Are you a bog-standard accountant?

Most accountants with established practices have a mish-mash (sorry, a good spread) of clients built up over a number of years, explains Mark Lee.

Typically the build-up of this range of clients has not been part of any strategic plan. It’s just happened. If the practice owner is happy with their lot, that’s fine.

Challenges

Many accountants complain about the amount of time they spend working and the range of regulatory, accounting and tax rules they need to keep on top of. They also want more clients (profitable ones preferably) and have tried networking, Google ad-words, SEO, telemarketing, direct mail, social networks, advertising etc and are disappointed by the results.

It all seems like a lot of work for little relative reward.

Continued...

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Comments

Great article .... right on the money....    1 thanks

justsotax | | Permalink

it would seem some in the industry see having a niche as being a specialist in a number of fields.....and saying as much.  When actually they are general practitioners with experience in a variety of areas.  I guess it is a play on words...but if you are going to use the word specialist then as a practice you should make sure you know the area inside out.  

 

 

paulgrca.net's picture

Niches    1 thanks

paulgrca.net | | Permalink

Blond, bearded, one legged acrobats who work two days a week, speak fluent Cornish and where spectacles!

Apologies Mark could not resist it.

Ho hum    1 thanks

girlofwight | | Permalink

My specialism is maximising the income from my practice with minimum effort.

Does it have to be more complex than that?

Or to put it another way, if it ain't broke don't fix it.

bookmarklee's picture

Cheers

bookmarklee | | Permalink

@justsotax - Thanks for that 

@paulgrca - Love it - tho not *quite* what I meant ;-)

@girlofwight - I agree, hence my opening comment above:  "If the practice owner is happy with their lot, that’s fine."

Mark

Wholeheartedly agree with the strengths of operating in niche...    2 thanks

carlreader | | Permalink

...markets. We do the same - there's no point trying to be the local accountant as there's always someone £5 cheaper, or with more parking spaces, or established one year before you! Being the 'local accountant' with those qualities differentiates you in no way whatsoever - you are just a bean counter who is a cost to their clients.

 

Mark, I'm happy to share one of our niches as an example - we've obtained probably 90% market penetration in the martial arts industry. I'm also happy to offer a challenge to any firm that thinks that they can crack into this niche and take our place! That's the confidence that being a strong player in a niche can give you.

 

Most accountants consider operating in a 'niche' as being a medical specialist, or a specialist in solicitors, or academies. There's two problems with this. Firstly, they are following the herd, and doing what SWAT / Mercia etc train them to do... Every other accountant is trying this. Secondly, the niche is far too wide for them to reach any form of market penetration, so they'll come up against the same difficulties that they have in their local market. In internet marketing terms, they need to come across a "micro-niche" instead.

 

bookmarklee's picture

Micro-niching

bookmarklee | | Permalink

GREAT example Carl. Many thanks for that.
And I am also an advocate of micro-niching. Should have mentioned it in the article but it was long enough already...

Mark

Thanks Mark. And to give an    2 thanks

carlreader | | Permalink

Thanks Mark. And to give an easily understood idea of the strength of a micro niche for those who might dismiss it - if I was a sole proprietor, the martial arts industry would give me enough turnover to employ a couple of staff at decent charge rates if using the old-school methods of determining capacity...

I've done the sums, and just two of our niche markets have already given us 5% growth on our total firms turnover for last year, in just three months. PPC, referrals, telemarketing, direct mail, and all other marketing sources have accounted for less than this. And for clarity, we're a decent sized firm, not a two-bob firm for whom 5% growth can be obtained with a couple of meetings - so the spread is wide enough for the statistics to be valid (127 client sign ups in the three months).

However, as Mark says, if you're happy getting what you've always got...

Bob Harper's picture

A few points    1 thanks

Bob Harper | | Permalink

@Carl - thanks for sharing that. Would you mind sharing some more information?

  • What is the average fee?
  • Does being high on the Xero Website for advisors help?
  • What is you best source of leads?

