by Seth Fineberg
Scottsdale, Ariz. -- The need to diversify a technology or CPA practice, coupled with the rise in vertical-focused accounting software, has driven many firms to consider developing a niche practice. Easier said than done, say experts at the Information Technology Alliance conference, held here in late November.
The panelists were all software resellers for various vertical products from Best Software and Blackbaud Inc., as well as their own niche-focused, proprietary software in human resources, nonprofits and even equipment rental. All stressed that developing a niche practice is not something a firm can just jump into.
“The learning curve for us took over a year and a half before our human resources [product and services sales] exceeded our general ledger activities, and within that the sociological shift that happened within the firm was dramatic,” said Joe Rotella, chief technology officer at Columbus, Ohio-based Delphia Consulting. “We had to work extra hard to make the transition, and even after initial training only one consultant was able to make the transition from general ledger [sales] to HR.”
He and other panelists explained that even with initial struggles, the return on the investment of money and time was significant.
Gary Garnet, CPA, CITP, and his Farmington, Conn.-based firm DigiTech have worked on their nonprofit niche since 1995. The firm slowly hired experienced staff, ran seminars, and became active in the non-profit community while working with vendor Blackbaud Inc. and developing their own proprietary software.
Once a wholly owned division of the CPA firm Kostin, Ruffkess & Co., DigiTech has become well known in its space. Garnet said that it’s a daily struggle that always requires everyone in the firm to remain focused on specific goals.
“Our goal has always been to be an expert in this area and get known for what we do,” Garnet said. “There is definitely more time and effort spent than dollars, but it’s at the point now where much of our new business is from referrals. We just got a call from an organization 120 miles away that said they heard of us and really wanted to work with us.”
Among the most difficult decisions the niche practice experts said they make on a regular basis is deciding how broad or deep their firms should go into a particular vertical. To that issue, many simply advise firms to “take what you have and do it well,” or hire or acquire talent rather than stretch existing staff too thin.
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