Plan a small CPA practice
Illustrative case · Small licensed tax/accounting practice; no audit, review, compilation or other attest engagements · Illustrative California, United States; accountancy corporation with valid assumed S election
Explore this business · Overview
A small CPA practice can combine recurring accounting engagements with seasonal tax work, but those services compete for the same preparation and review hours. This illustrative California launch needs $101,173 including $60,000 opening cash. Its base first-year revenue is $361,878 and EBITDA is $60,769 after a gross owner salary of $108,000. These are modeled results, not industry averages.
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Illustrative base case · USD · five-year operating model
First-year net income: $50,962. Owner gross wages: $108,000. Year-end cash: $102,377. Opening expenses are recorded separately in retained earnings.
Project recovery compares cumulative operating cash before financing interest/principal, after the projected entity tax and replacement assets, with all startup funding including reserve. Equity recovery uses cash after debt. No terminal sale, reserve release or dividends.
Observed SBA industry evidence
Lending activity in the broader category
Entire NAICS 541211 CPA-office industry, not exact-format startup approvals, unique borrowers or operating demand.
These are positive-amount loan records selected by approval fiscal year and PIF, CHGOFF or EXEMPT status at the stated snapshot. They are not unique firms, search volumes, approval probabilities or loans disbursed during that year.
Read this industry’s amounts, terms, lenders and outcomes.
Source: SBA 7(a) and 504 FOIA files, snapshot 30 June 2026. Recomputed from original records on 1 October 2026. FY2025 is the most recent complete fiscal year in these files. Definitions and exclusions.
Which practice is this case about?
The case is a new, owner-led California professional accountancy corporation, with an already licensed California CPA, one permanent preparer at launch, and a second permanent preparer when the recurring book reaches 30 clients. A seasonal position fills bounded overflow. The service scope is recurring bookkeeping/accounting, individual and business tax preparation, and limited advisory hours. Audit, review, compilation and other attest engagements are excluded. Buying an existing client book, adding a partner, operating an audit firm or building a fully remote national practice needs a different case.
Choose the engagement mix before choosing a loan amount. A monthly client pays $750 for an assumed 6.0 preparation hours and 75 owner minutes. An individual tax job has a standard $500 fee; a business tax job $1,800. Job and advisory fees realize 96.0% of the standard price. Recurring accounting fees have no separate write-down. None of these fee, productivity or sales assumptions comes from SBA records.
The base starts with 12 recurring accounts, seeks 2 additions per subsequent month, and stops intake at 36. One client leaves in the modeled July and December periods. This discrete churn hypothesis is a workload planning choice. A signed engagement list, onboarding queue and actual retention evidence must replace it before an owner relies on the projection.
| Service | Unit sold | Preparation/review constraint | Billing basis |
|---|---|---|---|
| Recurring accounting | Active client-month | 360 staff + 75 owner minutes | $750 per month |
| Individual tax | Completed accepted job | 150 staff + 45 owner minutes | $500 standard fee |
| Business tax | Completed accepted job | 420 staff + 120 owner minutes | $1,800 standard fee |
| Advisory | Accepted owner hour | Owner capacity after review | $225.00 standard hourly rate |
Review the startup uses for launch commitments, unit economics for task costing, and profitability for the full five-year cash picture. The lower case runs out of cash in month 8. A recurring contract is useful only when its scope, collection terms and required hours are sustainable.
What can lending evidence establish?
The explicit topic is NAICS 541211, Offices of Certified Public Accountants. The verified broad industry pool contains 1,014 disbursed-status records selected by approval fiscal year across FY2023–FY2025, including 402 in FY2025. This includes operating formats and transactions beyond this small tax/accounting launch. Records do not count unique firms, establish applicant approval rates or show local demand. Census defines the industry; the lending library explains the aggregate methodology.
A lender still needs an owner-specific use-of-funds schedule, engagement evidence, qualifications and a credible collection forecast. In this case the owner contributes $46,173 and assumed debt is $55,000. These are a proposed funding split, not an SBA minimum injection or current lending quotation. The financing guide distinguishes prerequisites from financial forecasts.
California professional-corporation and active-license requirements are material. The CBA corporation rules require firm approval before practice. The absence of audit work does not itself settle professional standards or peer-review duties; engagement standards determine those obligations. The illustrative plan assumes a valid S election and separately models a California entity-tax proxy. Owner personal taxes and actual tax-return adjustments are outside the projection.
These five guides support an owner’s planning work. A complete business-plan example is deferred until the owner supplies and verifies the narrative; no fictional returned plan is presented. Product availability remains coming soon, with no approved price or checkout. The plan should eventually connect the engagement schedule, financial statements, owner inputs and supporting evidence.
Explore this business
This edition contains five planning guides. A full business-plan example for this format is not yet published.
Sources and scope
- Illustrative planning-case methodology · Checked 2026-10-05 · Explicit author assumptions; methodology is not evidence of local fees, demand, rent or quotations.
- California Board of Accountancy: accountancy corporations · Checked 2026-10-05 · Professional corporation and active California license; CBA firm approval before practice. Published fee, not a complete legal-formation quote.
- CBA licensee FAQs and peer review · Checked 2026-10-05 · Peer-review scope depends on standards/engagements. Excluding audits alone does not establish an exemption.
- Census 2022 NAICS 541211 · Checked 2026-10-05 · CPA-office industry, broader than this small non-attest operating format.
- SBA 7(a)/504 FOIA data · Checked 2026-10-05 · Verified project aggregate and hash-bound audit reused; June 30 2026 snapshot. No raw borrower records copied.