in the section: Day to day management tips
Niche is not an ugly word
A core component of marketing an accountancy firm is figuring out which clients to pursue. I think it's worthwhile investing the time to give this a good thinking, regardless of the stage of your firm.
Consider the following approaches:
- Firm A: opts to focus their accountancy business in supporting overseas companies wanting to expand to the UK
- Firm B: works with any company that comes to them
For a firm that has the ability to choose either of these options, which would you choose? Would you focus on a niche market segment, or decide to go broad?
This is a decision similar to one we had to make a few years ago. Although we weren't an accountancy firm, the thinking process is very much the same. We focused on a niche to great success.
Niche is good
In a world of bigger is better, the word niche is too frequently used to dismiss perfectly viable ideas and business opportunities. Self limiting. Small-time thinking. For others it's also scary: won't it be harder to close business in a small market with fewer buyers?
To appreciate the benefits of operating in niche markets, let's go back to the situation above and review some of the upsides of Firm A's decision:
- All their customers look for the same set of services and face similar challenges, making it possible to hit some economies of scale
- The firm's marketing messaging resonates with their target audience right away
- A client that is expanding internationally is a cash-rich client, less price sensitive
- Easy to explore channel partnerships (eg. law firms), and event participation (eg. UKTI, etc.)
- Less competitive pressure (it's a niche after all)
- Developing a deeper understanding of the services/outcomes sought after by that similar set of clients creates competitive advantages
If my 3x experience of being on the "expanding client" side is anything to go by, a monthly retainer of anywhere between £500-£1000 is a no-brainer choice. I have found that fewer but higher paying clients makes for a great, less stressful business!
On the other hand, let's say we opted to provide standard bookkeeping/compliance services to a broader market. It'll be a bit harder to rise above the noise other firms also make - and everyone's making it!
A firm that chooses to handle only the commoditised work will eventually find themselves in a race to the bottom in terms of pricing, willingly or not. Can't escape the laws of (market) physics. If you're able to stomach the stress and/or client churn, with the efficiency delivered by technology it's still possible to make a good profit.
Dip your toes first
A very nice thing about this strategy is that getting onboard has very little risk. You can start by identifying what's the one type of business you and your team really understand today and what services you can offer to them. Once it's clear for everyone, try crafting a pitch in line with that type of business. Next try closing 2 or 3 new clients in that niche over the next couple of months.
I think you'll be surprised at the results.
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