4 Benefits of Finding the Right Niche

It’s flu season — conveniently coinciding with busy season. It’s time to stock up on cough syrup and analgesics to ward off the aches and discomfort of the flu. A visit to your family doctor might also be in order, if you can get an appointment. But what do you do if that ringing in your stuffy ear is a sign of hearing loss and not some flu-induced infection? What if those sniffles just won’t clear up on account of that broken nose you suffered last spring? Well, that’s when you visit the ENT– the Ear, Nose and Throat specialist. She sees patients who need more focused care. She’s managing a niche practice.

For many CPAs, setting themselves apart in a competitive market is a critical goal. The popularity of practice areas such as personal financial planning, IT specialization, fraud and forensic accounting, business valuation, tax and assurance services demonstrates the value that finding the right niche can offer. Here are a few of the many benefits that help explain why more CPAs are choosing to specialize.

1) Keep clients in the fold. Clients are impressed when a firm is ready to provide services they might never have anticipated needing. “When clients need business valuation for estate planning or a buy-sell agreement, we have that expertise on staff and they don’t have to look elsewhere,” notes Richard L. Craig, CPA/ABV/CFF, CITP, of 415 Group in Canton, Ohio. His 50-professional firm’s valuation and litigation niche grew from a small subspecialty to the market leader in northeast Ohio. When he got started, the competition “was mostly economists doing business valuation and litigation, not CPAs. We were in demand because we were better able to communicate in plain language with judges and juries. We found ourselves getting assignments even from attorneys we had previously gone against in court.”

2) Hold on to top professionals. At Martin & Associates in Cincinnati, the roughly 20-person firm has taught business skills to all its technologists. According to Kevin Martin, CPA.CITP, 100% of the practice is built around the customer relationship management (CRM) solutions leveraging the team’s accounting knowledge. “Clients might come to us when they need to implement a new inventory or sales order accounting system, or other business process,” for example, he says. “We understand the business and accounting side as well as the technology behind the solutions.”

The practice’s structure offers a strong staffing advantage. “Having the professionalism and ethics of a CPA firm with the fun of being a tech firm has made it easier to retain great people,” says Martin. Craig agrees that his specialty is also an asset in retention. “Having this niche gives staff members another area for growth,” he says.

3) Seize growth opportunities. The market for service organization control (SOC) reports is exploding. It can include providing services to industries ranging from investment fund administrators to health care billers to data centers or trust fund administrators. “It’s a service that is touching a lot of industries and organizations,” says Torpey White, CPA.CITP, of Wipfli LLP, in Philadelphia, Pennsylvania.

In fact, all the CPAs interviewed reported rapid growth for their niches. At 415 Group, for example, business valuation and litigation is a growing practice area, with higher realization of billable rates than traditional accounting services. “We’re also always paid up front,” Craig says. “We receive retainers on all work, and there’s no problem getting paid.”

4) Balance the workload. Many niches, including business valuation and technology, make it possible to spread work throughout the year and enhance retention opportunities. The same is true for White’s SOC practice, although the last four months of the year can be a busy time if clients request reports to be issued near year end.

What’s involved in launching a niche practice? A commitment to initial and ongoing education, and training for all professionals involved is one requisite. In Martin’s niche, “you need to spend about 300 hours a year getting smarter and keeping up with new software, upgrades or technologies,” he says. “The training requirement never goes away. If you stop, another firm and staff are going to pass you by.” Narrowing your focus can make it easier to stay current. “You have to define what you’re going to do,” Craig advises.

It’s also important to pick a niche that you love so that prospective clients are inspired by your enthusiasm. “Make certain that you follow your passion,” Martin says. “When you’re introducing something new that might represent a big change for clients, you need passion in order to demonstrate your excitement.”

If you’re considering niche practice options, the AIPCA can help get you started. The Private Companies Practice Section YOU Are the Value Workshop prepares you to articulate what you have to offer and can be used in conjunction with your strategic planning efforts to spotlight the strengths you can build into a successful niche.

In addition, you might want to showcase your expertise by earning a CPA specialization. The AICPA’s Personal Financial Specialist (PFS), Certified in Financial Forensics, Accredited in Business Valuation (ABV) and Certified Information Technology Professional (CITP) credentials and the Chartered Global Management Accountant (CGMA) designation can each help you stand out in the marketplace.

Mark Koziel, CPA, CGMA, Vice President, Firm Services & Global Alliances, American Institute of CPAs.

Specializing courtesy of Shutterstock.

4 Benefits of Finding the Right Niche

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