Offering general accounting services might make it easier to appeal to a wider range of potential clients. But servicing a specialty accounting niche makes it easier to sell your services, command higher prices and work only with clients you truly enjoy. And when you're happier in your work, you get better results for your clients, and that leads to more referrals.
While it takes several years for most firms to find their niche in the marketplace, several firms I know were started specifically to serve a designated niche from day one. And that meant turning away potential clients that didn't fit their mold. They didn't just talk about it (like most firms) — they actually did it!
Brittany Brown, founder of LedgerGurus, specializes in sales tax issues for e-commerce companies. Brown started her career doing taxes for a local CPA firm and "cried every day" at her job. So, she started her own firm, and as it started to grow, more and more clients were asking for help with their sales taxes.
At first, Brown tried partnering with firms that specialized in sales tax, but did not have good experiences with them. "If we were going to make referrals to our clients, we wanted to be able to really stand behind those referrals," she recalled. "We found we just didn't have an option that we could stand behind." So, they brought in a specialist, Kexin Smith, specifically to do sales tax for all types of businesses.
"I once heard a conference speaker say if you're going to pick a niche, you should pick a niche that has high barriers to entry," related Brown. "E-commerce clearly has barriers. There is a lot of complexity, and it's fundamentally different from other accounting in a lot of ways." Plus, there can be serious penalties, including jail time, for things like collecting money from customers in states in which you're not registered, she added.
Brown discovered that sales tax was either something that very large organizations had internal support for, or there were niche providers filing in one or two states for other companies. But there wasn't anyone with the ability to file and register in almost every state and manage all the complex moving pieces. That is, until LedgerGurus came along.
And things have mushroomed from there.
Chart of accounts leads to niche
After selling one of his businesses and trying to figure out what to do next, Michael Alliman, a serial entrepreneur and cost accountant by training, was dabbling in a bookkeeping service primarily for his friends and friends of friends. Through that network, he met a woman who coached agents for the sprawling Keller Williams real estate company, which has over 100,000 agents throughout North America. The coach was frustrated because her agents either didn't have P&Ls, or if they did, they weren't in the standard format required by Keller Williams. That made it very hard for the firm to compare its vast network of agents and teams.
Alliman told her he could set up a custom chart of accounts for the firm's agents, but it would require a premium fee because that chart of accounts was so specific he wouldn't be able to use it for any other clients. It required everything to be broken down into one of nine expense categories, and every entry had to fit under those categories. The coach agreed, and word got around. "You start with one Keller Williams real estate agent. They refer you to others." And that was the genesis of Alliman Business Group, which has built a very profitable and sustainable bookkeeping business at a starting price of $179 per month.
ABG clients include everyone from single agents closing a few deals a month to a diverse team generating $4.5 million in annual revenue. ABG now has about 100 bookkeeping clients, plus several advisory-only clients.
Instagram and physical fitness
Half a dozen years ago, Sandra York was a burned-out middle-aged senior manager at a Top 100 accounting firm. Without another job to go to, she quit her firm and took a few months to figure out what to do next.
To help keep her sanity during this transition, York, a lifelong fitness buff, increased her workouts and talked or messaged daily with a close friend who is a personal trainer. The friend told York she loved being a personal trainer, but she hated doing the books. As you can imagine, personal training and certification courses don't provide any instruction on how to manage finances, how to run a business, or how to do bookkeeping or taxes.
York learned that personal trainers are often surprised at the end of the year at how much they owe in taxes and sometimes don't have enough funds to pay. In response, the trainer asked York if she could build an online course for trainers to teach them how to do the financial aspects of running their practices.
"I thought it was a very interesting idea, but didn't know how to create an online course, much less market it. So, I just kind of sat on that idea, and my friend would prompt me every six months or so," recalled York.
Around the time York left her full-time job, she opened a personal Instagram account to share photos of her family and dog, etc. She also started following accounts based on her passion for health and fitness, running, weightlifting and the great outdoors. She stumbled across a physical therapy specialist who was offering high-quality free instructional videos to people with various ailments. The videos contained restorative exercises to try, and asked followers to contact her if they helped.
Intrigued, York followed a similar approach, producing free Instagram videos to help personal trainers learn how to run their businesses more professionally, particularly in the financial end. Her "Free Coaching Friday" videos led to paid coaching consultations, and those consults became regular clients.
"We'd do a Zoom call and talk about whether or not they should be an LLC, how they track their income and expenses if they're not already on QuickBooks and whether they need separate bank accounts. Before she knew it, York had over 150 personal trainers as regular clients.
Brandon Hall (a.k.a., the Real Estate CPA) provides tax compliance, accounting and CFO services to real estate investors and landlords nationwide. Clients range from single-property owners to those with 10,000 rentals.
Like York, Hall is also aggressively building his niche practice through online courses. He has long felt there's too much bad advice in the real estate sector, even from tax advisors. "Many don't understand passive activity, loss rules, partnership structuring, etc.," noted Hall, adding that advisors aren't doing a very good job of addressing these complex rules in their clients' tax returns. "So, I had this idea. If we created digital courses for landlords and real estate investors about these complex rules and sold them to people, would they buy them and eventually become clients of our firm?"
Long story short: Yes, and yes.
Hall's four-week, 12-session online courses teach landlords and real estate investors how to "gut check" the work their accountant is doing for them. "So instead of just signing your tax return and hoping it's correct, we're going to give you specific places to go to make sure your tax professional is doing a good job. And we're going to teach you about those rules in a way that you can digest them," Hall explained.
And eventually roughly 10% of course takers become Hall CPA clients.
If you want to build a successful accounting firm, you don't have to adhere to the all-things-to-all-people approach that so many other firms follow. The entrepreneurs profiled above had the courage to focus on a specific niche early on and turn away work from outside that niche. So can you. Their journey from general accountancy toward specialization, supported by online courses and social media platforms, has proven to be successful and has helped differentiate them in a competitive marketplace.
Accounting professionals who can offer specialized knowledge and tailored solutions will continue to be in high demand. Firm specialization, backed by digital technology, may well be the future of the accounting industry.
