Do you know how to get started with offering specialized accounting and advising services?
Specializing in a business vertical can draw in more clients to your firm as you bring more value to your clients’ businesses.
Gusto, along with our partners at CPA Academy, hosted a webinar about the importance of specializing and what first steps your firm can take to get started. Our webinar, “How to Add Revenue to Your Firm Through Specialization,” featured Dan Moshe, Founder and CEO of Tech Guru, and you can watch the full presentation here.
Dan had many critical insights about switching from generalized services to targeting a business vertical that he gained through his experiences with Tech Guru. Tech Guru offered IT services to companies across many industries, but they realized that specializing would be more beneficial for their business. They began catering their services specifically to CPA firms and enhanced their revenue in the process.
What first steps can CPA accounting firms take to specialize?
Focusing on a particular business vertical can have many benefits for your firm including a simplified workflow, more clients, and increased revenue. But many accounting firms are unsure where to begin. Dan Moshe noted that the most important first step your firm can take when specializing is simply committing to take action:
“Just commit to taking one small step. Maybe it’s putting an agenda item on an upcoming partner meeting agenda. … [Maybe it’s] sending a text or an email to that favorite CPA friend of yours and asking what they feel and what they think about … specialization. Maybe talk to somebody or a firm that already … specializes and get some feedback and ideas from them.”– Dan Moshe
Focus on taking small steps toward specializing rather than letting yourself feel overwhelmed by the process. Dan also recommended that you evaluate what could potentially put you out of business. Dan’s company Tech Guru decided to specialize when they were in the process of considering what could bankrupt their company:
“The question we asked ourselves … [was] ‘If a business opened up next door and put us out of business in a year, how did they do it?’ … It’d probably [be] two dozen specialist IT firms that moved in next door into our building and took every one of our clients. We’d be out of business in a year easily. We said, ‘Well, how can we prevent that from happening?’”– Dan Moshe
Tech Guru realized that they needed to make the leap into specializing because specialists were their weakness. They were already losing clients because of IT specialists targeting their customers’ specific business verticals, so the process of asking themselves what could put them out of business led them to target a particular niche.
Another helpful process for determining your first steps into specializing is considering how an expert leader would approach the situation. Dan observed that specializing can seem intimidating, but a leadership expert would take the risk despite the fact that it’s challenging:
“What if we hire other professional leaders with a proven track record of success and really kind of think outside the box? What would they do in this situation? What would this hired professional CEO do with this information? We said, ‘They would specialize, even though it’s kind of scary and we’re still trying to figure things out.’”– Dan Moshe
Specializing can be challenging, but it could be the best direction for your business. Tech Guru increased its revenue and enhanced its ability to gain new clients through specializing. As an accountant, you can focus on a business vertical and become an expert advisor in that field. Rather than focus on many different industries, you can become a people advisor for your target niche and advise clients in people-based operations, such as HR, payroll, and benefits.
How do you pick a business vertical?
You can choose your optimal business vertical by evaluating your current clients and discussing potential niches with other accountants. Dan recommended that accountants discuss business verticals with peer organizations. Additionally, you can research possible niches to figure out what’s right for your firm:
“Access some of the content that you may already have … with regards to finding a niche and doing some specialization. Another thing is you may already have access to industry reports through a subscription you might have. … Pull a couple of industry reports and read up on a couple of industries and look for one that’s got some positive growth trends [and] maybe some complexities that you are uniquely positioned to be able to help with.”– Dan Moshe
You can choose the vertical that’s right for your firm by evaluating your current contacts and customer base as well as what industries are growing. Your firm could be uniquely positioned to assist certain industries. Dan and Tech Guru chose to specialize in accounting because they had existing accounting clients, they knew accountants would value their services, and they wanted to become one of the top providers for accounting IT services.
Should you serve a client who doesn’t use your firm’s standardized accounting applications?
When deciding to partner with a particular industry, you also need to decide whether to specialize in specific accounting software. One of the viewers of Dan’s presentation asked whether their firm should help migrate clients from Sage to QuickBooks or Xero. Dan noted that the decision to migrate clients depends on the overall direction of their firm:
“The question really is which direction do you want to go. … Does it make sense for you to migrate and help those clients migrate from Sage? … It might be a little bit more complex to help them migrate. … If they’re not willing to move and migrate to where your firm is going and has standardized on, maybe you know a CPA that specializes in Sage and can really help them be successful with that and ultimately help them move forward.”– Dan Moshe
If your client wants to remain on an application outside your firm’s standards, you can redirect them to another accounting firm.
