To put it mildly, Hamlet was challenged to decide what to do and what direction to take. In our profession, we also have had to make decisions; after all, we’ve heard it for years: “You need to go deep into a specific industry or focus on a niche to succeed as an accounting firm.”
A niche is usually defined as a specific industry or vertical, and some may even broaden the definition to include a business stage, such as a startup, turnaround, transition planning, or even IPO. Here, we will limit our definition of “niche” to a particular industry or vertical, so let’s consider the pros and cons of specialization in accounting.
4 pros to industry niches
Concentrating on a market niche has several clear upsides:
1. Acquiring deep and specialized knowledge of an industry can give your firm an advantage. For example, a nonprofit may have complex setup stipulations if it receives grants or specific reporting requirements for donors at the end of the year. Construction companies have different issues, including managing contractors, applying for government bids, and job costing, which can be complex and tedious. Learning these nuances and processes can be time consuming, leaving firms frustrated and less profitable if the research to complete a task is for a one-off client. However, firms that dive deep into a specialized industry can apply that information across more clients, multiplying the value of the time spent learning.