Many accountants know why it’s important to specialise but there seems to be a lot of uncertainty as to when. This article aims to help you decide on when it is best to find your accounting firm niche. “Should you have a niche as soon as you set up your new firm or should that niche find you over time?”
The benefits of choosing a niche
Whether you’re a new firm or are well developed and want to focus your marketing to win bigger and better clients, choosing a niche can offer you many benefits. For example, a niche can;
- Help you make informed and therefore more effective marketing decisions.
- Give you a better return on investment.
- Get you more bang for the buck.
- Help you to be more in demand than generalist firms.
- Increase referrals potentially even above your competitors who have more experience, better credibility and a better track record.
- Allow you to charge higher fees.
- Result in you working with the clients that you actually want.
Being the go-to expert for certain accounting firm niches makes you more memorable and credible so that you can win more business, so why doesn’t every accountancy firm specialise straight away to benefit from this? (see Is marketing yourself as the expert, good or bad?)
Common misconceptions and reasons not to choose a niche
When it comes to choosing accounting firm niches for your firm, and even in every other sector of the business industry, many owners get caught up in common misconceptions. Here are a few of the biggest misconceptions and beliefs:
- You can’t accept clients outside of your niche - “If I’m only focusing on one niche then I can only service people from that niche”
- It’s too risky - “What if a new regulation within that niche wipes us out overnight?”
- It’s too early to know what’s going to work or not work - “With a new accountancy firm, it’s better to go broad first to find out what works.”
These misconceptions prevent many accountancy owners from specialising and winning better clients when in reality:
- You can absolutely accept opportunities outside of your niche - you just don’t actively spend your time targeting them.
- Regulations are introduced in every sector and niche all the time. But you’ll get a good level of warning beforehand. Think how long we’ve known about the planned changes to IR35 for contractors.
- Going broad just prevents you from standing out from your competitors and winning referrals to non-price sensitive clients.
To niche or not to niche and when to niche?
We’ve already established that committing to a niche is essential to grow your accountancy firm, winning you bigger and better clients; it’s the when to specialise that isn’t as easy to answer.
With a new accountancy firm, if you specialise too early, you risk not making a good choice of sector and not building up the broad base of experience, contacts, clients and technical skills you need. On the other hand, if you don’t specialise and you go too broad, you risk being too general and losing referrals or clients going to your competitors because they are the specialists.
So which is it? Do you choose your niche now or later?
Unfortunately, there’s no magic answer. The answer depends on your practice, your experience, technical expertise and even the sector that you’re in.
It is obviously beneficial for you to choose your accounting firm niche sooner rather than later as the quicker you focus, the quicker you’ll steer your business in the direction that you want. But it needs to be the right time for you.
To help you get to the point where you feel ready to specialise, here are a few things that you should be doing even if you’re a brand new accountancy firm:
- Think about accounting firm niches - a niche could be sector-based (e.g retailers), demographic-based (e.g local businesses), or size-based (e.g local businesses between half a million and two million).
- Do your research - What is out there and what is working for others? Read books, listen to people who are go-to experts in helping businesses choose their ideal client, and have conversations. While it’s important not to do what others do just because it worked for them, it is really useful to take their business advice on board to make it work for you and your firm.
- Think about your ideal client - when looking at accounting firm niches, think about who is the best type of client for you; they can often help you choose the best niche for your firm. Your best clients will be people who you’re passionate about and enjoy working with. If you don’t know your best type of client, use tools to help you such as our guide to creating your client persona.
- Think about your experience - what’s your background? Did you come out of an industry, so you instantly have credibility in one type of business? Or did you come out of your own practice?
- Always consider the future - what types of clients do you really want or would like to work with? What’s their type of business? Are they traditional or new? What service do they want?
One final note on accounting firm niches
If you’re a new accounting firm and you don’t know when to choose your niche? We recommend doing it as soon as possible.
In the early days, you don’t have to be super focused with your niche, you just need to narrow it down enough that you stand out from your competitors and win those referrals. You can go broad and take on contractors and sole traders to pay the bills if you need it, just make sure that you’re always doing your research at the same time and trying to specialise.
From my experience, whenever I have taken the step to get more targeted with who I want as a client, my business has gone up to the next level. So be brave, think about who your target client really is, and your marketing efforts will soon start to win you those clients.