15 Best Cities to Start an Accounting Firm in the United States in 2024
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| 15 Best Cities to Start an Accounting Firm in the United States |
For most accountants, starting an accounting firm in the United States would be a risky endeavor due to the fact that they would be in their most vulnerable state in business perspective.
The underlying fear of failure, which would result in financial ruin or severely damage one's accounting career, would prevent many from trying to start their own accounting firm. With this knowledge, I hope to give future accounting firm entrepreneurs a clear understanding of how they may be more successful than firms in a similar position.
Understanding where the demand is and conducting location research will give a future accounting firm entrepreneur a better understanding of where to begin their business venture.
15 Best Cities in the United States to Start an Accounting Firm
In no particular order, here's a list of the 20 best locations known for their conducive environments for accounting firms:
1. Atlanta, GA
This southern city has an annual population growth of 2.7%, so there's always potential for new clients. It already has around 12,000 accountants and auditors, but it is expected to add another 1,150 jobs by the year 2025. Atlanta is also one of the best cities for young professionals to grow in their careers.
This finding is crucial because the first thing these professions need are entry-level clients, and there's no better place to find them than where young professionals are abundant.
This city also has the 5th lowest food costs and the 6th lowest medical costs when compared to the other 121 metropolitan statistical areas, so even though an accounting firm should have average to above-average earnings potential, lower costs for clients means increased marketability.
2. Houston, TX
Houston is the biggest city in Texas and has a varied and growing population. Along with a prospering economy, Houston offers many wonderful factors for small businesses.
Although it has had a history of terrible winters, the summers are now more manageable, and Houston can now be seen as a great city for an accounting firm. Due to a prospering oil and gas industry, a rapidly growing medical center, and a wide array of small and medium-sized businesses, Houston offers a climate for accountants that is hard to beat.
The Port of Houston is one of the largest in the US and adds to the diversity that an accounting firm can thrive upon. With a lower cost of living, no state income tax, and ease of doing business than larger cities, Houston can now be seen as a land of opportunity for many accountants looking for a city to set up their business.
3. Chicago, IL
Chicago, Illinois, is an east-north central state and is the third-largest city in the United States when it comes to population. When it comes to salary, if you are hired by someone else, the median is around $51,000 per year. When you are the owner of your own firm, the average salary is much higher. You would be looking at around $80,000 per year.
The cost of living in Chicago is 16% lower than the average in the states, but when it comes to setting up your own firm, Chicago has the second highest cost index ranking. This would put it third in terms of the highest tax rate on businesses and fifth when it comes to how much the city supports small and midsize companies.
It will cost quite a bit of money to start your own accounting company in Chicago, but in the long run, if you can handle the cost, it will be worth it for the higher income you will make compared to other cities.
4. San Francisco, CA
Despite all of its good qualities, the city of San Francisco may be too expensive for the average small accounting firm to set up.
High costs of living and office space can be a real barrier for firms operating on small businesses and individual tax returns. However, given the potential revenues from servicing Silicon Valley companies, San Francisco is still a good bet for firms specializing in business and IT consulting.
The climate and scenery also attract many people to San Francisco. As an international tourist destination and due to its close proximity to wine counties and ski resorts, San Francisco can please employees with a wide variety of interests. The city offers a thriving cosmopolitan setting and the enrichment of an incredibly diverse population.
Aside from offering many of the good qualities that New York City has, San Francisco is an attractive location due to its quality of life. Firms can easily expand in the city and Silicon Valley, but many accountants will find the ideal pace and size to be that of a small to medium-sized firm.
5. New York City, NY
New York happens to be the business capital of the US, from small businesses to the world's largest corporations. Due to this, there is a high demand for accounting services. Whether you are interested in tax, audit, or general accounting for small or medium businesses, there are a vast number of potential clients.
Research indicates that the accounting industry has been one of the fastest-growing industries in NYC. Although there is a high cost of living in this area, this is an ideal location for an ambitious CPA that is looking to grow their practice (one day employing 20 to 100 employees).
New York is also the financial capital of the world and there are an abundance of opportunities for accountants in financial accounting. For those interested in accounting for the capital markets or forensic accounting, there is no better place to be.
6. Dallas, Texas
When discussing potential areas for starting an accounting firm, Dallas deserves our attention. The city is the ninth largest in the U.S., and the third largest in Texas, making it an opportune area for an accounting firm. There are currently 298 CPA firms in Dallas, totaling over 2,200 CPAs.
Evidence of demand can be found in the city's four-year growth rate. With Texas currently ranking as one of seven states with no state income tax, it is still an area with high income taxes in relation to consumption and other dental taxes. Consumers in Texas are taxed at 8.4% of their income, compared to an 8.9% national average.
