How to create a niche accounting focus at your firm
Many firms do general accounting for a wide range of businesses. But sometimes it can be more lucrative to specialize.
Every business is different
Accounting is often seen as a general profession. After all, almost every business needs tax and accounting services. Yet each business is different. You could treat them all the same way for accounting purposes. But if you did, you'd be missing a golden opportunity.
Each business has different markets, clients, ideas and ways of doing business. They use different terminology – and they think differently.
They might choose a general accounting firm if they have no alternative. But if you can speak their language and appeal to them, you'll win their business. Then you can carve out a profitable new niche for your firm.
In this guide we'll look at how you can identify your specialty accounting niche – and make the most of it.
The advantages of an accounting niche
It might seem odd to deliberately narrow your potential market. Yet there are good reasons for doing so. A niche can:
- set you apart from the competition: For example, there might be dozens of general accounting firms in your area. But if you specialize in retail accounting, there will be much less competition.
- helps prospects find you: People use online searches to find a good accounting firm. You can get to the top of the search results for a specific area of business.
- help you learn and grow: As you take on more niche clients, you'll learn more about the finer details of their work. This will help you improve your service and grow your firm.
- give you expert status: Your company won't be just another accounting firm. It'll be an accounting firm with specialist accounting knowledge. That's great for attracting new prospects.
Finding a niche – four questions
If you've been in business for a few years, you may already have a specialty. But you might not have realized it yet. These four questions will help you find your niche:
1. Who are your regular clients?
If you have a couple of clients in the same general field, that could become a specialty. For example, they might be:
- medical clients, including doctors, dentists and other health professionals
- franchisees with similar business models
- restaurant owners and hospitality businesse
- technology companies
- construction businesses
- legal firms
- almost any type of business
2. What are you good at?
Maybe you're great at payroll services. Perhaps you excel at moving traditional businesses to online accounting software. Or maybe you love the buzz of working with tech startups. The particular needs of serial entrepreneurs might be your specialty – and they're good clients because they'll come back again and again. Think about what you enjoy and what you're good at. That's a good basis for a specialty.
3. What's your background?
You're an accountant now, but perhaps you weren't always an accountant. If you grew up in a farming community, you may have some insight into agricultural businesses. Maybe your parents worked in real estate. Perhaps one of your partners used to be a lawyer. All of these are opportunities for finding your firm's niche.
4. What's happening around you?
You don't have to limit your clients to those within walking distance. But if you're surrounded by businesses of a particular type, it makes sense to try to win them as clients. Once you've built a local niche, you can start to expand further afield. Above all, you should be looking for a profitable niche. You might have a lot of regular clients in the same industry. But if they're not profitable, that's not the ideal niche for you. Keep looking until you find one that ticks all the boxes. Alternatively, look for the niche that you are passionate about, then work out how you can make money from it.
Five ways to develop your specialty
Once you’ve decided on your specialty accounting niche, how do you develop it? Marketing and branding are important here.
1. Create a new business presence
It doesn't cost much to set up a new website for specialized accounting work. You may even want to spin off a subsidiary business just for your niche. This will look more impressive to prospects and will help you target specific clients.
2. Provide great content
If you want people to find you, make sure you give search engines plenty of good content. Write regular blog posts – try to provide useful information for your potential customers. You may be surprised by how much business this can generate. Some business owners will be dissatisfied with their existing, general accounting firm. They’re likely to search for someone more specialized. Great content will help them find you.
3. Spread the word
Promote your firm with social media to market your specialty accounting services to clients not in your immediate area. This can help you develop micro-specialties. For example, there might be little demand for veterinary accounting in your home town. But with online accounting software and social media, you could reach veterinary clients all around the country.
4. Don’t stop at one
Having one accounting niche is great, but why stop there? If you have the expertise in-house, you could expand into other markets too. Talk to your staff and find out about their specialized business knowledge. Let them help you expand into new markets.
5. Keep your finger on the pulse
Once you've built a reputation as a specialized accounting firm, you need to hold onto it. Stay up to date with developments in your clients' field of business. Keep up with emerging trends and watch out for new legislation. As well as maintaining your expert status, this may help you find new niches. New markets appear all the time – consider Uber drivers and Airbnb hosts, for example.
Benefits for everyone
Developing a niche can give your firm greater insight into your clients' needs. So when you create a specialty accounting service, it's not just your firm that benefits. Your clients do too.
The more you learn about their businesses, the better you'll be able to serve them. This will help keep them happy with your service. It may also encourage them to recommend you to other businesses.
So building a niche can result in a virtuous circle that helps both you and your clients. Sometimes, thinking small can help your firm grow bigger.
Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.
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