[IMGCAP(1)][IMGCAP(2)]Are you a generalist or a specialist?
Accounting firms of all sizes continue to see increased, long-term success in recruitment and retention of clients because they are providing specialized services and focusing on niche industries. A niche focus enables practitioners to work with their clients to provide much more than basic accounting and tax services. Clients love the fact that their accountants are more than service providers; they are partners and trusted advisors to their businesses.
Establishing a niche focus isn’t easy. Let’s face it — 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. While it logically seems you might find more prospects with the jack-of-all-trades approach, CPAs and accountants actually say it’s easier to focus on what they know really well, rather than always trying to learn a new industry or spread themselves too thin across too many different industries.
In the “CPA of the Future study” conducted by CPA.com, more than 400 CPA member firms of the American Institute of CPAs were asked what their firm might be like in the year 2025. An overwhelming 80 percent thought that their role will change significantly in the future and that they will offer more consultative business development, risk management and advisory services.
Among other trends, these results point to a real need in firms to establish a niche focus, yet so many practitioners don’t know how to get started. Here’s a three-step plan.
STEP 1: DETERMINE YOUR INTERESTS
What do you enjoy doing? 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, so you gravitate toward health care because you understand the industry and have more specialized knowledge in this area. On the service side, 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. For example, this year’s chair of the Maryland Association of CPAs, Marianela Del Pino-Rivera, a CPA in Bowie, Md., has a niche focus in international tax. Among other services, she works with clients referred by immigration attorneys to explain and comply with complex tax rules for visa holders and foreign investors. Or take Mark Feinsot, a CPA in New York City who offers tax planning, accounting and bookkeeping to the aviation industry, and specializes in tax prep for crew members, or Peter Freuler, a CPA in Orlando, Fla., who focuses on real estate clients.
While it’s obvious that there are unlimited possibilities when finding a niche, the key is to not only focus on what you like to do, but also on what is going to bring in the most clients who can help you meet your financial goals. Most CPAs and accountants are philanthropic, but maintaining a practice devoted to nonprofit accounting may not lead to as many high-dollar engagements as something in the for-profit sector. Look at your existing client base to determine clusters of industry clients that might give you insight into natural specialties you have built over time.
There’s also the matter of value pricing to consider. By now, you and your firm should have examined whether you want to offer value pricing, instead of billing by the hour. Ron Baker, a frequent speaker at accounting conferences and a true advocate of value pricing, said, “A business is defined by the value it creates for its customers. Your price speaks volumes about your value proposition, more so than any other component of your firm’s marketing.”
STEP 2: CLEAN HOUSE!
In order to maintain your niche focus, the second step is to refer your clients to a service provider that is better aligned to help them. Step 1 and Step 2 are probably interchangeable — you may not be able to do one before the other. And, of course, don’t give up every non-niche client. Carefully examine the ones you have and think about the following:
- Can you outsource all or part of the engagement and still retain the client?
- Is the client a good referral source for your firm? Better yet, have you attempted to reach out to the client to discuss referrals? Remember, referrals are a two-way street. Your client wants to build their business, too.
- Would the loss of a client have any repercussions with the clients you want to keep? How likely are they to use Yelp or social media, for example, to talk about your firm?
- Can you easily make a referral to another practitioner, either in your firm or in another firm, to take on the business in order to provide the client a safety net, while at the same time focusing on what you really like?
Coming to terms with cleaning house is difficult, especially with the clients you like.
STEP 3: MARKET YOUR SKILLS
Now that you have a niche focus and you’ve made room in your practice for your future clients, it’s time to market yourself. This is the step where most practitioners fall short; just because you hang out a shingle or specialize does not mean your phone is automatically going to ring. While Web sites and search engine optimization/marketing help prospects find you, you’re more likely to build your business through word of mouth and referrals than any other endeavor.
To get those referrals, here are some tips to consider:
- Believe it or not, the lowest-hanging fruit may be the clients you just referred to another provider. You didn’t let them go because of the relationship or your accounting acumen. If you were honest with them about concentrating on niche services, then they are still very much in your camp.
- People don’t know what they don’t know, so reach out to everyone you know to tell them about your service or industry niche. This includes your current clients — the ones you want to keep — as well as any associates, friends and even family.
- Seek out networking groups in your niche. You can do this in person through local meet-ups or even online. LinkedIn is a perfect way of finding groups that fit your niche. If you enjoy working with musicians, find a music-oriented group and participate in their conversations.
- Do it in a tasteful manner without being too promotional or obtrusive. Chances are, once they discover your background, you’ll get some tax and accounting questions, so within the group, you can position yourself as that subject matter expert.
- Market yourself to other CPAs and accountants. You may become a very valuable outsourced provider to a firm that has a tax client who is in your specialty niche. The originator firm gets to keep the client for other accounting services, while you provide the kinds of services the firm either can’t, or doesn’t want to, offer. One of these could be expat services, for example.
- Attend local, regional and national professional events and trade shows around your chosen niche. There are plenty to choose from, so use your discretion to go where you think you’ll do the most good in terms of prospecting for business.
- Don’t forget social media! Use LinkedIn, Facebook and Twitter to connect to industry groups, reporters and even prospects. Use SlideShare to capture your presentation and get your messaging out in social media to amplify your networking activities.
HAVE A GOOD TIME!
We all have to go to work every day, so why would you want to work with a client who is a chore, rather than a joy? Not only will you experience burnout, but your client will also understand very quickly that you would rather be anywhere else — and that’s not good for your business.
It’s still early enough in 2015 to take the time you need to assess where you are and where you want to be. Don’t do anything rash and think through your options. It’s never too late. AT
Pascal Van Dooren is chief revenue officer at Avalara; reach him at email@example.com. Tom Hood, CPA.CITP, CGMA, is executive director and CEO of the Maryland Association of CPAs. Reach him at firstname.lastname@example.org.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access