If you’ve been watching my videos, reading my articles, or going through the Firm Builder Challenge (my free course in The Entrepreneurial Accountant Facebook group), you’ve heard me talk a lot about the importance of specializing in working with a specific type of business owner.
I talk about it frequently because I believe that picking a niche and positioning yourself as an expert in that market is crucial to growing a thriving accounting firm or tax practice.
I spend a lot of time talking about why you should pick a niche, which are the most profitable, and how to pick the best one for you based on your goals, but I also get a lot of questions from people who are confused about just what exactly a niche is.
Today, we’re going back to the basics to make sure everyone is on the same page about what a niche is and why they’re so critically important to attracting the best clients.
The Importance of Specializing
A lot of new firm owners assume that the best way to get lots of business is to do business with everyone and offer as many services as possible.
It’s not. That is a recipe for burnout and, ultimately, failure. If you cast a wide net and try to work with everyone who walks through the door, you’ll find that the only way you can compete is on price, and you’ll take on a lot of low-paying, time-sucking clients as a result.
The best way to overcome this is to work in a specific niche. A niche is a small segment of the market that you choose to focus on.
You may have noticed that we work with self-employed dentists and dental practice owners. That’s a niche. By choosing to work with some people and not others, I’ve narrowed my focus and crafted a targeted marketing message that resonates with my ideal clients.
Benefits of Picking a Niche
There are many benefits to niching your practice. By narrowing down the type of work you specialize in, you can:
- Focus your training and continuing education
- Build a reputation as the go-to expert in your market
- Stay on top of industry changes
- Learn new tools and apps that can help you better serve your clients
- Increase your value as a consultative expert
- Focus on doing the work you really love doing
What Kind of Niche Should I Pick?
There are two basic ways you can choose to specialize. You can either specialize in serving a specific type of client, or you can focus on offering a specific type of service.
Many accounting and tax professionals pick an industry niche. They choose to work with business owners or self-employed professionals in a certain industry vertical.
For example, you could specialize to work with dentists or lawyers or real estate investors. Focusing on an industry niche makes it easier to gain expertise and build credibility.
You can also decide to focus on offering a particular service or combination of services.
For example, some accountants choose to specialize in complex areas of practice, such as tax strategy or business valuations or litigation support.
You might choose to focus on bookkeeping, tax prep, strategy, or even something like payroll, job costing, or inventory tracking, which many other accountants avoid.
How Narrow Should I Focus My Niche?
A lot of my coaching clients are initially intimidated by the prospect of getting super specific when it comes to defining their ideal clients and how they want to serve them.
However, if your pricing model is right, you only need a total of 75 clients to gross $1 million per year in revenue.
So it may seem scary at first to get really specific and focus on serving a smaller market, but I assure you that there are plenty of quality clients in niches that might feel too narrow at first glance.
If there are at least 10,000 people who you’d consider ideal clients for your accounting practice, there is more than enough opportunity to grow your business to $1 million annual recurring revenue.
Getting really specific in identifying the type of client you want to work with allows you to specialize in the strategies that your clients can most benefit from. You’ll become an established expert with value that your competitors simply can’t match.
Becoming an Expert
What niche will you choose? What kind of clients do you want to serve?
Can you start to see what kinds of businesses are a natural fit for you and what you could do for them? Do you recognize how niching will help you establish yourself as an expert in your area?
Hopefully, this clears a few things up for you about niches and why they’re important. Now, the only question left is how you will choose to pronounce it. 🙂