@Mark - I'd like to chip in.

As a marketing consultant, I would not even discuss representing a firm unless they decided to focus on something. The question is what and that often requires some research and thinking.

However, firms do not need to ditch the old; they can set up a brand/Website for the niche. And, the niche doesn't have to be in an industry; it can be a service.

A few phrases have caught over the years:

  • Laser beam marketing (a bit American but so was John Wayne and he was good)
  • Go for a niche within a niche
  • Inch wide, mile deep knowledge

Established firms who are comfortable- ignore the above.

Start-ups - understand the past doesn't equal the future so do not copy the old.

Bob Harper

paulgrca.net's picture

Slightly off topic

paulgrca.net | | Permalink

''we operate a bistro style practice''

How many times do you see that on accountants websites and what an earth does it mean?

Bob...    3 thanks

carlreader | | Permalink

Bob Harper wrote:

@Carl - thanks for sharing that. Would you mind sharing some more information?

- Delighted to! We've had another cracking day, now at 134 new clients, with one working day to go until the end of our first three months of the financial year, so I'm feeling generous!

  • What is the average fee?

Together with the stats I've given above, the average fee would be releasing too much commercially sensitive information. Let's just say that certain niches are priced at a premium for our IP, others lower based on economies of scale and systemisation. We're certainly not a cost-leader though, and on the whole are priced at the mid-range, as would be expected of a 'traditional' established firm of our size.

  • Does being high on the Xero Website for advisors help?

It's generated a bit of interest - however, a good proportion of the leads are price sensitive. Having been long term partners of theirs, we are also seeing the same names come back year after year for quotes. So understanding the software isn't really enough of a pull - it has to be how you use it to supplement other benefits you can give them. To quantify this, we could quite simply become top again by buying more licences (having seen the 'platinum' partners website we know how many businesses he services) - however the difference in leads wouldn't really benefit us and the quality of some of the leads could quite possibly take our important resource (being our management team) away from the business development that provides true value and satisfaction to both sides. 

I think that clients and prospects value our ability to determine the best software solution for them, rather than prescribing the "antibiotics" of Sage or Xero which might be more convenient for us!

  • What is you best source of leads?

Our niche markets :-) (come on... I'm not sharing everything!) We have a variety of methods that we use within different sectors, and as a marketing expert I'm sure you've got a good idea of what works and what doesn't. I'm happy to say that social media is fast becoming key to our growth, if only to reinforce offline networking. 

Bistro accountants

carlreader | | Permalink

paulgrca.net wrote:
''we operate a bistro style practice'' How many times do you see that on accountants websites and what an earth does it mean?
Never seen it, and neither has Google apparently (when searching for that exact phrase)!https://www.google.co.uk/search?sourceid=chrome&ie=UTF-8&q=we+operate+a+...

I guess that if this phrase is used, they are trying to imply a small, intimate firm service. Marketing bollocks at it's best. But maybe bistro's could be a good niche for someone? :-)

Bob Harper's picture

Thanks

Bob Harper | | Permalink

@Carl - if you don't ask, you don't get.

Yes, I do know what works but it is great for a successful firm like you to share some knowledge to help the new and young firms who often only hear from traditional accountants who seem to specialise in what doesn't work.

Bob Harper

A bistro style practice...

duncanphilpstate | | Permalink

... is one where they offer you coffee at the end of the meeting.

Tom 7000's picture

specialism

Tom 7000 | | Permalink

@ girl of wight 9/10

 

I specialise in getting new clients....3 today and as I type this the first is sitting outside waiting for me....

Help choosing a niche    1 thanks

Sloane Walker | | Permalink

Hi

The topic of niche accountancy keeps coming up in all the different books I am reading.

I really am convinced that a niche practice is the way forward, 'the specialist always earns more than the generalist'.

My problem is this:  I have a fairly good knowledge in one particular niche, I have spent a number of years dealing with this niche, the problem is is that the type of clients in this niche can be disorganised and a pain!

