Questions? Feedback? powered by Olark live chat software
Print Page  |  Contact Us  |  Your Cart  |  Sign In
The Boomer Bulletin - 2013
Blog Home All Blogs
Search all posts for:   


View all (48) posts »

Technology Accelerates Niche Growth

Posted By L. Gary Boomer, Monday, April 15, 2013

Growth typically requires both entrepreneurial and managerial skills.  The majority of CPAs are more skilled in the management area than entrepreneurship.  With both skills firms can reduce risk and grow through innovation and learning.  The end result is a new kind of collaborative accounting where technology plays an important role – the accelerator.  How well do you know your clients and prospects?  Do you use the data to market and differentiate your firm?  Marketing trumps facts when it comes to sales.  Great companies and firms are using data mining and business intelligence to increase their market share.  You are the trusted business advisor with relationships and have access to important and accurate data.  Are you leveraging these relationships and market intelligence for the benefit of your clients and to your firm’s advantage?  Or are you simply too busy charging hours to notice the less commoditized opportunities?

There are five significant traps that firm’s often fall into when trying to enter a new or expanded niche with new innovation.  The traps and how to avoid them are as follows:

1.  Lack of Focused Leadership

Firm leaders are often distracted with existing responsibilities and try to develop the new services on a part-time basis.  If the niche is a priority, and part of the firm’s strategic plan, then adequate resources including firm leadership should be allocated accordingly. 

2. The Allure of a Plan versus a Business Model and Platform

Conventional wisdom typically includes a business plan and projections.  Too often these are little more than a spreadsheet estimating hourly rates and the number of hours utilized.  More important is a business model and platform focusing on client dangers, opportunities and strengths.  The pricing strategy should be value based rather than hourly and the business model should be collaborative.  In order to be collaborative, the platform will be typically cloud or Software as a Service based rather than traditional client server architecture.

3. Lack of Knowledge

Firms too often lack knowledge or ignore important data regarding client needs other than from an accounting and tax perspective.  While tax and accounting are important, they are only part of the client’s requirements.  The CPA is the most trusted business advisor and must think like a quarterback rather than a defensive lineman or safety.  There are many higher value added opportunities beyond the transactional services that firms can offer.  This requires a process of communication to identify and package services beyond tax and accounting.  Some professionals are comfortable with change while others resist.  Is your firm missing viable opportunities because you haven’t named, packaged and priced services to meet client needs?  These opportunities may also require different skills and delivery personnel.

4. "Just do it" Attitude

The day of the rugged individualist is over and today’s client services require a team approach to meet the expanding requirements.  Broader scope often requires additional internal or sourced resources.  Lisa Gansky, the author of "The Mesh", coined the term "mesh” and it is appropriate for the accounting market where leasing rather than owning is appropriate for firms and their clients.  The rugged individual approach typically results in less than optimal results for the client in the areas of strategic planning, budgeting, cash flow, human resources, technology and talent development.  Properly naming, packaging and pricing these services can result in extreme client savings and satisfaction while increasing firm revenue and margins.

5. Traditional Accounting Firm Management Methods

Most firms have focused on independence rather than advocacy.  Both values are important depending upon the type of service being offered.  Continual commoditization in the audit and tax compliance areas is forcing firms to look at margins and rethink service offerings.  The charge hour mentality also challenges good business thinking.  With the right business model and platform, firms can increase both revenues and margins.  Unique processes and a hosted platform make the services scalable and address client requirements.  The most profitable firms focus on selling consulting services, even to assurance service clients.  There are of course some limitations based upon independence requirements.

The Current Environment and Opportunities 
The tools and climate are right to change industries, professions and the world.  Technology can be disruptive.  The trusted business advisor status requires collaboration, creates value, requires scope and pricing in advance, and typically is based upon a fixed monthly fee with change order clauses to protect the client and the firm.  The Value Creation Agreement improves cash flow and addresses workload compression, if properly managed.  You must think more like a lean startup than a traditional CPA firm.  The service life-cycle has multiple phases and you should start with the vision of your market, experiment and learn as you progress.  Most successful firms admit they got their start from a client that requested the additional services in a particular niche.  They learned, adjusted, packaged, priced and grew the service.  To remain competitive they focus on innovation.

Required Resources 
In practice we see four primary resources that dictate success: 

  1. A champion with passion 
  2. Existing clients who need the services
  3. A unique ability team to service the clients
  4. A technology platform that supports collaboration
Due to the limited space of this article we will only focus on the characteristics of the champion who reduces risk and develops a profitable service.  The characteristics are as follows:

  • Level 5 leader with a purpose and vision beyond personal gain
  • Team builder who is a multiplier leader
  • Access to internal and external resources
  • Politically connected
  • Proven track record
  • Passionate
Words of Wisdom 
Those with passion do, while those without passion try.  Charles Kettering’s law on committees:  If you want to grow an idea, keep it away from committees.  Success requires leadership and a unique ability team.

Tags:  Information Technology  technology 

Share |
Permalink | Comments (0)
Community Search
Sign In

Forgot your password?

Recent Blog Posts