You know you need to grow your practice. One logical path would be a whole new base of clients. Sometimes that can mean getting up to speed on an industry you know little about.
Consider it first a learning challenge. “I love new industries,” said Jennifer Brown, an EA at Implex Tax & Accounting in Clearfield, Utah. “It provides a new perspective on expenses that we see every day.”
“I love always learning new things,” said EA Jeffrey Schneider in Port St. Lucie, Fla. An example from his practice? “I have business clients who are involved in bartering, and they had no idea on how taxes come into play,” Schneider said.
“Establishing a niche focus isn’t easy … it takes a lot less energy to say you’re a tax practitioner serving any industry, instead of only serving a certain industry, such as health care or manufacturing,” wrote authors Tom Hood and Pascal van Dooren in the Accounting Today article, “Riches in Niches.”
The tax prep profession does enjoy one huge advantage regarding securing clients in new industries: “They all still need to do their taxes,” said Kerry Freeman, an EA at Freeman Income Tax Service in Anthem, Ariz., “and with each new business or industry comes new and unique challenges.”
Freeman offers an example of an industry that has blown up in a short time: “Just look at the cannabis industry, seeing this industry blow up in such a short time and the ways we as tax professionals have to … comply with the federal law as well as asset our clients to legally be in business.”
EA and blogger John Dundon of Taxpayer Advocacy Services in Englewood, Colorado, “most definitely” enjoys working with clients in new industries with that one exception – marijuana, what he terms “the cutting edge of legalized weed.”
“Marijuana tends to generally bring around characters that are particularly difficult to work with … more so than any other new industry,” Dundon said. “The success of the marijuana industry, though, seems to be turning some pharmaceutical companies upside down, which is both welcomed and encouraged. So we find ourselves on occasion helping well-meaning proprietors weed out noise … and stay focused on compliance.”
Ask, talk, leverage
“I like learning, and this presents an excellent opportunity,” said Laurie Ziegler, an EA at Sass Accounting in Saukville, Wis. “Besides, just because it’s a new industry or new to me doesn’t mean there aren’t resources available.”
Experts polled in Inc. magazine offer several pointers for cracking new industries and niches.
Ask questions. Never be afraid to admit your own ignorance, and use every opportunity to learn more.
Leverage your fresh perspective. While your inexperience means you have a lot to learn, it also means you have no biases, which may allow you to see issues in a different light.
Talk extensively customers and partners. Those who’ve gone before you in the industry can be your guides.
“Engaging a new client in a new industry is always a challenge I enjoy because it contains researching, planning and designing,” said EA Janet Sienicki in Schererville, Ind. “Researching the industry, how the IRS audits these businesses, and how the client’s business fits into that industry helps to provide the foundation for designing accounting systems and appropriate tax planning.”
Hood and Van Dooren also suggest:
Many firms built their practices based on specialty areas of interest. Perhaps you’ve been around medicine your entire life because your father or mother is a doctor; maybe you enjoy the analytical aspects of financial statements, which translates into a forensic accounting focus. There’s a niche focus in every industry and every service.
- Look at your existing client base to determine clusters of industry clients that might give insight into natural specialties you have built over time.
- Examine your non-niche clients and consider: Can you outsource all or part of the engagement and still retain the client? Is the client a good referral source for your firm? Would the loss of a client have any repercussions with the clients you want to keep?
- Market yourself. You’re more likely to build your business through word of mouth and referrals; start with the clients you just referred to another provider.
- Seek out networking groups in your niche through local meet-ups or online. Market yourself to other accountants and tax professsionals.
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