How do you answer the question for your firm: “Are you a commodity or an expert?” Most CPA firms are commodities. Building a micro-niche boutique within your firm and capitalizing on the expertise of your partners and staff can change your answer. Now answer the same question about yourself: “Are you a commodity or an expert?” Chances are very good that you are a commodity, as well. How do your clients think of you – commodity or expert? Developing a micro-niche boutique within your firm, capitalizing on your expertise, will change your answer, too.
The AICPA released the findings of a study of CPA firms across the country a few years ago. One startling discovery of the report was that more than 60% of partners in CPA firms are eligible for retirement by 2020. This fact presages significant change within the accounting industry during the next ten years.
In the past, senior partners or owners of firms were able to say, “When the time is right, I’ll sell or merge.” In the past, this was a logical approach to retirement planning. Today, this kind of thinking could result in financial disaster. Today, succession is not secure because the option to sell or merge may not be available to you.
Building a successful and profitable micro-niche boutique in your firm depends upon your ability to build a business around the expertise of a member of the firm. The market might be telling you what your firm does particularly well. You might quickly identify the experts in these high-demand areas. You might also discover that one or more of your staff would like to cultivate expertise and build a boutique business in an area that would draw in new highly profitable clients. To which partners or staff should you look for the leadership and expertise that can be the basis for a micro-niche boutique?
Building a professional or financial services firm today requires a balance of multiple strategic activities. The first step in building your firm is to develop a strategic growth plan. Your plan will reflect your hopes and dreams for your company in both the short term and the long term. You will set measurable and achievable goals. You will involve the leadership of your company in your business growth. Finally, your growth plan will incorporate an appropriate blend of the five key business growth strategies – what we might call the five pillars of practice growth.
I have written a good bit lately about the importance of niche building in growing a professional or financial services firm. I have also written about the value of building micro-niches in adding products and/or services that bring in premium pricing. Today, I want to be certain you understand that building one niche is not enough. So please consider this your invitation to join the niche of the month club – or the niche of the quarter, or the niche of the year club.
The firm that will be poised for the largest growth and the greatest increase in profitability will be the firm that has developed a growth strategy that includes regular “launches” of new niches within their business competencies. And, within each niche, there should be opportunity to also shine a spotlight on a boutique business within both the niche and the firm.
Most people know the story of young David who felled the giant soldier Goliath with a single well-aimed stone from his slingshot. The story has given hope to many people in many situations – the little guy really can win. The little guy can take on a “giant” and win, despite the apparent impossibility of winning. This story can also tell us something about how the small firm can win in competition with big firms by creating a micro-niche or boutique business with which other firms – including big firms -- cannot directly compete.