper is trained on the close checklist, so no single person holds the cycle together.
Outside adviser
An independent CPA who receives the firm's tax referrals reviews the Year 1 numbers each quarter.
Ownership and the bank
Maria owns all of Clarity Books, LLC and gives the bank a personal guarantee. The loan requires quarterly accounts, and the bank may add a net-worth test. The revenue-shortfall case later in the plan shows that test would be close to tripping at the end of Year 1.
The Numbers Behind Clarity Books
The statements that follow all come out of a single five-year model, with Year 1 broken into months and the later years shown annually. The inputs are listed before the tables so each figure can be tied back to a stated reason. Payroll is placed below gross profit, since the bookkeepers are what the firm mostly spends its money on.
What it costs to open, and who pays
| Use of funds | Amount |
|---|---|
| Laptops, monitors, phones, document scanner | $8,500 |
| Office furniture and fit-out | $5,500 |
| Entity formation, business licences and bank set-up | $1,200 |
| Legal: engagement letter, data-handling terms, lease review | $4,300 |
| Launch: website, brand, referral-partner pack | $11,000 |
| Payroll runway until the client list covers the team | $90,000 |
| Contingency for slow referrals and lost clients | $54,500 |
| Total uses | $175,000 |
| Source of funds | Amount |
|---|---|
| Maria Santos's savings | $120,000 |
| Bank term loan | $55,000 |
| Total sources | $175,000 |
Maria puts in $120,000 of savings, 69% of the money raised, and the bank lends $55,000 over five years at 9.75%, with interest only for the first three months. The rate is a placeholder for this example and not a lender's quote. Equipment is worth $14,000, a quarter of the loan, so the bank is likely to lean on Maria's personal guarantee and a lien over all business assets, and to ask for extra security such as a lien on her home equity. A government-guaranteed loan would add a guarantee fee that the model leaves out. Two operating lines, $90,000 of payroll runway and $54,500 of contingency, are the biggest uses on purpose. In Year 1 operations absorb $83,202 of cash, including the $16,500 of start-up costs, since three bookkeepers are on the payroll ahead of the fees that will pay them. The contingency is sized so the 20% shortfall case below keeps both cash and equity positive.
What the figures rest on
- Subscriptions run from $300 to $1,100 a month depending on transaction volume, number of accounts and payroll complexity; most clients sit mid-range, and the blended average is $545. The firm opens with 12 signed clients and closes Year 1 with 50. Those totals already allow for 2% of clients leaving each month (21.5% a year), which means about 45 gross new clients are needed in Year 1.
- Add-ons cover payroll runs, bill pay and management reports. Roughly 35% of clients buy one at about $130 a month, so the average across every client is $45 a month, and a typical client bills about $590 a month in all.
- Each new client pays a $300 set-up fee. The 60% with books that are behind also buy catch-up work averaging $1,200. Onboarding therefore brings in $1,000 per gross new client and takes about 10 hours: 2 for set-up and roughly 13 of catch-up for the 60% who need it. The 12 opening clients are moved across without a fee.
- A client uses 5.4 hours of staff time a month: 4.8 on the monthly work and 0.6 on add-ons. That works out to about $109 of revenue per client hour, which is a price per client and not an hourly rate, and depends on bank feeds and receipt capture handling most of the data entry. If the fees earned only $95 per client hour (6.2 hours per client), a ninth bookkeeping hire would be needed, Year 5 EBITDA would slide from 18.0% to 9.1%, and cash would be negative in Years 2 to 5 on the same funding.
- Each bookkeeper has about 1,650 working hours a year once leave, holidays and internal meetings are taken out, and 85% of them go to clients: 1,402 hours, or about 22 clients. The 85% leaves room for sickness, training and handovers. Maria gives clients about 115 hours a month in months 1 and 2, 60 through month 12, 40 in Year 2 and 30 after that. A hire is made in the month team load would pass 95% of available client hours. Team load at the five year ends is 75%, 88%, 83%, 89% and 92%.
- Fees, add-ons and onboarding all rise 2.5% a year from Year 2. Year-end client numbers of 50, 78, 108, 134 and 154 combine with those increases to give the subscription line. New signings stay at roughly 44 to 55 a year, so the selling effort is flat while the client base builds.
- Direct costs average about 5.8% of revenue. They cover bank-debit and card fees, per-client receipt-capture and bill-pay seats (5% of recurring revenue), and contract overflow and software on catch-up projects (10% of onboarding revenue).
- Clients take about 7 days to pay. Subscriptions are collected by bank debit each month and settle within a few days, set-up fees are paid at signing, and add-ons and catch-up work are invoiced monthly on 15-day terms. Bad debt is allowed at $1,200 in Year 1, rising to $5,200 by Year 5.
