Creating your vision and business strategy for niche markets
As the old saying goes, every business is different. Each profession/industry and type of business comes with its unique challenges and goals. Though accounting is often regarded as a “one-size-fits-all” service, the reality is that every industry has its custom accounting and tax needs. As accountants, this reality provides us with a prime opportunity for niching our firms into targeting specific industries or services.
3 benefits to niching your firm
At first glance, narrowing your range of clients may seem counterintuitive; after all, shouldn’t we be targeting everybody who needs accounting services? Despite appearances, focusing your firm on a particular industry or subset of services provides many benefits. In this article, I’ll discuss the steps you can take to transform your accounting firm into a profitable and focused success.
- Achieve mastery within your element. Even businesses with many services or products have a specific service or product they deliver perfectly. When you focus your services, your firm can optimize its workflows and tasks to ensure client deliverables and your team are always punctual. Once you’ve found your niche, you’ll be able to spot inefficiencies and details that would have otherwise escaped you. Put another way, you and your team will become experts at delivering your services to your niche audience and become recognized as the “go-to” firm within that industry.
- Increase your chance of a higher profit margin. By continuously optimizing your workflows for delivering your services, you’ll spot opportunities for automation and streamlined client management. Lowering the friction for your team members will increase their productivity over time and increase your profit margin. Since niching eliminates any downtime resulting from indecision and bottlenecks, implementing a recurring revenue model in your niche firm will increase your profit margin.
- Attract your target audience. While it may seem obvious, it’s worth noting that niching your firm will help you to attract more qualified clients. When your firm has a consistent message and focus, you will automatically make it easier to attract qualified leads. When people can understand your focus area from your website, social media, and referrals, they’ll either qualify or disqualify themselves from your specified niche. Once clients within your niche recognize you as a leader in delivering your services to them, they’ll be more likely to stay with you. If you’ve done it right, your clients will also only refer qualified leads within your targeted industry to you. This pre-qualification takes away much of the work involved in turning away unqualified leads that usually leads to a decrease in your firm’s productivity.
How to discover your firm’s niche
Discovering your firm’s ideal niche doesn’t have to be a complicated process. You may already be operating within a niche and not even know it! There are a few ways to discover your firm’s specific niche:
- Attempt to categorize your regular clients.
- Understand your firm’s strengths.
- Draw on the personal experience(s) within your firm.
To see an example of a successful niche firm, look to Chris Farmand, founder of Small Batch Standard. He recently wrote an article for the Journal of Accountancy that discussed how he discovered a niche opportunity within the craft beer industry. It all started with a brewery client that opened up Chris’ eyes to the operational challenges facing breweries. Once Chris discovered the opportunity, he began to establish himself within industry communities by attending events and making connections. Genske, Mulder & Company, LLP, another niche firm, focuses on the agribusiness and dairy industry. These are just a few opportunities that are available for you when you niche your firm.
Some niche opportunities for your firm
As you consider transforming your accounting firm into a “specialist” firm, here are some common areas in which you can focus your services. This list is by no means exhaustive, but I hope it helps you maximize your firm’s success potential. When you are niching your firm, you can either focus on a particular industry or type of client(s), or hone your delivery of a specific subset of services. Here are some common niche opportunities that I’ve noticed emerging for firms:
- Audits and compliance: Ensure your clients’ financial statements and operations are verified, accurate, and compliant.
- Forensic accounting: Help clients track down or avoid financial crimes.
- Information technology: Innovate accounting methods and processes with information technology and streamlined systems.
- Business consultation: Blend financial analysis with business strategy to inform the high-stakes decisions of your clients and help them lower risks.
- Outsourced CFO and accounting services: Run your client’s entire accounting department using cloud technology.
- Wealth management: Partner with professionals in life insurance, estates and trust services, retirement planning, and investment services to help your clients plan their legacy.
Niche opportunities by industry:
- Nonprofit organizations
- Real estate
- State and local governments
- Professional services – legal, for example
- “Gig” economy
Niching your firm allows you to build a portfolio of clients that are fiercely loyal, more likely to refer, and that are enjoyable for you and your team. Once you’ve discovered your niche industry or services, your firm will be on the road to becoming more efficient, profitable, and successful.