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 is 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 is in years 3-5, referral and recurring business can keep accounting professionals too busy for reflection and course-correction. Specialty niche and brand clarification questions often arise in years 6-10, when the accountant feels comfortable with making refinements.
Whether you have followed that typical life cycle path, or are considering a specialty from the start, 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
The examples illustrate that an accountant can define a niche down to a very specific set of industry, service, demographic, or geographic categories – or leave it more general. The deeper you drill down, the smaller your ideal client circle becomes.
In exchange, you can get some significant benefits. Here is a short list.
- Better targeted prospecting can allow you to spend less time searching
- Ability to create best-fit marketing messages improves your ROI on marketing
- You become the obvious first choice for clients in your niche
- There is potential for charging higher fees, as you no longer deliver a commodity service
- You can be perceived as an expert in the field
Selecting a niche also comes with risks. A common fear is that by declaring a specialty, you will alienate some prospects and existing clients that do not exactly match the new “ideal client” profile. The niche decision also places greater emphasis on defining 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 is sustainable and lucrative.
1. Consider who your ideal clients are
Think through their ability to pay the fees, 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 for accountants who have been in business for a number of years is to do an annual total fee analysis on their book. Which 20% of clients account for 80% of revenue? Are they profitable? Would you want more of them?
2. 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. Here are some questions to consider.
- Are there successful businesses similar to yours in the niche? 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?
- 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.
3. 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 value on them. Can you describe why your offering is better than the rest - in terms that matter to your prospect?
4. 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, and go deep.
As you consider the niche decision, be aware that a more specific brand will not be attractive to some clients and prospects. Great brands repel as much as they attract.