It’s a question a lot of businesses face: to specialise or generalise? In an increasingly competitive market, many accounting firms are choosing to focus their service offering to cater to a niche market, industry, or profession.
So is niche accounting a profitable move that will win new business, or is the risk of missed opportunity too big? Before making a concrete decision, ensure you’re informed.
What is niche accounting?
Niche accounting is when firms concentrate their efforts on a small but very specific segment. RGL, for example, specialises in forensic accounting for insurance, legal, and corporate clients who need an audit or investigation of a company’s finances – typically for court. Not For Profit Accounting Specialists (NFPAS) is another example of a firm that’s found its niche, servicing the not-for-profit sector exclusively.
Pros of running a niche accounting firm
Having a unique value proposition (UVP) [Link to: How your UVP can help you stand out] helps your business stand out from its competitors. By focusing on just one area, you can hone your skills and present yourself as a thought leader in the space. And with specialist expertise in your chosen market, industry, or profession, you can get away with charging a premium price.
It’s also far easier to tailor your marketing and maximise your advertising when you have such a specific target audience.
Cons of running a niche accounting firm
Focusing 100% of your time and energy in one space can have its drawbacks. You might have to say ‘no’ to potential clients seeking general accounting services – particularly if their business falls outside your area of expertise. You also run the risk of losing clients if you’re already established, but decide to move to a specialised offering.
You’ll also need to dedicate ample time and resources to building specialist knowledge of your clients’ sector or industry to be considered a genuine expert. Alternatively, you’ll need to invest in employees with specialist experience.
How to know what’s right for your business
As with any important business decision, make sure you do your homework first. Think about the clients you’re already servicing. Do you notice a trend? What about your background? Is there experience or knowledge from your past that you can use?
If you’re just starting out, identify any markets, industries, or professions that might require specialist services, then research any competitors already focusing on that niche. This should help you pinpoint any gaps your business could fill. It might also be beneficial to enlist the help of a trained professional or business advisor to assist with the groundwork, and then help you devise a strategy for the transition should you decide to go ahead with it.
After considering all these factors, you might conclude that your firm is more suited to general accounting services, targeting a diverse customer base. This could mean a lot more clients, but with many different problems to solve. Accounting software, like QuickBooks Online, can help you stay on top of all your projects and upcoming deadlines, and give you the training and tools to broaden your offering even further.
Servicing a niche market can lead to great success for some firms and accountants, but it isn’t right for everyone. Make sure you’re comfortable being an expert in a single area before you make the switch.
To learn more about where to take your firm next, check out these resources.