Gusto for Partners

To Go National, Get a Niche

Caleb Newquist Editor-at-Large, Gusto 
What's Your Specialty

It may come as a shock to some, but accounting firms no longer really compete at the local level. They compete at every level, with every firm, everywhere, whether they want to or not. Here’s what that means. 

I could have a firm based in rural North Carolina that specializes in serving plastic surgeons in Los Angeles, and probably do just fine. If I find clients via referrals and online ads, and meet with them over Zoom, it doesn’t much matter whether I’m in Santa Monica or Banner Elk. Lots of firms are taking that approach, and that means the localized generalists are coming under siege by the niche, national specialists.

And the question is, how are you going to stay competitive? My advice, and I’ve written about this a lot, is to finally go niche. And then go national yourself.

Today, a blueprint for what that might look like.

“National” no longer means you have to be big

The phrase “going national” used to imply scale. Scaling an accounting firm no longer means bigger offices in more locations. Size is not a strategy, after all. 

Technology has made geography largely irrelevant, and you don’t need lots of resources or people to have a presence in many places. You don’t even need offices. (Or, as the pandemic has taught us, business travel.)

Instead, “national” now implies following the strategy of seeking a very specific kind of client across all 50 states. 

How does one go about finding those clients when you can’t hobnob at every local chamber of commerce? Well, the first thing is positioning. Like my Banner Elk-based firm serving plastic surgeons, you have to choose who you’re for, and narrow. That makes you memorable and unlocks the potential for “word-of-mouth” referrals. Going narrow is what makes you what marketing author Seth Godin calls “remarkable” — a firm worth remarking about. Nobody remembers Bob’s CPAs for Everybody. They remember Yovana’s CPAs for Gainfully Employed Acrobats. A niche gives you a story. 

Look at firms that have successfully “gone national” and you’ll find they all share that trait.

“We began narrowing our service over a decade ago, to one particular profession — digital marketing, design, strategy, content, and development agencies,” says Julie Shipp, Partner and COO at Blumer CPAs, which serves clients in  35 states with 10 full-time staff. “First we had one client in our niche locally, and they introduced us to someone on the other side of the country. So we were sort of forced into going digital. They couldn’t just drop tax documents off. And we had to develop an airtight process for onboarding and managing clients remotely. And once we had a few figured out, we could repeat that.”

Now, narrowing is scary. It’s a risk. But to be for some, you have to not be for others. Saying you only serve pizzerias is to alienate fine-dining establishments. But not picking a niche has its downsides too. 

Every generalist firm’s clients are slowly being courted by specialists. Like Julie’s first agency client, they’re getting calls from friends saying, “There’s this firm that really gets us. They have a spreadsheet pre-loaded with metrics for exactly what we do.” 

Entrepreneurship author Ron Baker (discussed here) is fond of saying, “Bad clients drive out good clients.” That’s because those bad clients soak up your team’s hours and prevent you from being strategic, or knowing much about each of those company’s businesses. That leaves them poachable. 

Taking the leap

Here’s another thing niche national firms have in common: They tend to fire clients that aren’t the right fit. Sometimes en masse. This also might give you anxiety, but all these national firms will politely tell you that those low-paying, tax-work-only clients were dead weight. 

Blumer CPAs did this early on. They packaged up all their clients who didn’t fit their ideal model, or who didn’t want to go digital, and sold them to a local firm that wanted the business. 

The accounting company hiline also did this, as did Walker Lantz CPAs (formerly Launch Consulting). All survived. All are stronger for it.

“We lost some clients,” says Paul Glantz, Co-Founder and Director of Tax, about their transition from generality to specialty. “Some of whom we enjoyed working with. But there were surprises on both sides. Clients we thought would never agree signed without question.”

Remember, you don’t have to make the transition all at once. What convinced these firms that they could lose a few clients was they had such a steady influx of good, new ones. And you can arrive at that point gradually. To kick start it, consider hiring accountants and maybe even partners with an out-of-state book of business. Or offer non-accounting services such as virtual training, and then upsell the most successful students accounting service packages. Blumer has executed this rather successfully, and offers coaching, templates, and in-person events to agencies who’ll then need accounting help. 

Tips for taking your niche national

  • Hire out-of-state accountants
  • Take on a partner with an out-of-state book of business
  • Offer non-accounting services such as virtual training

You also might be wondering, “Are there certification concerns to going national?” Perhaps, depending on the level of regulation around companies you serve. But while accounting rules vary state by state, it’s less of a concern than you might think if you know how to Google. (Kidding. But sort of not kidding.)

“Honestly there aren’t too many complications,” says Julie. “Our licensing as CPAs is national in scope really. Though it’s accomplished at a state level (like most other professionals), we have the mobility to serve in other states. You just have to be good at research, and a team that is used to serving any clients in any state or local jurisdiction. Most accountants have the analytical skills that make this easy to do. If a firm runs into a complex locality with a weird tax setup, then the firm has to figure it out. It’s usually not a big barrier.”

One more benefit: camaraderie with other firms

When every firm competes for every client, there’s not a whole lot of reason to talk and help each other. But when every firm deeply specializes, they have a lot more reason to network. Each is likely to come across a lot of businesses it can’t serve, and to develop a referral network with others who’ll send clients to them. 

“‘A rising tide lifts all boats’ is certainly true when firms serve nationally and need comrades to troubleshoot their broader service,” says Julie. “One of the greatest things firms can do these days is have a trusted community of like-minded firms that share best practices.” 

So. Aspire to grow your firm? Want to go national? Go get a niche.

(You might find this webinar I did with Gusto’s Chief Revenue Officer Tolithia helpful for that — see below.)

Caleb Newquist
Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.

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