A common challenge that many accounting firms face when adopting a niche strategy to increase revenue is trying to determine which niche they should focus on. Obviously, being able to serve a niche for profit is the primary goal of a niche strategy, but selecting an industry vertical simply because you think there’s money to be made in it fails to take into account some other key criteria which can impact the level of profit your firm can achieve by serving it.
You may have already crunched the numbers on your preferred niche based on market size and penetration along with your firm’s pricing strategy, but these hard numbers are only part of the profitability equation. The following questions can help your firm evaluate other factors which may impact the profitability of a specific niche:
- Does your firm already have deep expertise serving your chosen niche?
- Does your firm have a passion for serving the niche in question?
- How high is the propensity to buy your specific services in the niche you want to pursue?
- Are you prepared to go deep in the niche?
- Have you done your online audience research?
When your firm first considers serving a new niche, it’s easy to evaluate the potential profitability only on a surface level based on the market size, the penetration you project you can achieve in it and your pricing strategy. Asking yourself the five questions above can help make the process of launching and growing your niche client base faster, smoother, and more profitable.
If you need help setting a clear vision and goals for your firm with an actionable, measurable plan for achieving them, schedule a complimentary C.O.R.E. Coaching session with The Bona Fide CPA Suite’s Firm Strategy Team.