- Employer on-costs add 27% to wages and cover payroll taxes including unemployment, a health contribution and a retirement match (15% for the part-time coordinator). Workers' compensation sits in the insurance line instead. The wages shown are launch rates. Bookkeepers at $55,000 are above the $50,670 national median for bookkeeping clerks in May 2025; no median for the Austin area was found. Pay raises of 3% a year are charged on a separate line from Year 2.
- Recruiting costs $5,000 per full-time hire, a mix of job boards and a 15% agency fee on first-year pay, plus $1,000 for the part-time coordinator. Three hires fall in Year 1, so $15,000.
- Year 1 insurance of $9,200 pays for errors and omissions, cyber, general liability, a crime policy, workers' compensation (which most private employers in Texas may choose to carry) and $2,400 of disability cover on Maria. Professional fees include a freelance reviewer at $75 an hour for 4 hours a month until the senior bookkeeper starts in month 21.
- The office is 800 square feet at about $33 a square foot a year, service charges included, and becomes 1,100 square feet at about $34 from Year 4. The team works a hybrid week at shared desks. Replacement laptops and kit for new hires are budgeted from Year 2.
- Texas levies no state income tax, so the model applies the 21% federal corporate rate and nothing at state level, carrying the Year 1 loss forward. An LLC would more usually pass profit through to Maria's own return, which makes 21% a cautious stand-in. Franchise tax is left out because none is due at or below $2,650,000 of revenue for the 2026 and 2027 report years, and revenue here never passes $1.2 million.
- Distributions to Maria of $20,000, $40,000 and $70,000 are made in Years 3 to 5, and only from cash the model shows is spare. The bank loan is paid down to zero by the end of Year 5.
Revenue by line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Monthly bookkeeping subscriptions | $213,095 | $436,845 | $647,600 | $859,816 | $1,045,543 |
| Add-ons: payroll runs, bill pay and management reports | $17,595 | $36,070 | $53,472 | $70,994 | $86,329 |
| Onboarding and catch-up bookkeeping | $45,060 | $44,731 | $55,284 | $59,552 | $60,445 |
| Total revenue | $275,750 | $517,646 | $756,356 | $990,362 | $1,192,317 |
| Growth on prior year | – | 88% | 46% | 31% | 20% |
Repeating subscriptions carry the business: 77% of Year 1 revenue and 88% of Year 5. Onboarding is 16% of Year 1 revenue, when new clients are arriving fastest against a small base, and 5% by Year 5. Add-ons edge up from 6% to 7%. Year-on-year growth slows from 88% in Year 2 to 20% in Year 5, because with about one client in five leaving each year, a growing share of the selling goes on replacement.
Month by month, 2027
| Month | Monthly bookkeeping subscriptions | Add-ons: payroll runs, bill pay and management reports | Onboarding and catch-up bookkeeping | Total revenue | EBITDA |
|---|---|---|---|---|---|
| Jan 2027 | $8,175 | $675 | $3,240 | $12,090 | ($14,946) |
| Feb 2027 | $9,810 | $810 | $3,300 | $13,920 | ($13,222) |
| Mar 2027 | $11,445 | $945 | $3,360 | $15,750 | ($11,498) |
| Apr 2027 | $13,080 | $1,080 | $3,420 | $17,580 | ($9,775) |
| May 2027 | $14,715 | $1,215 | $3,480 | $19,410 | ($8,051) |
| Jun 2027 | $16,895 | $1,395 | $4,540 | $22,830 | ($4,830) |
| Jul 2027 | $19,075 | $1,575 | $4,620 | $25,270 | ($2,532) |
| Aug 2027 | $20,710 | $1,710 | $3,700 | $26,120 | ($1,732) |
| Sep 2027 | $22,345 | $1,845 | $3,760 | $27,950 | ($8) |
| Oct 2027 | $23,980 | $1,980 | $3,820 | $29,780 | $1,715 |
| Nov 2027 | $25,615 | $2,115 | $3,880 | $31,610 | $3,439 |
| Dec 2027 | $27,250 | $2,250 | $3,940 | $33,440 | $5,162 |
Fees bill monthly, so 2027 has no tax-season swing. Revenue climbs every month as subscriptions accumulate, and gets a lift in June and July when Google Ads and the website guides have run for a full quarter. Operating profit (EBITDA, meaning earnings before interest, depreciation and tax) is negative from January through September, with September within $8 of break-even, and positive from October to December. Cash is at its lowest at the end of Sep, at about $63,000 once the 7 days clients take to pay are allowed for.