So, I also have other clients (maybe 16) in another niche (ok it's not a very tight niche, but a niche all the same).  Now the the type of person who runs these type of business is by nature, efficient, good with I.T, they charge a good rate, they provide a service rather than supplies lot's of 'products' etc.  Basically they are the type of client we all like working with!

Now, to become a specialist in this niche, I would need to spend more time working in this niche....so it becomes abit of a chicken and egg situation.  I don't want to call myself a specialist when I am not really....although, that said I do have a good understanding of the issues they face.

Would it be best to research the topic, read up as much as I can, then re-brand/update my website with a new focus on this niche area, cover the issues this niche face....and then transforms my practice into a niche by acquiring these new clients in particular?

Any comments would be greatly appreciated.

Thanks

Dave

 

Cloud services as niche    1 thanks

amalonio | | Permalink

Very interesting article Mark, it is something that I have been thinking a lot about recently in terms of what is our USP?

As a relatively young person in practice, I'm 31, and working in a family run practice(my dad is the sole partner and my elder brother is on board too) I am keen to look for opportunities to offer something new and to differentiate ourselves from "bog standard accountants".

I have recently, within the last year, introduced Kashflow and Mypaye.co.uk into our practice and to offer these products to our clients. I really have to say these are brilliant software products, so easy to use and with many nifty tools and services.

I see this as a great way to offer a great client experience, reduce cost and be able to really help our clients get what they want.  I am really pushing this as our USP as I don't think a lot of other accountants, at least the ones that I am meeting, are even thinking or doing anything with cloud based products.  I am hoping that this will really help carve out a niche for ourselves as I would ideally like to target young, up and coming businesses and entrepreneurs who are so familiar with technology it is like riding a bike and who will also see the benefit in these products more so than the older generation.  That is not to say these people do not see these products as being very good as the clients we have using these products so far are between 30-50 and are getting on great with them.

anyway I think now the challenge is build our marketing around this idea and really get our name out there.

Saw this yesterday and loved it — great niche + doing it well    1 thanks

Paul Dunn | | Permalink

It's not often that a website says it so well about their niche — I thought this one was pretty damn good:

http://www.jonathanford.co.uk/

 

 

Bob Harper's picture

Skin deep

Bob Harper | | Permalink

@Paul - shame they have decided to use template content rather than develop their own.

These could be so much better if they did their own:

http://www.jonathanford.co.uk/resources/business_centre/

Bob

New clients

Hazel B | | Permalink

It's not getting them but keeping them year in year out that counts, then the recommendations just keep on coming.

Deep enough...    2 thanks

jford | | Permalink

@Paul - thanks for your kind comment. I think you've seen one or two accountants websites by now...

@Bob - I take your point however our stats would show that few visitors delve too deep into the site. I bet you're the first to look at the business centre! Of course we could produce better and more original content if we wrote it all ourselves but we have to weigh up the effort of doing that with the payoff.

bookmarklee's picture

@jford    1 thanks

bookmarklee | | Permalink

I will be pointing others at your site Jonathan as I agree with Paul. Really well done!

As for the guides etc in the business centre, your response to Bob's point rather confirms an observation I have made many times. These guides provide very little of value to an accountant's website.

  • I think they 'might' make sense only where the accountant is providing low-cost sausage machine type services and wants to reduce the need to talk to his clients.  (It's a niche - not a good one, necessarily, but it is a niche). In such cases clients can be pointed at the guides to get background info on a range of topics.  
  • Prospects 'might' go looking for free info on accountants' websites but I doubt these lead to new clients - especially as so few of such guides are branded or contain a call-to-action that references the specific accountant whose site they were downloaded from.

Mark

Bob Harper's picture

The right thing

Bob Harper | | Permalink

@jford - it's a bit of a chicken and egg; boring content is unlikely to get anyone delving.

