In my previous article, I discussed the benefits accounting firms can realize by creating a specialty niche – a practice that provides certain services (or packages of services) to clients in a particular industry. Most firms have discovered this through previous personal experience or through years of experience serving clients in a particular industry.
You might even have the beginnings of a niche without realizing it. Try looking at some of the following when analyzing your firm’s opportunities.
Do You Have More Than One Professional Who is an Expert on a Specific Subject Matter?
Often a niche forms organically around individuals at the firm. When you have an expert or two with deep experience serving clients in real estate, franchisees, manufacturers, state and local taxes, certain retail businesses, estate taxes, you have a specialty service area ready to be tapped and transformed into a nice- and it’s time to market around it. This niche cannot be centered on a single professional (unless it’s the owner of the firm) because that person may leave. A lasting niche requires having others on staff that are trained and experienced in the niche as well.
Are You Willing to Invest Time and Resources to Develop The Niche?
You must be ready to market the niche and develop the staff with this in mind, which means including it in the training, sales processes, lead generation, and promotions on your website. The niche is about attracting more A-list clients who will pay premium fees for a premium service- so, respect your niche.
If you are still a generalized firm, you might be having difficulty finding a niche that you can develop. You need to have confidence that there is a market for the services your niche provides, without keeping your niche overly broad. Consider the following:
Not a niche: ‘Accounting firm specialized in serving small businesses.’ Virtually every accounting firm does this, so you are doing nothing to stand out.
Try this instead: ‘Accounting firm specialized in serving small medical practices (or legal firms, or real estate offices, etc). You highlight your niche, ensuring you stand out from the other average firms.
Not a niche: ‘Firm specialized in providing management consulting to growing businesses.’ Heard this before, right?
Try this instead: ‘Firm specialized at helping retail businesses grow their online sales (or other types of business).’
Here are five factors to help you find your firm’s niche:
Judge each potential niche for the following factors:
- Do an online search of accounting professionals that you think to have a comparable set of specialties as your firm. Make note of each of the niches and sub-specialties. Just because others are doing it already, it does not mean that you can’t have the same lucrative niche. In fact- their model may prove that it’s viable- and maybe can even be improved upon.
- Make a checklist of ten potential specialties that your practice could offer. There are so many out there: serving home contractors, real estate agents, lawyers, tech startups, medical practices, grocers, auto dealers, restaurants, franchisees, oil and gas, delivery companies, etc. Go through your chamber of commerce’s directory to get ideas.
- Would providing this service or working with these business types be interesting to you?
- Can you acquire enough clients in this space to build it as a niche area of your practice?
- Have you worked with these types of clients before, and therefore have specialized knowledge of their needs?
- Have you already established business relationships with owners/managers of businesses in this space?
- Is this type of business thriving in your area, or can you develop a client base through online methods?
- Do you want your firm to be known for specializing in these types of businesses?
- Are there conflicts between serving these types of businesses due to prior client engagements?
- Is the type of business you are considering serving still viable and growing? Or are they horse buggy makers? (Or video rental stores.)
- Can you do a better job providing a better service than other firms in your area providing similar services?
If you’ve checked four or five of these, you might have discovered a niche your firm can be successful in.
- Is the potential niche viable from a revenue standpoint? If you tested several against the above list, take the top few and determine if that market, those businesses, will be willing to pay a premium for your specialized services.
- Choose the one you are personally interested in. If there is more than one potential niche with enough checkmarks from the top list and you see there is a viable revenue channel, then select the one you have a personal interest in, since this is the one that will most likely retain your interest- even when you get into the day-to-day service aspects. You don’t have to limit yourself to a single niche but work on developing one at a time.
- Be pragmatic. If there is more than one niche that you want to develop and they score equally well above, then go a step further with your prioritization. Which one:
- Do you already have the most experience with, even peripherally?
- Has the more likely chance of success?
- Has the largest potential client base?
- Has the most existing relationships with clients you already serve or have served?
- Has potential clients with the best current and projected growth potential (no buggy makers)?
- Drives your interest the most?