How to Grow Your Business by Creating a Specialty Niche
A typical accounting business generally follows a predictable lifecycle.
When an accounting practice is in start-up mode, it’s common for professionals to accept any client who is willing to pay the fee with no regard for industry, specialization, or personality fit. When the business has survived beyond the initial three to five years, referral and recurring business can keep accounting professionals too busy for reflection and course-correction. Specialty niche and brand clarification questions often arise between years six to ten, when the accountant either feels comfortable to pause and reflect, or the growth of the business has become unsustainable.
Some firms follow this typical life cycle while others consider a niche specialty from the start. No matter which path you choose, here are some ways to think about defining your niche.
A niche for an accounting practice can be defined in terms of services offered (what you do), ideal clients (who you do it for), or both. Compare these examples.
- Salvatore Rossi, Accounting and bookkeeping
- Salvatore Rossi CPA, Serving business owners
- Salvatore Rossi, Accounting and bookkeeping for business owners
- Salvatore Rossi, Accounting and bookkeeping for Portland business owners
- Salvatore Rossi, Accounting and bookkeeping for Portland equestrian center owners
It’s important to know that there is no right or wrong way to define your specialty. An accountant can define a niche down to a very specific set of clients, services offered, or geographic categories. He can also leave it more generic. The deeper you drill down, the smaller your circle of ideal clients becomes.
In exchange, you can get some significant benefits, such as:
- Less time searching for prospects thanks to a targeted audience
- More targeted marketing messages (which can potentially improve your ROI on marketing)
- Position of the “obvious choice” in the market you are targeting
- Possibility of charging higher fees because the service no longer represents a commodity
- Perception as the expert in the field
Selecting a niche also comes with risks. A common fear is that by declaring a specialty, you might alienate some prospects and existing clients that don’t exactly match the new “ideal client” profile. In practice, accountants report that long-time clients tend to stay with their firms after a re-branding, but the risk of some client loss should be considered.
The niche decision also places greater emphasis on crafting an impactful value proposition. You must speak to the heart of your market and address a significant pain point. Here are the steps to direct your niche decision-making process and ensure that your choice will prove to be both sustainable and lucrative.
- Consider who your ideal clients are.
Think through their ability to pay the fees, as well as demographics, location, gender, and occupation. Looking for a trend among your best clients can be a challenging task. If you find yourself stumped, consult a trusted business associate outside of your firm. Sometimes, spotting a golden thread is easier from the outside.
Another approach is to do an 80/20 analysis on the existing book of business. Which 20% of clients account for 80% of revenue? Are they profitable? Would you want more of them?
- Do your research.
Successfully chosen niches are specific enough to position you as the perfect fit for your clients, yet large enough to sustain your practice. Accountants are often concerned about picking a niche that is “wrong” or “too narrow”. Research is the antidote.
- Are there successful businesses similar to yours in the niche you are considering? The level and quality of competition can be a good indicator of how large and lucrative your chosen niche is.
- Are there enough prospects? Can you find them easily?
- Can you reach decision makers?
- Is there a gap or a need that is currently unfilled?
Technology tools (Google Adwords), specialty research firms, and industry trend analysis are good starting points. Consider connecting with your clients and prospects and getting their thoughts on the niche you are considering.
- Modify or add to your product and service offering.
Your goal is to select a “profitable problem” – one that the clients will pay to have fixed. Consider changing your service offering, or even adding a new one, to address the pain and the needs of the target audience in a direct, clear-fit way.
Keep in mind that service modifications or enhancements are lucrative only if the target market understands and places a premium on them. Can you describe why your offering is better than the rest in terms that matter to your prospect?
- Invest in expertise.
Profitable niches are often competitive. Consider the expertise, experience, and value that is uniquely yours. Invest in maximizing your knowledge, network, and skill to differentiate yourself further. Your goal is to be the best you can be in your niche. Track industry trends, experiment, go deep.
As you consider the niche decision, be aware that a more specific brand will not be attractive to some clients and prospects that aren’t a perfect match. After all, great brands repel as much as they attract.