My bet is that you could produce content that would attract more visitors, get people to stay longer, delve deeper and register for your newsletter. 

Yes, it would take effort and the pay-off could be massive. But, whether you do it depends on your personal goals/motivation, financial and non-financial. Let me ask you this...do you think other accountants can look after your market as well as you can?

If the answer is no then you could take the view that you should put the effort in, not because you need the payoff but because it's the right thing to do.

Bob Harper

bookmarklee's picture

@Bob "attract more visitors, get people to stay longer,"    1 thanks

bookmarklee | | Permalink

You may be right. BUT this is still only worth thinking about if those visitors and people are prospective clients of the type the accountant is looking to win.

Call me a cynic but I doubt that many people seeking loads of free advice guides and who have the time and inclination to hand around on an accountant's website pages are likely to become the most attractive and profitable clients. 

Mark

Bob Harper's picture

@Mark - you are a cynic

Bob Harper | | Permalink

@Mark - it's my opinion that more people are spending more time online and they are looking for and sharing vauable content. 

Bob

As with a lot of first time    1 thanks

Maslins | | Permalink

As with a lot of first time accountancy start ups, I initially ignored all the advice to find a niche...why would I be so stupid as to limit my market?!  But of course the reality is if you try to appeal to everybody, you appeal to nobody.

Our "niche" is FreeAgent, a cloud based bookkeeping package on a par with Kashflow/Xero mentioned above.  It's by no means a small niche, they've recently announced getting their 20,000th customer, doubling in the last 9 months.  This indirectly means we're in a niche in terms of our clients' activities, focussing on IT contractors, web designers and other freelancers.  It also means our clients are IT savvy, happy to trust in the cloud and work remotely.  This means we can adopt new technology  to streamline things which impresses rather than scares our clients, and we don't waste much time travelling to/from meetings.

I'm no web expert, but from personal experience I agree with Mark over Bob, that whilst having lots of free advice guides/downloads on your site may bring more traffic, it doesn't bring more clients.  I've even had some people with the cheek to phone me up to get me to explain further some of the guides.  These people aren't clients and have no intention to be.

I've now gone for a simple, design-led website.  Whilst there are some guides on there, they're predominantly so I can point existing clients to them when appropriate, saving me typing out a big essay.

My personal view is that @jford's website is a little "busy", and could do with less text in bigger font on the homepage (again I stress just my opinion)...but the most important thing is if it's working for you, don't change it!

bookmarklee's picture

Just to clarify    1 thanks

bookmarklee | | Permalink

Thanks to @Maslins for sharing his experience and views re his niche of IT contractors.

I am less convinced when accountants suggest that their choice of Bookeeping software is a niche. It may lead to a niche as in this case. But try telling your business contacts and referrers that you specialise on clients who like your choice of bookkeeping software. It would be like specialising in clients who like the fact you prefer AccountingWeb over Accountancy Age. Or that you use Ariel font rather than Times New Roman.

Yes, you may be able to explain how clients benefit from your choice of bookkeeping software. But few prospects and referers are really fussed with HOW you do your stuff. They just want confidence that you do it and that you do it in a way that suits them. (I appreciate the benefits of Cloud over traditional bookkeeping, but that's as far as it goes for me).

Mark

Bob Harper's picture

FreeAgent

Bob Harper | | Permalink

@Mark & Maslins - for me specialising in a technology is a niche because you can help users get the most from it and the supporting services/technology that link to it.

By the way, if FreeAgent is the chosen system there is an argument for linking with Barclays Bank because of https://www.mybusinessworks.co.uk/home/ which I think is £10 fro everything including FreeAgent. 

Bob

Tom 7000's picture

specialising

Tom 7000 | | Permalink

I am still specialising in being an ACA,,ie doing accounts and tax returns. I dont sell insurance or JCB's or Holidays...actually I go back to my comment above I specialise in getting clients, they all need tax returns doing they are all the same ie they are not JCB's...sorry must rush have to get a train to london for the new client I am meeting at waterloo...thats the 4th one this week and its wednesday ;o)

 

and I looked at jonathon fords website...ok I guess...does it work tho...less is more??