Staffing plan
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and managing bookkeeper | $75,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Bookkeeper | $55,000 | Month 2 | 1 | 1 | 1 | 1 | 1 |
| Second bookkeeper | $55,000 | Month 5 | 1 | 1 | 1 | 1 | 1 |
| Third bookkeeper | $55,000 | Month 11 | 1 | 1 | 1 | 1 | 1 |
| Onboarding coordinator (part time, 12 hours a week) | $14,400 | Month 16 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Senior bookkeeper (reviewer) | $68,000 | Month 21 | – | 1 | 1 | 1 | 1 |
| Fourth bookkeeper | $55,000 | Month 26 | – | – | 1 | 1 | 1 |
| Fifth bookkeeper | $55,000 | Month 34 | – | – | 1 | 1 | 1 |
| Sixth bookkeeper | $55,000 | Month 43 | – | – | – | 1 | 1 |
| Second senior bookkeeper (reviewer) | $68,000 | Month 54 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $217,488 | $346,007 | $489,212 | $582,345 | $667,647 |
Maria starts alone. Bookkeeper one arrives in month 2 with 18 clients, bookkeeper two in month 5 at 27 clients and bookkeeper three in month 11 at 47. A part-time onboarding coordinator, 12 hours a week, joins in month 16 and lifts set-up and catch-up work off the team. A senior bookkeeper who reviews other people's closes follows in month 21. After that come a fourth bookkeeper in month 26, a fifth in month 34, a sixth in month 43 and a second senior in month 54. Seniors take about three-quarters of a bookkeeper's client load because they review. Maria draws $75,000 from the first month, which means every profit line is struck after her pay. The coordinator's $14,400 is a part-time salary.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $275,750 | $517,646 | $756,356 | $990,362 | $1,192,317 |
| Direct costs (bank and card fees, client-portal and sync tools, contract overflow) | ($16,040) | ($30,112) | ($43,998) | ($57,610) | ($69,358) |
| Gross profit | $259,710 | $487,534 | $712,358 | $932,752 | $1,122,959 |
| Payroll incl. on-costs | ($217,487) | ($346,007) | ($489,212) | ($582,345) | ($667,647) |
| Rent | ($26,400) | ($27,200) | ($28,000) | ($37,800) | ($38,900) |
| Utilities | ($2,400) | ($2,500) | ($2,700) | ($3,300) | ($3,400) |
| Marketing | ($24,000) | ($32,000) | ($38,000) | ($42,000) | ($44,000) |
| Insurance | ($9,200) | ($11,200) | ($13,900) | ($16,400) | ($18,400) |
| Professional fees | ($7,100) | ($6,700) | ($4,500) | ($5,000) | ($5,500) |
| Software subscriptions | ($9,000) | ($12,500) | ($16,000) | ($19,500) | ($22,500) |
| Training, certifications and professional dues | ($2,000) | ($3,000) | ($4,000) | ($5,000) | ($5,500) |
| Phones, supplies and postage | ($2,200) | ($3,000) | ($3,800) | ($4,500) | ($5,000) |
| Equipment replacement and new-hire kit | $0 | ($3,600) | ($3,600) | ($5,400) | ($3,600) |
| Recruiting | ($15,000) | ($6,000) | ($10,000) | ($5,000) | ($5,000) |
| Bad debt allowance | ($1,200) | ($2,400) | ($3,600) | ($4,500) | ($5,200) |
| Annual pay raises (3% a year) | $0 | ($10,380) | ($29,793) | ($53,999) | ($83,796) |
| EBITDA | ($56,278) | $21,048 | $65,254 | $148,008 | $214,517 |
| Depreciation | ($2,486) | ($2,486) | ($2,486) | ($2,486) | ($2,486) |
| Interest | ($5,135) | ($4,219) | ($3,170) | ($2,013) | ($738) |
| Income tax | $0 | $0 | ($2,109) | ($30,137) | ($44,371) |
| Net income before start-up costs | ($63,899) | $14,343 | $57,490 | $113,373 | $166,921 |
| Start-up costs expensed at opening (legal, licensing, launch marketing) | ($16,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($80,399) | $14,343 | $57,490 | $113,373 | $166,921 |
The first year runs an EBITDA loss of $56,278, a margin of -20.4%, and a net loss of $80,399 once interest, depreciation and start-up costs are counted. Profit arrives in Year 2, with EBITDA of $21,048 (4.1%). The margin then rises to 8.6% in Year 3 and 14.9% in Year 4. Year 3 carries a full year of the senior bookkeeper and two new bookkeepers, while Year 4 adds only one hire and the client count keeps rising. Year 5 reaches 18.0% despite the second senior, the bigger office and the pay raises building up. No income tax is due in Years 1 and 2 because of the carried-forward loss, and Year 3 pays a small amount ($2,109) as the last of it is used.
