Recently I was visiting an accounting firm in a rural market of the United States and had a discussion with their management team regarding their work in developing niches in the local market. One of the Partners explained that for their firm developing a niche was almost futile due to the fact that they are in such a small market. Their situation, he said, was unique and forced the firm to remain a generalist.

It seemed as if they had a point as their market is relatively small (< 50,000 population) so there are not an endless number of clients in various niches of the economy from which to choose. At the same time they are the largest firm in their market and have the potential to go deep and serve an industry well.

After reflecting on this conversation for several days I approached Troy Waugh, CEO of Five Star³, with the firm’s dilemma. Troy has been working with accounting firms to help them market and grow business for almost 20 years through The Rainmaker Academy, and he became very animated when I asked the question…so what does a firm in a small market do about this?

Troy explained his philosophy regarding the power of focus. Troy maintains that there is nothing more powerful for a business, or a person, for that matter, than focus. It opens opportunities, provides depth, and most importantly offers the advantage of really understanding peoples’ needs and being able to help them in meaningful ways.

Troy went on to describe the difference between a niche focus and an area of focus. Both of which can be very successful depending on your circumstances.

In a true niche you are focused on 1 segment of a particular market. You are not trying to serve ALL of healthcare (e.g. hospitals, physician groups, veterinarians, etc…) rather you concentrate only on one segment, say physician groups. This happens to be a very effective strategy for accountants who are part of the CPA Healthcare Advisors Association (HCAA), which as a network of accountants across the country, are primarily targeting physicians. They leave the rest of healthcare to others who have experience in those areas.

Markets with larger population bases allow you to work in small segments of the economy and be very successful. When you move into smaller markets there are only so many physician groups available for you to serve.

However all is not lost in a small market. You can still focus and gain the benefits of your expertise by creating an ‘area of focus’ instead of a niche. With an ‘area of focus’ you would not limit you’re your client/prospect list to just one small segment of the healthcare industry. Along with physician groups, you could open up to dentists, physical therapists, veterinarians, and other ancillary business entities within healthcare. In doing so you still concentrate your efforts in a distinct way, leverage your time, and offer clients a fantastic service that other accountants in a small community can’t provide as they have labeled themselves as pure generalists.

The same principle holds for other areas as well such as nonprofit work. Instead of just working with nonprofits you could also include a focus on government entities. By combining these two related market segments you are able to leverage your expertise, separate from competitors, and deepen your knowledge and understanding of your clients’ business.

Focused effort leads to results and it doesn’t matter if you are in a large million plus population base or a very small rural market. You will gain the advantage over any potential competitor by concentrating effort in a specific direction.

10 Steps to Implement the Power of Niche Focus

1. Find a champion who really wants to be the champion.
2. Search for a passion. Focus on something you are passionate about and all of the sudden work becomes a dream…. (e.g. accountants who are part of the CPA Auto Dealer Consultants Association (CADCA) love cars so learning more about the industry is enjoyable and that translates really well in serving clients).
3. Identify a niche that meets the requirements of the first two steps and has enough scope for you to operate.
4. Research the market to uncover the opportunity, find out whom else is serving the market, determine how you will win in that market, and form a plan to make it happen.
5. Match your resources to the industry. You may already have the expertise to serve that market, you may need to build proficiency, or you may have to bring some skills into the firm.
6. Build a list of prospects that match the type of clients you want to work with.
7. Gain support within the firm. Enlisting the buy in of key Partners and firm leaders will help you in building momentum, support, and in getting the resources to do it right.
8. Line up an appropriate investment in the niche. There will be a price to pay on more than one dimension. Don’t move forward if you or the firm is not able to commit to what it will cost.
   1. Personal cost
   2. Monetary cost
   3. Be all in. DON’T operate at the fringes or on a limited basis.
      1. Get involved with an industry association
      2. Join the board of an association
      3. Speak at industry conferences (e.g. “ten ways to reduce costs and be more profitable running a nonprofit entity”).
      4. Hold seminars about a key issue within the industry and invite clients and prospects.
      5. Stay at it. Starting a niche or an area of focus will take time and effort before you see the rewards. However, when you are really going strong your focus will really show itself in the form of a rewarding professional life, ecstatic clients, and a strong, vibrant revenue generator.

Patrick Pruett

The Alliance of Professional Associations