On this week’s Grow Your Firm podcast, we’re talking with Hugh Duffy. Hugh is the Chief Marketing Officer of Build Your Firm, a marketing agency that focuses on accountants and CPAs in North America. He’s also the host of the podcast “Accounting Marketing Doesn’t Suck” and is the founder of the Dental Accounting Association. Our main topic this week is the importance of niching down your practice and why it’s the road to making your firm wealthy. This is a big hurdle for many accounting firms. Maybe this week’s episode will help you start making the journey.
- About Build Your Firm
- Why is niching so important?
- Considerations for choosing a niche
- Strange niches
- Why you should pick something you know
- Automating your niche
- Why ten niche clients should be your goal
- And more!
Pick Your Niche Now For Riches LaterHugh’s mission is to take small accounting firms and help them from a marketing practice, development, pricing, and selling perspectives. One of the big things that they teach in marketing is that differentiation is everything. You want to excel at something that your competition does not. That sets you apart. This is what developing a niche is all about. What happens when you do this right is that the variety of work you have to do goes down. It makes things simpler, easier, and narrower in scope. When you narrow your scope, you can deep dive into that scope to create specialized services for that niche. This also reduces the number of competitors you have so you don’t have to compete on price. This lets you charge more and raise your profit margin. Over time, like many of the guests on this show, you get to be known for being the best at something. Your niche could be in a particular industry or a particular service. It doesn’t really matter, so long as you differentiate yourself. Also, by niching yourself down you make yourself more attractive to buyers. You won’t be a jack-of-all-trades firm with a lot of different clients. You’ll have a small focus that’s deep, and quite likely you’ll have automated a lot of the process along the way.
Choosing A NicheThe primary consideration is choosing who you want to work with, rather than trying to hop onto some sort of trend. However, there are three tendencies that come up for many of Hugh’s clients.
- First, they want their clients to be single business owners. Working with multi-partner firms makes it much tougher to get a business decision out of them. Thus, good industry niches are ones that have a single owner.
- Second, most of Hugh’s clients do not want to get involved with compliance activities. Working in that field opens firms up to liability issues.
- Third, they want cash-based clients with a simple balance sheet.