Starting your own accounting firm was a good first step into professional independence, but now you’ve come to a fork in the road: Should you offer general accounting services or specialize in just one field? If you’re just starting out, staying generalized might seem like the smart bet. If you can build up a good mix of private and professional clients, you should be pretty well-buffered against the inevitable downturn in one field. Setting up as a boutique accounting firm has its own advantages though, and you might wind up specializing in just one kind of accounting service as your career matures.
Terms can be confusing sometimes, so it’s best to be clear. Accounting firms very rarely fall into neat, well-marked boxes labelled “general services” or “IPOs-only.” Instead, most firms fall somewhere between these poles, with a few preferred areas of practice but a general willingness to take any client who comes through the door. You might, for example, really like helping new businesses get startup capital in Iqaluit but find there aren’t really enough entrepreneurs in Nunavut to do that full time, and wind up spending 20 percent of your time on startup business financing and the rest just doing payroll or filing taxes for ordinary people. If you do wind up finding a full-time niche you enjoy, it’s worth considering the benefits and the risks of becoming a boutique accounting firm.
Pros and Cons
As you weigh the pros and cons of specialization, remember that times change and so do markets. If you hyper-specialize in filing foreign tax returns, for instance, a single rule change at the Canada Revenue Agency could fold those into the domestic market and wipe out your entire client base overnight. Remember to ask yourself whether the pros and the cons you’re considering now are likely to hold true 10, 20, or 30 years in the future, when you’re thinking about retiring.
- Specializing in a field often lets you charge higher rates for your services. People generally pay more for a tax specialist when they’re facing an audit, and you can capitalize on that.
- Developing a reputation for excellence in a single field could draw business to you, rather than you having to go and look for it. Your reputation as Canada’s ranking expert in mergers could have other accountants referring their own clients to you when that’s the service their clients need.
- Boutique accounting firms enjoy a measure of job security; for as long as their field exists, their services are in demand.
- Boutique firms can also be insecure. If changes in your field make your special skill set obsolete, you might have to head back to school to learn new skills.
- Niche accounting firms sometimes have to turn away business.
Tighter Focus, Higher Profile
Consider what a focused approach can do to your reputation. While it’s certainly gratifying to be the go-to expert in forensic accounting or data security, being the best in Canada raises your profile quite a bit. Where a generalized accountant can usually handle a few small mistakes on tax forms or uncrossed-Ts in a contract, the country’s foremost expert in blockchain audits will certainly attract attention if he accidentally undervalues bitcoin.
Marketing Your Boutique Accounting Firm
If you’re sold on boutique accounting, think about how to market yourself. Niche marketing is a study all its own, but you should at least think about joining professional networks and periodically conducting market research to focus your efforts on the most productive potential clients you can find.
Adopting a focused approach can make your boutique accounting firm wildly successful. But be aware of the risks, and carefully consider your options.