Cant say much for confidentiallity reasons but THIS works...

http://www.ifabrokers.co.uk/ 

Moonbeam's picture

I would love to be in a niche...    2 thanks

Moonbeam | | Permalink

One of my excellent mentors explained last year that this is what I should strive for, but it is early days for me and I have to work out what niche I want to be in.

I know for sure that I only want to work for intelligent, solvent people, so that will cut out quite a few, but of course that is not nearly "niche" enough. I had rather stupidly thought in the past that there were few niche areas, such as doctors, dentists, IT and media types.

So when Carl explained his niche was martial arts that was a real eye opener and I could immediately see that there are lots more niches than I had previously realised.

So thank you Carl. I will now have a look at Yellow Pages to see what possible niches I could investigate.

Bob Harper's picture

Interesting    1 thanks

Bob Harper | | Permalink

@Tom - I understood from a previous post that in 10 years you built a practice with a turnover in excess of £1m and have over 20 staff...is that right?

@Moonbeam - look on the inside, what do you find interesting?

Bob

Re niche and software - a few    1 thanks

Maslins | | Permalink

Re niche and software - a few things:

- if we specialised in Sage, we'd be one of 90% of accountancy firms, hardly a niche.  FreeAgent's currently nowhere near as mainstream, and certainly wasn't when we went on board with it.

- we don't tend to push clients onto FreeAgent, most clients we get are already using it/are already sold on it through an existing user...so I don't really buy the argument that we push FreeAgent on clients who might be more suitable to something else.

- IMO part of the point of "niching" is to rank well on Google.  Try being number 1 for "Accountants" and you'll struggle.  Carl could perhaps achieve number 1 for "Martial arts accountants"/similar without spending millions on SEO.  Same for us as FreeAgent accountants.  So following the point above, they typically find FreeAgent, then find us because of it.

- I also don't really believe that any accountant can easily get the most out of every bookkeeping package.  They all have their quirks.  By specialising in FreeAgent, we ensure that when a client doesn't know how to do something, we do.  Perhaps worth mentioning at this point that our clients won't have separate bookkeepers.  They'll do the day to day data entry, with us effectively being bookkeeping supervisors.  Therefore we need to know not only how to get the TB to do our year end bits, but also how to use it/fix issues etc.  I'd struggle to do these things on Kashflow/Xero without a lot of playing around...I certainly couldn't talk a client through it over the phone, but with FreeAgent I can, and that adds real value to the client (IMHO of course!)

- plus of course the benefit to us (not the client) that because we're so familiar with it, we can do our work much more quickly and easily...and also get systems in place to automate some basic tasks.

...so on this point, I agree with Bob ;-)

Bob Harper's picture

Threats

Bob Harper | | Permalink

@Maslins - with every strategy a SWOT analysis applies and if you win them on the software, you could lose them on the software. 

I suspect excellent and free online bookkeeping/accounting software will be available in the UK very soon, which can do everything the leading players can do. 

I also believe the users of online software are well connected and socially connected. And, In my view many will switch to save the £10 to £25 a month licence fee. And, when they do they could switch accountants!

Interesting times ahead.

Bob

bookmarklee's picture

Thanks for the clarification @Maslins

bookmarklee | | Permalink

In the light of that clarification I tend to agree with you. ;-)

@Bob, yup, we are vulnerable

Maslins | | Permalink

@Bob, yup, we are vulnerable on the supply side...though I think the demise will come from a different route.

I don't think there'll be bookkeeping software any time soon which is both free and good. Development/improvement costs money.  I don't think it's any coincidence that the three most successful cloud bookkeeping packages (Xero, Kashflow & FreeAgent) are also the most expensive for end users.

