TFYW#036 The Riches Are In The Niches

May 19, 2023

I want to take a different approach to speaking about niches this week.

The niche conversation usually starts and stops with “You need to niche your firm”.  We’re going to go deeper this week.

But first, today’s tactic.


Today’s Tactic

A major client complaint is that their accountants are poor communicators.

A major accountant complaint is that their clients don’t respond fast enough.

Here are a few tactics to improve your communication game via email.

I’ve found that emails are more digestible AND responded to faster when they contain less text.

1. Bullet points and white spaces: Use bullet points as much as possible. If you’re using commas, you can turn those items into bullet points.

Your paragraphs should be two sentences at maximum. White space reduces the chance of a client opening your email and deciding to respond later.

2. Email templates: Templates are best for consistent, clear communication that we repeat frequently. It reduces the chance we miss important information when we have sent the same info dozens of times already.

3. Requesting Documents: It is better to show an example as a guide if you are requesting a document. A screenshot of the doc or attaching the same doc from a prior period helps the client know what you’re requesting.

4. Explaining Anything Financial: Graphs, tables, and charts are the best way to get an idea across to the client. Again, a screenshot from an Excel file or an embedded table will 5X the clarity for a client.

Screenshots: I use Awesome Screenshot or the Microsoft snippet tool

5. Hyperlinks: Include hyperlinks to websites if your clients need to make a payment, log into their portal, or complete a web form. If I send a follow-up email, I’ll repaste the same link from earlier in the email thread.

Make it easy for them to take the next step.

6. Explainer videos: At times, you’ll need the client to complete steps to set up their tech, bank feed, or finalize a web form. For any instructions more than two steps, a 2 – 3 min instructional video saves hours of back and forth with clients.

Screen recorder: I have sent 100s of videos via Loom. Loom offers libraries for the videos you use repeatedly.

Here’s to less text and more communication!


Picking A Niche

The impact of niching your firm cannot be overstated. A developed niche will improve your firm now and future-proof it for later.

Many firms are trapped on the compliance hamster wheel. These firms also see AI and low costs providers coming at them.

Not to mention, hiring and retaining good employees is getting harder.

Firms that won’t pivot from general compliance will get further squeezed as time progresses.

Niched or specialized services (including niched compliance services) allow you to become valuable to your client business.

 

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

 

Escaping the compliance grind depends less on you being good at accounting and more on you being good at business. 

 

Clients need less accounting advice and more business advice.

 

Let’s dive into carving out that niche.

Committing To The Niche

The path of embracing a niche can be a difficult one. Every stage of the process takes time and commitment.

I like to compare committing to a niche to what Alex Hormozi describes as the entrepreneur’s journey:

We all start with

1. Uninformed optimism. This is the ‘aha’ moment where you like the idea of the niche. It’s an early stage, but it resonates with you. Maybe you’re feeling that now.

Then comes the

2. Informed Pessimism. This is doubt that you feel when you realize it will take work and effort (and maybe strained cash flow) to make it happen.

You’ve committed and keep going. Then you enter the

3. Valley of despair. This is when you don’t see results right away and think that you’ve picked the wrong niche, approach etc. You decide this route is not for you and return to Uninformed optimism. You restart with a new niche, or go back to being a generalist firm.

If you can hold on and keep digging in, you’ll hit

4. Informed Optimism. This is when your messaging and position have been confirmed by landing a client or three. You see the potential and feel the momentum.

You continue to develop your niche, and you 

5. Achieve your goal – a niche firm with a successful client pipeline.

It can be tempting to switch when success doesn’t come quickly. Great niches take focus and persistence.

Benefits of Niching

The benefits of niching vary based on how specific you get with three main components:

  1. Industry and Sub-industry
  2. Problem You Solve
  3. Technology You Use

Industry and Sub-Industry

Many firm owners stay broad with who they work. The benefit of going narrow is becoming an expert in the space.

Generalist firms that advise clients from all industries offer only generic and shallow advice.

For newer businesses, there is value in generic advice, but for businesses looking to grow, that advice won’t cut it.

Being good a one or two sub-industries is a better approach. You can go much deeper and offer real and actionable advice that you can charge more for.

When I say real and actionable advice, I mean instruction, guidance and leadership that goes beyond ‘safe + general’ accounting advice.

Escaping the general compliance grind does come from increasing your prices; it comes from deepening your experience and focusing that expertise.

Trade off:

Problems You Solve

Many firm owners do not lead with problem-solving messages or offers. They simply offer a service. They join the sea of commodity service providers.

Don’t get me wrong. People need commodities. Clients pay for commodities.

But there is no competitive advantage to selling the same thing that every other accounting does.

As a commodity, price will be the deciding factor for your prospects.

By leading with a problem-solving offer, you put yourself in a category of your own. The prospect can’t shop your offer because it is unique to them.

The client’s outcome will be the deciding factor for your prospects.

Trade off:

Technology You Use

Clients who will pay your higher fees BUT won’t or can’t use your firm’s systems and workflows will destroy your profit margin.

This is easily the most overlooked component of entering a niche.

Technology is a major player in only successful business.

You have to consider whether a client can or is willing to adopt technology compatible with what you do.

I don’t recommend you overhaul every prospect’s system, but enhancements may be needed so you can fully connect with their business.

Tech compatibility increases profitability and improves team training and retention, improves scalability, and deepens your expertise.

I know it is hard to say no to a client willing to pay, but the opportunity costs of clients skyrocket when you set up workflows unique only to them.

Trade off:

Niches come with trade-offs. 

But everything you give up will be replaced by a better client.


Today’s Tech

Today’s tech is a hidden gem that I use every day.

If you are a Gmail user, this is a way to speed up your time in your inbox.

It is called auto advance. It automatically moves you from one email to another without returning to the inbox.

It saves me 100s clicks every day. It also reduces the distraction that comes with cherry-picking what email I will action first.

To get this set up, go to Settings and the Advanced Tab:

Auto-advance: Enable

Then jump back to the General tab and scroll down to the Auto-Advance section:

For me, I start at the oldest email in my inbox and work my way forward to the newest. This keeps me focused during my twice-a-day inbox checking.

See you next week.

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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