Where the cash goes
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($83,202) | $12,189 | $55,397 | $111,370 | $165,534 |
| Equipment and fit-out | ($14,000) | $0 | $0 | $0 | $0 |
| Funding received | $175,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($7,090) | ($10,293) | ($11,343) | ($12,500) | ($13,774) |
| Owner distributions | $0 | $0 | ($20,000) | ($40,000) | ($70,000) |
| Net change in cash | $70,709 | $1,896 | $24,054 | $58,871 | $81,760 |
| Closing cash | $70,709 | $72,605 | $96,659 | $155,530 | $237,289 |
Cash ends every year above zero and grows from Year 3 onward. Distributions start in Year 3, once cash and retained earnings can fund them. The thinnest point is during Year 1, shown in the monthly commentary above.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $70,709 | $72,605 | $96,659 | $155,530 | $237,289 |
| Accounts receivable | $5,288 | $9,927 | $14,505 | $18,993 | $22,866 |
| Equipment and fit-out (net) | $11,514 | $9,029 | $6,543 | $4,057 | $1,571 |
| Total assets | $87,511 | $91,561 | $117,707 | $178,580 | $261,727 |
| Bank loan | $47,910 | $37,617 | $26,274 | $13,774 | $0 |
| Paid-in capital | $120,000 | $120,000 | $120,000 | $120,000 | $120,000 |
| Retained earnings | ($80,399) | ($66,056) | ($28,567) | $44,806 | $141,727 |
| Total liabilities and equity | $87,511 | $91,561 | $117,707 | $178,580 | $261,727 |
Margins, break-even and loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -20.4% | 4.1% | 8.6% | 14.9% | 18.0% |
| Net margin (before start-up costs) | -23.2% | 2.8% | 7.6% | 11.4% | 14.0% |
| Payroll incl. pay raises as share of revenue | 79% | 69% | 69% | 64% | 63% |
| Revenue per full-time equivalent at year end | $68,938 | $94,117 | $100,847 | $116,513 | $125,507 |
| Average monthly revenue | $22,979 | $43,137 | $63,030 | $82,530 | $99,360 |
| Monthly revenue needed to cover operating costs | $27,959 | $41,275 | $57,256 | $69,434 | $80,379 |
| Debt service cover (EBITDA / interest + principal) | -4.6x | 1.5x | 4.5x | 10.2x | 14.8x |
Operating costs are covered in any year where average monthly revenue passes the "needed" row in the table. In Year 1 revenue averages $22,979 a month against $27,959 needed, so the firm loses money. In Year 2 it averages $43,137 against $41,275. Loan cover is negative in Year 1, with losses and interest running together, then 1.5x in Year 2 and 4.5x in Year 3. Payroll drops from 79% of revenue in Year 1 to 63% in Year 5 as each bookkeeper's list fills up.
Twenty percent less revenue
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $220,600 | $414,117 | $605,085 | $792,290 | $953,854 |
| Net income before start-up costs | ($80,349) | ($18,965) | $15,785 | $52,381 | $71,982 |
| Net income after start-up costs | ($96,849) | ($18,965) | $15,785 | $52,381 | $71,982 |
| Closing cash | $55,316 | $24,833 | $28,098 | $66,874 | $124,469 |
Here every revenue line is cut by 20% in every year, which in practice means fewer clients and less catch-up work. Maria's response is as follows. The first bookkeeper starts in month 4 instead of month 2, and every hire from month 13 slips six months. The second senior is dropped, marketing falls 20%, Maria's pay falls 20% to $60,000, the firm stays in its first office and nobody receives a distribution. A separate hours check shows the slower team still covers the smaller client list, with one exception: month 3 is about 58 hours short, which Maria absorbs herself, while months 1 and 2 have 24 and 11 hours to spare. On these terms cash never falls below $24,833 at a year end. Year 2 is a loss of $18,965, against a profit of $14,343 in the base case, and profit returns in Year 3. Equity at the end of Year 1 is $23,151. That is thin enough that a bank applying a net-worth test could come close to tripping it, and Maria would raise the point with the bank early. Later-year cash is higher than it would otherwise be because distributions stop. Without any response, the same 20% shortfall leaves $19,824 at the end of Year 1 and runs out during Year 2, which closes $74,859 overdrawn.
Sources
- Texas Comptroller of Public Accounts, Franchise tax: rates, no-tax-due threshold and report due date for the 2026 and 2027 report years.
- Texas Comptroller of Public Accounts, Texas is open for small business: no state income tax, small-business counts and the threshold change from January 2026.
- Texas Comptroller of Public Accounts, Taxable Services, publication 96-259, dated January 2026.
- Bureau of Labor Statistics, Bookkeeping, accounting and auditing clerks, Occupational Outlook Handbook: May 2025 median pay and 2025 to 2035 projection.
- Texas State Board of Public Accountancy, Consumers: non-attest services and the use of accounting terms by unlicensed firms.
- Texas Department of Insurance, Workers' compensation for employers.
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