General accounting may seem like the best way to get a wide range of clients. However, it may not be the best option for a business. How do accounting firms make money? Niching down, or specializing, can actually be more profitable and worthwhile for your accounting firm. In this post, we look at the benefits of choosing an accounting focus.
What is an Accounting Niche?
A niche is another word for specialty. It’s a segment of the larger accounting market that targets a specific client and their pain point. Just like physicians can target gynecology, podiatry, radiation, or internal medicine, and engineers can target electrical, mechanical, and civil, accountants can also hone their skills to offer specialized services to their clients.
What are the Benefits of Choosing an Accounting Speciality?
Choosing to specialize instead of offering a general list of services seems to go against conventional wisdom. Many think that the easiest way to become a successful accounting practice is to open your doors to as many clients as possible. When you niche down, you automatically close the doors to potential business. Is that really the best option if you’re hoping to grow your firm and build a brand for yourself?
Yes. Intentionally narrowing your scope can be the best thing you’ll do for your accounting business. Here’s why specializing is beneficial:
You Can Become an Expert (And Charge For It)
When you choose a niche, you can operate as a specialist. That means that you can charge more money for your services. And you can leverage your specialty branding to build trust with your prospective clientele.
When you market yourself as a niche accounting service, you convey the message that you’re more knowledgeable in key areas than other accountants. Your prospective clients will immediately view you as the expert they need to solve their accounting problem, even before you start working for them.What are the benefits of selecting a niche for your accounting firm? Click To Tweet
It’s also true that the more you work in your specialty, the more knowledge you’ll gain. Even if you’re just starting out in your accounting niche, you’ll quickly gain a lot of knowledge simply because you’re working exclusively in this specialty.
As an authority, you have the ability to charge a premium for your expertise. You can justify the premium price because you will be able to solve your client’s accounting problem quickly and efficiently.
Attract More of the Right Kind of Clients
Position yourself in your niche to find clients who know exactly what type of service they’re looking for.
Think about lawyers. All lawyers know the basics of the law, but a real estate lawyer will know a lot more about landlord/tenant rights than a criminal defense lawyer. A client who needs legal advice on developing a lease agreement wouldn’t seek out a defense attorney. It’s not that the defense attorney doesn’t know the law, it’s just that they’re more versed in a specific area of the law. When a client is looking for specialized advice, they go to a trusted and experienced source.
In the same way, you can position your accounting firm to be a specialized source for prospective clients who need the services you offer.
Here’s another way of looking at it: You likely prefer some aspects of accounting over others. If you love forensic accounting but hate dealing with taxes, consider specializing in the former. Not sure what type of specialty to consider? Don’t worry. Later in this post, we’ll look at the most popular types of accounting niches to consider.
Narrow Your Field of Competitors
When you operate as a general accountant, it’s true that you have a larger pool of potential clients. But it’s also true that you have a larger list of competitors. This is a major drawback to operating as the do-it-all accounting service. This may not be as big a deal if you’re already established as an accounting service with years in the game and have a roster of repeat clients who are happy to do business with you. However, if you’re just starting an accounting firm, you need a competitive advantage to attract new clients to you.
For a moment, let’s consider how you discover new services in your area.
If you’re looking for a general service, you may ask people you know for recommendations, or you may head to Google and check out reviews before you decide to go with one service over the other. However, if it’s a relatively new service, they may not have any word of mouth or Google reviews. When faced with an unvetted service vs an established one, you’re likely to go where the recommendations or the numbers are.
However, when you’re looking for a specialty service, there aren’t as many options to choose from. There may be fewer reviews and little to no word-of-mouth. Instead of reviews and popularity, you may have to rely on your own research to discover the right option.
The same can be applied to your accounting firm when you specialize. Instead of having to differentiate yourself among dozens or even hundreds of other accounting firms, when you specialize, you may only need to compete with a handful of others. This gives you a greater chance of winning new clients.
Deeply Understand Your Clients
When you specialize, you get a chance to focus on a specific set of accounting areas. Instead of being a jack of all trades, you can be a master of a few. Specializing allows you to deep dive into the most common problems that your clients face. You can use this enhanced knowledge to come up with innovative solutions to accounting pain points.
Choosing Your Accounting Specialty
We’ve discussed four great benefits to choosing an accounting niche. Now, let’s look at the most popular accounting niches to consider and how to decide which one may be best for you.
When it comes to accounting, you can specialize in three main ways:
One way to specialize is by offering a specific set of services, such as taxes, bookkeeping, payroll, and auditing. Instead of offering all of these services, you can decide to narrow your scope.
The second way to specialize is by targeting a specific type of client. You can work exclusively with individuals or with businesses. If you opt for businesses, you can work with the self-employed, small businesses, or large corporations.
Third, you can further specialize based on the type of industry you prefer to work with. For example, if you work with businesses, what type of businesses should you work with? Restaurants, retailers, technology, law firms, non-profits, charities?
Not sure which way to go? Consider who you work with already. The clients who are already attracted to your accounting brand may hold the key to who you should focus on as you niche your accounting services. If you enjoy working with these clients and helping them solve their accounting problems, consider making it an intentional business strategy. Take a close look at your best clients. Can you group them by industry or type of service? That may answer the question.
Top Accounting Niches to Consider in 2023
Here’s a look at the most lucrative and popular accounting specialties to consider, broken down by industry and by service type:
Medical and Dental Firms – More and more doctors are starting independent practices, and can use the help of an expert accountant to manage their financial records.
Entertainment – The entertainment industry is growing as the Internet has made countless overnight celebrities. Help YouTubers, Tiktokers, and Instagrammers become financially sound.
Real Estate – In the past few years, the real estate industry has experienced a huge amount of growth. Help new investors handle their accounting needs.
Restaurants – Restaurants are amongst the most popular types of businesses. You can become the go-to accounting firm for restaurants in your area.
Other industries to consider include:
- Law firms
- SaaS (Software as a Service) and Software Companies
By Accounting Type
Auditing – Become the independent, third party reviewer for a business’ financial statements.
Business Accounting – Record transactions and prepare financial statements for businesses.
Forensic Accounting – Provide investigative services to track down potential and/or suspected financial fraud.
Tax Accounting – Plan and prepare tax returns for businesses, individuals, or both.
Other types of accounting include:
- Cost accounting
- Family planning
- Fund accounting for non-profits
- Government and political campaigns
Defaulting to a general accounting firm is always an option, but it may not be the best option for you. Don’t feel that your only option is to spread yourself thin by offering a variety of standard accounting services. You can narrow your focus and win more business by offering niche accounting services. By doing so, you’ll automatically position yourself as an expert and set yourself apart from other accounting firms out there.
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