If clients believe they'll get identical service for a lower price, then yes, many will move. This in itself doesn't worry me, as many of the clients we win come from a cheaper accountant.  Whilst on the face of it many fixed price accountants offer the same thing (submission of XYZ, unlimited email/phone support etc), how quickly and accurately they reply to client queries, and whether they spot things before they become a big problem is a separate issue, and varies tremendously from one practice to the next.

The threat from my perspective is that either FreeAgent somehow disappears, perhaps due to a major security cockup/merger/similar.  Or (more likely) it becomes more and more sophisticated, and does more of the checks/submissions we currently do, that clients start to question whether they need an accountant at all.

bookmarklee's picture

An important point and a challenge

bookmarklee | | Permalink

Maslins wrote:

The threat from my perspective is that.. it becomes more and more sophisticated, and does more of the checks/submissions we currently do, that clients start to question whether they need an accountant at all.

The software will indeed move in that direction I'm sure. The challenge is to ensure that clients perceive that they are getting more advice and value from their accountant than any software can provide. If you fear they could reach the conclusion that they don't need you I would suggest you need to be doing more and making yourself indespensible. Which of course is also a different approach to those accountants who just process books and records.

Bob Harper's picture

Price    1 thanks

Bob Harper | | Permalink

@Maslins - there are other ways to fund free and good software than charging the end user. Have a think about how Google provides free search software.

@Mark - I agree, my take is that the market is dividing into three types of accountants:

1. Added value...local and online - they will be price makers.

2. Compliance new...online and very low cost e.g. small Ltd Co £60 a month

3. Compliance old...local and low cost e.g. small Ltd Co £100 a month

As more people do more things online we will be left with the first two.

Good luck all.

Bob

 

Hmmm, it's nice to think I

Maslins | | Permalink

Hmmm, it's nice to think I add so much extra value, but I think the reality is different.

Don't get me wrong, I'm confident in my abilities, but once software makes it easy for end users to file things directly themselves, a lot will do so regardless of whether they'd be better off getting advice from an accountant or not.

I think the software providers will need to be careful, no doubt with massive caveats "just because our software lets you file things doesn't mean it's all correct".  I worry that the small business accountant's role will become one of unpicking messes when HMRC enquire, as someone who really shouldn't have DIYs.

@Bob, I don't know the numbers, but Google no doubt has hundreds of millions of users.  FreeAgent (as an example) has 30+ staff and has just broken 20,000 users.  Funding 30 salaries out of the advertising on 20,000 users surely doesn't stack up.  Sure, there'll be some cheap & cheerful "developed by kid in bedroom" packages which will be free...but IMHO getting a decent product to match the current big 3 can't be done on a bootstrap budget.  Perhaps I'll be proved wrong.

Bob Harper's picture

Google Accounting Software

Bob Harper | | Permalink

@Maslins - I agree on both counts, being well funded is key.

However, I believe the model works because after you have built the product the marginal cost is tiny. And, can you imagine the value of the data? Think about it, the provider will know who spends what, where and how much. That is more targeted than Google.

I think the moment they

Maslins | | Permalink

I think the moment they decide the product is "built" and stop developing it further, they'd rapidly fall behind the competition.

Also, don't underestimate the ongoing support costs. No matter how intuitive it is, you'll need staff to answer support queries.

I know I'd be spooked and reconsider my bookkeeping package if I started getting unsolicited cold calls/emails "Hi, we note you spent £72 on stationery/phone/whatever last month, did you know we could save you..."

Bob Harper's picture

Valuable marketing

Bob Harper | | Permalink

@Maslins - by built I mean the core engine, they can always tweak and improve but over the user base this is nothing.

I don't think telemarketing needs to be used but what about a report that does automatic cost reduction for businesses? I'd suggest clients would see this as a valuable feature.

Yes, support costs money and it could be the biggest marginal costs but really, how much support does it cost per user per annum?

Out of interest, my take is that current fees charged by the online players are for early adopters, like the costs of a new hardback book. They will come down.

Bob