TFYW#027 Proven Ways to be An Expert Firm

Mar 17, 2023

This week is all about building an expert firm.

The title of Expert Firm is not reserved for large firms, but for firms that double down and focus on one industry.

Expert Firms

The majority of accounting firms are generalist firms. They have local client bases and provide services for the varied needs in their geography.

It has been this way for a while. There has rarely been a large enough concentration for one industry in a small area, so firms had to service multiple industries.

Expert firms have existed for a while as well, but were limited to large firms due to their multi-location offices and extensive network of expert professionals.

If businesses could afford the higher price, they could tap into the network at these large expert firms.

Cloud accounting has flipped this paradigm and provided smaller firms an incredible opportunity.

The smallest of firms can now be expert firms.

Any firm can concentrate on a certain industry and serve clients down the block or 3,000 miles away.

Even with this potential, many firms do not make a move to be an expert in their space.

For a while, I discounted my expertise in certain things because I was never the smartest in my college classes or the top performer for my past employers.

A general position was safer because I didn’t see myself as an expert.

If you don’t remember anything else from this week’s newsletter, remember this:

 

Expertise depends not on intellect or skill but on experience and your ability to pattern-match.

Expertise is the ability to pick out common threads and identify patterns. If you work with three or more businesses in the same industry and codify the road bumps, your value will be 10X that of any generalist firm.

Knowing theory is no replacement for documenting repeated real-world problems and their solutions.

Expert Fees

Expert firms charge more. Plain and simple.

As you evolve and develop expertise, you can charge 3 – 5X more than your current fees as long as you leverage the fact you’re a knowledge worker.

I’ve never liked the term tax preparer. It cheapens what we do. Yes, we prepare the tax return, but our value is the application of the knowledge we have in our heads. The return is just the medium we communicate our knowledge through.

The same goes for financial statement prep and almost every report, document, or deliverable we create in our profession.

The only service that doesn’t have a regulated or defined deliverable is strategic advisory.

You can’t charge expert fees by checking boxes and balancing balance sheets but by formulating goals and building plans for clients. You have to look beyond the regular firm activities.

You don’t charge expert fees for what you do. You charge expert fees for what you think and know

That may sound ambiguous and like I am a bit delusional, but in our industry, your knowledge is your ticket to expert fees.

To get paid more, you have to refine your knowledge.

Refinement

Generalist firms have generalist knowledge.

You have to refine what you know to leverage (and grow) the expertise you have.

Just recently, I updated my LinkedIn and other social profiles to reflect a refined approach to the accountants and partners I work with.

Helping accountants take home $250K a year. There is a clear result of the service that I offer. It does not talk about the process but the destination.

Some additional factors are assumed but not overtly discussed within the idea of taking home $250K. These assumptions exclude segments of firm owners I am not interested in working with. I don’t want to work with:z

Helping accountants take home $250K a year. There is a clear result of the service that I offer. It does not talk about the process but the destination.

Some additional factors are assumed but not overtly discussed within the idea of taking home $250K. These assumptions exclude segments of firm owners I am not interested in working with. I don’t want to work with:

  • Larger partnership groups usually make more than $250K/ partner.
  • Smaller firms where $250K is not achievable in 18 months.
  • Individuals that may have the capacity but lack the mindset or motivation to grow

Could my insights be helpful for a multi-partner firm? Absolutely.

Do I want to work with a multi-partner firm? No.

Getting 4+ partners on the same page to change pricing models or technology strategies is very hard. Further, I have never run a firm with 30+ employees. I lack the experience.

I prefer working with small leadership groups that are agile and want to make profound changes to their firm.

I have designed this message to pique the interest of firm owners and leaders that may be taking home between $100k – $200k currently, but want more. And that is my wheelhouse.

When refining your own message, your position should exclude more potential clients than it attracts. The narrower you get, the better.

Here is an example:

Average: I work with all small businesses

Better: I work with small businesses in the health and beauty industry

Good: I work with small business owners of salons and spas

Best: I work with salons and spas that sell products and packages online

In the Best option, the assumptions you are communicating are:

    • You know the seasonality of the industry. You know there is a spike before and during holidays and before prom.
    • You know the systems that they use (Shopify, Woocommerce, Stripe, PayPal) to sell products online within their ecommerce segment.
    • You know which booking softwares exist in their industry and how they connect to their POS and financial system.
    • You know how to monitor and improve inventory for the number of SKUs for a $1M salon or spa.
    • You know how additional revenue streams, like wedding or bachelorette packages, could impact their business.
    • You know the general ROIs for different types of marketing campaigns in the industry.

It is only possible to get this knowledge by spending focused time in the industry.

The clients you will attach will be looking for expert advice and be willing to pay for it.

Don’t get me wrong, any business can benefit from a lot of general advice, but that advice won’t get your larger clients to the next level.

Many accountants say they purposely don’t get involved in operations. I get it.

But every single business activity has a financial impact. As an expert firm, you will know and understand most of the activities, measure and capture the impact, and provide sound advice to maximize financial gains.

Don’t minimize your impact and role. After matching patterns and seeing dozens of similar situations, your expertise will make clients a lot of money.

Refine your message, focus on a sub-niche in an industry, and you will be an expert firm.

Build The Firm You Want.

Mark

P.S. Email Mark@FirmNexus.com with something that you want me to talk about. I’ll add it to the list. 

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