How do you handle existing clients who don’t fit your desired niche?
Again, this comes down to the overall direction of your firm. Currently, Tech Guru still serves companies outside of the accounting industry, but Dan recognizes that may not always be the case:
“More of our clients are actually not CPAs than are. We continue to give them the great service that we always have over the years and then continue to work with them. The thing is, we’re not adding any non-CPA firm clients at this time. Ultimately, we’re going to get to the point where it’s almost a distraction. At that point, we’ll have to make a decision about how we want to move forward.”– Dan Moshe
If you specialize in a business vertical and the other clients outside of your target niche begin to take away from your specialized services, you may need to drop them as clients. Dan suggested the possibility of partnering with other organizations to assist clients outside of your target vertical:
“It might be something where we partner with another organization or help clients find something that’s a specialization for the type of organization that they are. In the meantime, we continue to serve them. We just can’t go quite as deep and quite as in-depth as we would with our CPA firm clients, but we’re still adding tons of value and helping them.”– Dan Moshe
You may not deliver as much in-depth value for clients outside of your target niche, but you can still help them with their businesses.
Can you specialize when first starting a company?
Although many firms start with generalized bookkeeping and accounting services, you can create a company with a business vertical in mind. Dan noted that he would focus on a niche if he started a new company:
“If I was starting up a new technology company today, I would just start it with that specific industry vertical. … I think instead of having to reinvent yourself starting as a generalist, start with an industry niche from the beginning. It solves so many of those startup challenges. How do I get new clients, and who do I work with?”– Dan Moshe
Starting with a specialty will direct your business’s attention to your ideal clients rather than trying to serve everyone. With a specialty in mind, you can have more focused marketing and a more precise direction for your business. Startups are often desperate for new clients, but taking on clients in many different industries can hurt your business’s long-term success:
“The pressure in startup mode is always, ‘Boy, we need to get new clients. We’re just going to take anybody we possibly can,’ but that really dilutes the value and dilutes your energy. I’d say anybody … who [has] a startup and wants to specialize, your efforts will be rewarded much greater, and the growth will be faster … if you start to specialize literally from the beginning.”– Dan Moshe
If you’re looking to start an accounting company, consider targeting a particular business vertical rather than offering generalized accounting services.
What marketing strategies generate high-quality leads?
Finding new leads in your business vertical is critical for your firm’s success. Your marketing strategy for generating leads will likely depend on your target niche. You should consider the industry and where members of that industry will hear about or seek accounting services:
“Understand the target market and decide where and when [is] the time for us to be able to be in front of our audience. In some industries [it] may be online and Facebook and LinkedIn and things like that. … It really depends on the industry vertical that you’re in.”– Dan Moshe
The marketing will depend on the industry and the members of that industry. For example, if your target vertical is comprised of young people, it may be helpful to market services on a platform such as Instagram.
If you’re unsure where to start with generating leads, you study the approaches of other businesses who are targeting the same niche:
“Look and see what others who are marketing to that selected vertical, look and see where they’re at and where they’re getting results if you can figure that out. … Try something out, dip your toe in the water, see how it works, and measure the result. Then if it works, do a little more and a little more. We really stray away from [making] major investments.”– Dan Moshe
You can follow the example of others targeting the same business vertical and start making small investments to see if you get a desirable return on investment. For example, if you’re targeting small business restaurants and you notice foodservice suppliers connecting with restaurants at conferences, you should also consider taking that approach to make new connections. Invest a small amount of your company’s resources to test if a particular lead generation method brings in new business, and increase your investment if it works.
Learn more about specialization in accounting
Specializing can bring valuable new opportunities to your accounting firm. Consider taking the first steps of targeting a particular niche by committing to action this week. You can start by discussing the strategy with your team or investigating potential verticals. After choosing a target industry, you can enhance your lead-generating strategy by observing how others connect with your target niche.
If you would like more details about specialization in accounting, you can watch the entire webinar with Daniel here. Also, be sure to keep an eye out for the other articles in this webinar series “The Benefits of Accounting Specialization: Tech Guru Case Study” and “Establish Yourself as a Trusted Accounting Partner Through Specialization” for more information about specializing your firm to better serve clients.
Your firm can improve its relationship with clients and increase revenue by offering people advisory services. People advisory assists small businesses with people-based operations, such as HR, payroll, and benefits. Your clients need more than an accountant. They need an advisor. As a people advisor, you combine your financial expertise with people-focused advising. Gusto has the tools to help you do just that. Learn more about People Advisory.