This typifies a need for tax services, and with tax services being the number one money making-service in Dallas accounting firms, there is plenty of opportunity to meet this demand. With businesses located across the nation coming to Dallas to escape state income taxes in their states, there is a growing need for tax planning and tax service for these businesses.
7. Washington, D.C.
The popularity of Washington D.C. as a location for starting an accounting firm is escalating, and a trip to this urban environment is an educational and enlightening experience for those considering a move or developed an interest in urban public accounting practice.
Washington D.C., the capital of the United States, provides a stable business environment that caters to the needs of public accountants. With the vast number of firms ranging from non-profits to the federal government, there is no shortage of demand for accounting services at the federal, state, and local levels.
In fact, Washington D.C. is home to more associations, charities, and trade organizations than any other city in the U.S. (approximately 10,000) and over 1,200 non-profit organizations. The business environment is not limited to non-profits. There are over 50,000 small businesses in Washington D.C. Many smaller businesses are government contractors with services ranging from consulting to IT services.
All of these entities require some form of accounting service, be it tax preparation or consulting. The D.C. metropolitan area has even been said to have the highest concentration of educated workers in the U.S.
8. Boston, Massachusetts
Boston, the capital and largest city of Massachusetts, is one of the oldest cities in the US, with a rich economic and social history. It has a large number of prestigious accounting firms and is ranked fifth in the top 100 US cities to start a business.
It scores an overall "A-" on WalletHub's list of the best cities to start a business in, and a particular bonus is that it has the highest average annual salary for accountants in the US, at $83,840. It also has the fifth highest number of accountants or auditors employed among all states and the District of Columbia. High potential demand increases the chance of start-up success.
Boston is a high-skilled, high-wage city offering a unique chance for an accounting start-up to leave the gate at a sprint, and with the energy and devotion of the founder, this can lead the firm to finishing very well indeed.
9. Miami, Florida
Miami is an accessible and dynamic city for a startup accounting firm. It is strategically located at the crossroads of the Americas, between the U.S. and South America. Due to its location, it is aptly named "The Gateway to the Americas."
Organizations that are headquartered in Miami conduct business in Latin America and need accounting expertise in the region. Accounting firms in Miami can benefit from focusing on this specialized area of Latin American business.
There are plenty of opportunities for consulting engagements, and accounting firms in Miami can target small businesses, which are the lifeblood of Miami's economy. There are 108,000 small businesses in Miami-Dade County alone.
With international trade and a booming tourist industry, small business owners have a great deal of opportunity. They will need accounting expertise and services, which startups can provide.
10. Denver, Colorado
Denver is the capital and largest metropolis in Colorado. It has a significant number of suburbs, cultural characteristics, and attractions. It is the kind of market where an accounting firm should boom.
Governmental agencies require internal accountants and auditors. The well-established healthcare industry includes a great demand for accountants as well.
Denver also has a high quantity of professional sports teams that require accountants (very strong demand). The number of accountants and auditors is projected to represent one of the fastest-growing occupations over the next decade.
With the changing business environment, complex financial laws and standards, and the need for more accountability, this has resulted in an increase in accounting work for Denver.
11. Seattle, Washington
Expanding Big Four accounting firms have established multi-level headquarters in Seattle, driving up the demand for qualified accountants in this Northwest market. Seattle's geographical location also makes it a prime source of business or tax-related legal opportunities.
With major corporations such as Microsoft, Amazon, and Boeing headquartered in Seattle, there are countless high-paying CPA firm opportunities. The opportunity to cater to smaller businesses in and around the Seattle area is also a plus.
According to the Small Business Council, the majority of future-growth businesses are projected to be in the Seattle metro area. With around 350,000 small businesses already in place, this is a huge market for the small firm entrepreneur.
12. Philadelphia, Pennsylvania
When you think of Philadelphia, one of the first things that comes to mind is the history. To this day, Philadelphia is rich in history and provides an excellent location for anyone wanting to start an accounting firm. This city alone holds 6 Fortune 500 companies and many more large corporations.
In addition to those, there are thousands of other businesses within the city that would require a multitude of accounting services. As for the demand, Philadelphia has both high and low income sectors within the city as well as large surrounding areas.
With the supply and demand of accounting services in Philadelphia, combined with the vast potential for future clients, this city ranks very highly amongst the best cities to start an accounting firm.
Another benefit of starting an accounting firm in Philadelphia is the potential revenue that can be earned. Based on the cost of living in the city, the average income received by accountants is 35% higher than the national average.
