Going Vertical To Up Your Value
There is a topic that seems to keep popping up in the world of accounting. To niche or not to niche? That is, quite literally, the question that countless firms are asking themselves. It’s a quandary that feels somewhat unique to the profession, and it is amplified by the growing concern in the accounting industry that tax & bookkeeping work is going to be gobbled up by “bots” and bigger businesses. While I don’t necessarily believe these shifts are as eminent as the internet has made them seem, I do think there is a lot of compelling reason for firms to explore the idea of focusing their practice on a single industry vertical.
There is something fairly consistent to all business owners, and the majority of the population at large. We value the advice of experts. Especially when we need help with a problem we don’t have the skills to solve. When we find ourselves in these sort of situations, we seek out an expert (most likely via the internet) to guide us. When our marriages are broken, we search for marriage counselors. When our car breaks down, we look up specialized mechanics. And in the case of wineries that need help with their financial performance, they find Geni Whitehouse of Brotemarkle, Davis & Co LLP, an accounting firm that works solely with clients in the wine industry.
“Having the freedom to focus on a single industry makes it easier for us to identify opportunities to add real value to our customers. We listen to our customers and try to help them achieve their goals. When a law changes or new technology arise, we can immediately identify the impact on our customer base and help them accordingly. For us, it is about elevating the industry in which we serve, and everything we do comes from that perspective.”
Clients seek Brotemarkle, Davis & Co. out because they are positioned as an expert in their unique industry. It undoubtedly has upped their value to clients because they can seek out and find their specialized wine industry expertise rather than having to sift through all of the firms in their area. Brotemarkle, Davis & Co. LLP only competes with other firms with wine industry expertise, of which there are few. The clients they serve are connected to others in the wine industry, which leads to a consistent stream of referrals.
However, focusing on a niche vertical isn’t just about creating value. It is also about creating a practice that is passionate about and able to align directly with the needs and goals of their clients. One stand out example of this alignment can be found in Patti & Scott Scharf’s practice, Catching Clouds, which focuses solely on working with e-commerce clients that are generating $1-50 million in annual revenue.
“We are really clear about the kinds of clients that we work best with and it helps us create our marketing because we know exactly on who we’re talking to, and more importantly, it helps us identify who we’re not going to be working with. It is because we say no to the [clients] that don’t fit that makes us such a great provider of services to the people that are a good fit.”
Firms that focus directly on a single industry know something that a lot of other firms don’t: they know how to say no. In doing so, they can say yes to the opportunities, clients, and work that directly aligns with their firm's vision, values, and expertise. It is this ability that makes these firms more agile than other practices that are trying to be everything to every client, and it allows them to provide specialty services, at an expert price, to the exact clients they want to engage.
There are a lot of other firms out there. One of the most straightforward things your firm can do to get noticed by your ideal clients is branding yourself & your services as built with their unique industry in mind. After all, when clients go searching for a bookkeeper or accountant, it’s likely the first thing they’ll type into google is something along the lines of “Bookkeeper For Beekeeper” or “CPA for Creative Professionals.” Having a specific vertical & a standout brand means that the clients you’re after will not only be able to find you, they’ll also be able to tell that your services are tailor-made for them.
Deciding on what particular niche to focus your firm on & rebranding yourself is not something that firms should take lightly, but it is something should consider implementing if you find yourself continuously working with clients you can’t stand or failing to stand out from other firms. Regardless of what industry you decide to devote your firm’s energy towards, there are four things to keep in mind as you consider what industry to choose:
Your level of experience/expertise
The clients you want to say yes to
Where your firm can offer the highest level of value
If your firm can build a standout brand to that particular industry
If you’re looking at these areas and still feel completely unsure of where to begin, there are lots of incredible resources that can help you along the way. For example, Karbon has created a specific method to help firms identify an appropriate industry vertical, and there are many folks (myself included) that specialize in helping firms choose an appropriate niche & market their re-defined firm identity accordingly. It can also be valuable to seek out the thoughts of peers in the profession that have been through this process before you and can offer insight as to what has worked for them and why. It may seem like a huge process to change the focus of your firm entirely, and it is an important and worthwhile endeavor to embark on to future proof your practice & up your firm’s value. Though their chosen industries differ, firms that embark on the path of building a niche practice all come to share one thing in common: a practice that possesses deep & lasting value because they built a focused firm that aligns their unique industry expertise with the clients they love to serve.