In my July 2023 article for California CPA magazine titled, “Taking CAS and Conversation to a Whole New Level,” we talked about the many situations and challenges businesses face as they grow and expand. Many of these challenges require a one-time fix and others can be more recurring—and sometimes—universal for all clients. In many cases, these additional services are unique to client’s needs and essential to their well-being. Thus, they and their needs are essential to us—and create opportunities for all.

As we grow and our clients expand, the more recurring and specialized client assistance grows in both importance and being critical to us and clients. As your consulting or client accounting services (CAS) grow, many services will become more repetitive in nature and can be more standardized, allowing you to create a niche in certain areas. 

Services like business evaluations, bookkeeping, business management and others can become more unique as a single service as opposed to a more global approach—for instance, helping more of your clients grow.

Creating niche services can make your firm more effective and more profitable. Finding the opportunities and how you can help maximize them will be critical for everyone. Many opportunities and challenges may already exist—and be immediate needs for your clients. Some may already be an existing service for some clients and not others.

What Is a Niche Practice?

From a personnel perspective, a niche is “a place, employer, status or activity for which a person or thing is best fitted.” For the marketing mindset, a niche market is “a focused, tangible portion of a market.” From a business perspective, a niche is “a particular specialty in which a firm has generated a large market share.”

What is interesting is that many of these definitions can and will apply to your niche(s). It depends on how you develop and present your niche-like services. For example, you would want to accentuate:

• Value-add services you provide your clients.

• Level of effectiveness of your complementary services.

• Ability to identify and fulfill client needs.

• Marketing strategies to make them crisper and more modern.

• A specialty that you may have in a particular marketplace. 

Where Are the Opportunities?

Among the top service niches, you’ll find in accounting include:

• Information technology

• Human resources

• Business valuations

• Investment services

• Litigation support

• Estates and trusts

Common market niches are nonprofits, real estate, manufacturing, professional services, construction, retail clothing, law firms and medical providers, to name a few. Other niches common for the profession include:

• Forensic accounting

• Bankruptcy

• Family business

• Benchmarking

• Crisis management

• Strategic planning

• Ethics audits

Benefits of Niche Practices

To help you view the niche as a viable benefit for your firm, let’s look at some of the major reasons that firms seek to create niches:

• Fulfill client needs more effectively.

• Differentiate the firm in the marketplace.

• Be more competitive.

• Create additional revenue streams to enhance firm viability.

• Increase the firm’s overall value to be more attractive to staff, future partners and possibly an outside buyer.

• Create alternative career paths for younger professionals that will help in recruiting and retaining new team members.

• Craft unique career positions for retired/retiring partners to maximize their talent, expertise and networks more effectively.

• Balance workload to help smooth out the peaks and valleys so common to the CPA firm of today.

Developing a Niche

There are several essential action items to take to set yourself up for success in the niche process. The first, and probably the most important, is creating more than one niche. For niches to work most effectively, they need other niches for synergy. For instance, human resources and compensation/incentive programs can work with synergy. Information technology and cyber security support will complement each other. Cost segregation and business valuations have potential. And real estate services and investment services might also complement each other. 

Moving from the strategic, let’s look at some essential tactical and action-oriented items:

• Find and support a champion. This would include the managing partner from the organizational perspective and another person, maybe a partner-to-be, from the operational side.

• Develop a business plan around niches and integrate this plan into the firm’s overall business plan.

• Complete a comprehensive cost/benefit analysis that truly looks at benefits, not just costs.

• Consider working with strategic associates to help create, develop and expand these new services. By working with other professionals—often not CPAs—experienced in these capabilities, you can increase your success and help mitigate risks and challenges that come with any entrepreneurial endeavor.

• Allow the process at least an 18- to 36-month window to become fully productive and successful. The benefit is that while you are out promoting new services, you will also be able to secure additional work of a more traditional nature.

• Recruit and hire people firm-wide who are interested in new and more progressive approaches. These people are your future; the more diverse their opportunities, the better chance for their success and the firm’s success.

• Implement quarterly training regarding how these niches assist clients and how these services integrate and support other services provided by the firm.

Marketing & Communication

Finally, to make all of this work, actively market and communicate to your audience, including existing clients, potential clients and referral sources. Marketing to existing clients is essential and, with multiple niches, gives the firm a greater opportunity to cross-market for client benefit.

Once the firm has a niche practice or two up and running, you’ll see how much value they bring—to the firm and clients. Each practice area gives you an opportunity to develop new business from existing and new clients; also, it can be an incentive for recruiting and retaining staff in a very dynamic labor market. Both can help create greater returns on your investment.