13. Charlotte, North Carolina
The costs of conducting business in this city are about 3% below the national average, which is a great benefit to new companies. Charlotte has a diverse economy, which is good for an accounting firm, and depending on which source is being used, is ranked first, second, or third in the United States in the banking industry.
Best of all, according to Entrepreneur Magazine, Charlotte is ranked the number one most affordable city in the United States and has one of the best outlooks for the economy. This means that the cost of living is low, and there will be a higher chance for businesses' success.
Due to lower living costs and higher income potential in Charlotte, residents will have more disposable income, which in turn will contribute to further economic growth.
14. Minneapolis, Minnesota
Minneapolis, in the state of Minnesota, has a strong economy and a healthy population growth rate. The residents have the second-highest per capita income in the nation. Additionally, there are 18 Fortune 500 companies in Minneapolis—more per capita than in any other U.S. city.
The city is home to the tax practices of the "big four" accounting firms. This reflects the fact that Minnesota has the 6th highest business taxes in the nation, and public companies have the highest effective corporate tax rates in the nation. Many companies are potentially seeking help to minimize taxes, and accountants can provide valuable consulting services on tax minimization strategies.
There are also many opportunities for accountants to become expert witnesses and lawyers in tax cases since Minnesota has a large number of tax law court cases. High tax rates and frequent tax law changes create a strong demand for accountants to interpret new tax laws and help individuals and companies manage their tax strategies.
15. Phoenix, Arizona
The cost of living is relatively low compared to other large cities in the west. This is good for new CPAs who will not make as much income initially. A lower cost of living means a higher standard of living. Current economic conditions have created a large surplus of accountants. While this may seem like a negative factor, the quality of services offered in Phoenix is not very high.
This basically means that there are many accountants, but there is still plenty of room for talented CPAs committed to providing quality services.
Arizona is generally considered one of the more well-off states in the US and has a culture strongly oriented around commerce and entrepreneurship. The largest city and state capital, Phoenix, is the best place in Arizona to start a CPA firm.
Phoenix is growing fast! There are already over 1.3 million people living there, and every year, about 100,000 more people move in.
One big reason for all this growth is the tech industry in Phoenix. Lots of young people are starting tech companies there, and they'll probably need help with accounting.
Factors to Consider When Starting an Accounting Firm in the United States
There are many factors to consider when choosing a profitable location for your accounting firm in the USA. They include, but are not limited to:
1. Population and Market Demand
One of the most important factors to consider when starting an accounting firm is the population and market demand of a specific area. If there are not many people in a certain area, then the demand for accounting services will be low, and if the area does not have much potential for growth from new businesses and residents, then the demand will stay low.
The ideal area for starting a small accounting firm is in a community with a diverse set of businesses and residents that is experiencing growth. The reason for this being that new businesses are often in need of accounting services, and with high growth, there is a greater demand from all of the existing businesses and residents.
2. Business Environment and Tax Policies
When considering factors to consider when starting an accounting firm, the business environment and tax policies of a city can be a major driver in firm profitability.
A city with a lot of businesses will have a higher demand for accountants. Similarly, a city with low taxes or a business-friendly tax policy will have a lot of business start-ups.
A city's business environment can best be described in terms of regulation: how easy is it for a firm to start-up, and what is the ongoing regulatory burden (e.g., annual state board fees, continuing professional education requirements, etc.)?
Low-regulatory-burden cities are easier environments to operate in and make it easier to start an accounting firm.
3. Cost of Living and Business Expenses
The cost of living varies widely across different cities and states, and this should be heavily researched when selecting a good location for an accounting firm. The cost of living has a massive impact on potential employees who likely have student loan debt and would prefer living in an area where their salary goes further.
A higher living cost also means clients will have less disposable income to spend on accounting services. A high cost of living can also translate to higher office lease expenses, which can be a deterrent to businesses just starting out with no clients.
Tips for Success in Starting an Accounting Firm
Here are some valuable tips that you will need to succeed when you want to start an accounting company in the United States:
- Specialize in an accounting niche to stand out.
- Cultivate relationships for networking.
- Utilize technology, such as accounting software, for efficiency.
- Prioritize excellent customer service
- Develop a strong brand identity.
- Stay informed to ensure compliance.
- Commit to continuous professional development.
Conclusion: 15 Best Cities to Start an Accounting Firm in the United States
As an accounting firm, you must do what is best for your business, and deciding where to base your offices should not be taken lightly. People often underestimate the power of location, but it can truly make or break your business.
When choosing a profitable location, it is important to consider competition, costs, and especially the saturation of the product. This is even more important when considering setting up an accounting business in the professional services industry.
