As automation and technology take over traditional compliance and bookkeeping activities, professionals working in advisory services are the future of tax and accounting. Adopting advisory roles requires an advanced skill set, expertise and dedication to continuous education to stay apprised of ever-changing tax codes, technology and more.
Even after those efforts, there is still a great need to differentiate yourself from other advisors, and a niche practice is a great way to target a specific market. Here is my list of the top 10 benefits of having a niche advisory services practice.
#1. A niche practice sets you apart. Providing industry-specific services immediately makes you different from general practices. Prospects are immediately attracted to a firm catering to only their specialized industry.
#2. You can reduce your marketing efforts. The average cost for a business-to-business lead in the financial services industry can range from $44 to $262. When your target market is fixed, your marketing efforts are more channeled and narrowed to the specific niche. In return, you will reduce your cost of acquisition per client. It should be easy to determine where your niche prospects network, where they gather to learn and their current pain points.
#3. You’re a subject matter expert. When prospects choose you because of your focused marketing and niche practice, they assume they are recruiting subject matter experts compared to tax pros working in general practices. You may automatically skip the industry knowledge discussion during your sales or onboarding meeting.
#4. You’re more focused. Niches narrow the area of attention required by tax and accounting practices, and reduce the need to keep up with tax law and compliance updates across a variety of industries. When you are confined to specific needs, you will increase the focus and efficiency.
#5. You’ll love what you do. With a niche focus, you’ll have the opportunity to choose the industries you’re most attracted to, allowing you to pursue your interests and do what you love the most. The result? Work satisfaction!
#6. Your team is more efficient, and you’ll produce quality work. Your positive demeanor also helps attract, hire and keep other professionals who share the same passion you do. Team efficiency may increase when all efforts are targeted to one specific area.
#7. You’ll strengthen your client relationships. As you get to know your target market, you’ll better understand your clients’ needs. Even before you onboard a client, you will be aware of many of their requirements, and you’ll be able to provide more value throughout your relationship.
#8. Your firm scales much faster. Having a niche makes growing easier because you are only growing in tried-and-tested areas. You’ll know your target market, eliminating the need for research or new marketing tactics.
#9. You can increase referrals from competitors. Because you concentrate in one or more industries, you may be surprised to discover that competing firms may start referring new business in areas they do not work in or have as one of their niche specialties. Since general practices cannot provide undivided attention to a particular industry, when they receive a client that needs very deep industry knowledge, they would likely refer to firms with niches.
#10. You can offer bundled services. One very important aspect of a solid advisory services practice is offering bundled services. When you have the knowledge no other firms might have, you can ask for higher profit margins because of the additional value you provide and avoid charging by the hour or by the project.
Develop your strategy
For an existing general practice, it may not be easy to transition. In such cases, you can choose a hybrid option of having separate small teams build their own niche. For example, my firm developed solutions for restaurants and sporting facilities, while still working with law firms and other clients. This strategy enables us to control and channel marketing, recruiting and training efforts.
To confirm the benefits of creating a firm based around a specific need, check out the conversation happening on social media. Whether it’s a Facebook group, Twitter feed or LinkedIn conversation, social media has one thing in common: Fellow tax pros active online will refer new leads to their specialized counterparts.
It has become more and more important to distinguish yourself by taking on the advisory role, and once you choose your niche and optimize your marketing efforts, you can create your own success.
Niche practices = Successful practices
Editor’s note: This article was originally published in the Tax Practice News.