No niche required: Startup practices should not niche

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Mark Telford
Director
Telfords Chartered Accountants
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Practice owner Mark Telford does not buy into the niche hype and here is why.

For anyone starting an accounting practice from scratch, and I’ve done it, there are a number of dos and don’ts that I would recommend. Fairly high up on this list is a favourite topic of mine – niching.

Despite what the gurus may tell you:

DO NOT NICHE!

That’s in capitals as I feel strongly about this. Niching has been a buzzword for a number of years now and it was still prominent at Accountex this year. The advice being is that you need to niche in order to scale.

Well, I can tell you that when starting out you need to put this idea to the back of your mind.

The number one priority for you when starting up is to get clients on board and to get the cash coming in. Get this wrong and your practice will struggle. 

You need to get through the first 12 months and niching will not help you do that.

Most startups don’t have the luxury of a big cash fund to see them through the first 12-18 months or a partner who has a good level of income that covers the usual monthly expenditure that most of us have. For many, they are the sole or main breadwinner.

I should emphasise that if you are starting up and have a partner and a family then you must get them on board. This is vital.

You will need their support for the next few years as it will be hard work and at times stressful, but in the end, if you do it well, it's very rewarding.

You may have planned your move to being your own boss and already have a number of clients on board which is great, but it's probably still not enough to provide you and your family with enough monthly income to cover household expenditure.

By niching your practice at the very start or early on you are putting up a ‘no vacancies’ sign to a lot of potential clients. Clients who, in the very near future may refer you to other clients, who then refer you to others and so on.

If not niche, then what?

Remember: you need to get the clients and the cash coming in. At this stage, you are time rich and cash poor, so I would recommend:

  1. Social presence: Set up/update your LinkedIn, Twitter, Facebook profiles and other social media platforms that you use. You need to let everyone know what you are doing.
  2. Leverage your network: Your network may not be great at this stage but you should contact all of your friends, past work colleagues, suppliers, clients (this one may be tricky if you were in a practice), basically anyone who knows you.
  3. Design and set up your own website: There are lots of easy to use products such as WordPress and Rocketspark. It doesn’t need to be perfect but make sure it looks professional and tells everyone that you’re open for business and (almost) everyone is welcome.
  4. Subcontract: If you can, get some work in another practice or another company’s accounts department on a part-time basis. This has the triple benefit of getting cash coming, growing your network and great work experience seeing how other practices operate (good and bad).
  5. Network: Network, network, network. Go to as many different events as possible so that you can meet as many potential clients and introducers and let them know what you are doing and the type of clients you are looking for.
  6. It's not a 9-to-5: Work as many hours as possible to make sure you succeed. Remember starting a practice isn't for the fainthearted or workshy.

Above all else, accept all clients: any business sector or business type. However, the only caveat to that is that you need to avoid timewasters, liars and cheapskates. These won’t always be easy to spot at the start but after a while, you will develop a sixth sense.

I did all of the above and after 18 months with no marketing expenditure, my practice had a turnover of over £150,000. Most of those clients are still with the practice today - six years later.

Now once you get to the stage where client numbers and income levels are good you may decide to be more selective and specialise. You are now in the position where you can be pickier and probably have a very good idea of the type of clients you want to work with. 

If you niche on day one, you may be forced back into fulltime employment with shattered dreams.

So if you are thinking of starting your own accountancy practice: do not niche!

About Mark Telford

Mark Telford Chartered Accountant

I help business owners achieve their goals. 

By working closely with business owners I help them achieve both their business and personal goals. 

I do this not by submitting accounts and tax returns on time  - that's the bare minimum, but by helping them achieve more. This can be business growth, business sale, succession or retirement planning, business improvement and most importantly personal goals. 

All businesses should have a plan and its important to measure performance and make sure you are on track to achieve your goals. I will work with you to achieve this.

I’m a Qualified Chartered Accountant and experienced Finance Director. I spent 16 years working in industry and commerce, 12 years in senior board level financial and commercial positions of large organisations. I understand business, I can see the business from a commercial and operational view point not just a financial one.

I founded Telfords Chartered Accountants as I could see that many small businesses were not getting the business support and advice they needed from their accountant. Regular financial and commercial support throughout the year is essential to help a business achieve the results the owners want.

By using cloud software from the very start we have been able to provide a year round service which helps businesses be the best they can. 

We have been using Xero since 2010 and encourage all clients to use it as we believe it is the best accounting software to help them run their businesses. 

Replies

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13th Jun 2018 17:37

Excellent advice.

Thanks (1)
13th Jun 2018 18:08

Another "expert"! Just what we need. Seriously though, chapeau. 150k in 18 months is excellent. Have those figures been audited? I have some free time available if required to conduct an audit though it may not be true and fair.

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to Red Leader
13th Jun 2018 21:21

+1

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to Red Leader
19th Jun 2018 11:39

£150k turnover in the first year is almost impossible for a genuine home based start-up sole practitioner. It would only be possible if you already have major clients lined up before you start, or if you take on employees from the word go and have a full time marketeer. More realistic is what I did, i.e. about £10,000 turnover in the first year, and growing by a further £10,000 for each of the next few years, if a lot of time and money is spent promoting yourself. It is not quick or easy to start up a practice. However, I do agree with the writer that you should not niche for the first few years at least.

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to JDBENJAMIN
19th Jun 2018 12:21

Surely £10k per year is way too low, and would not be worth leaving the security of a day job for.

I am Oop North but left a director level job to go it alone, but still managed £45k in year 1.

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to JDBENJAMIN
19th Jun 2018 12:21

Surely £10k per year is way too low, and would not be worth leaving the security of a day job for.

I am Oop North but left a director level job to go it alone, but still managed £45k in year 1.

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to JDBENJAMIN
19th Jun 2018 12:21

Surely £10k per year is way too low, and would not be worth leaving the security of a day job for.

I am Oop North but left a director level job to go it alone, but still managed £45k in year 1.

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to Glennzy
19th Jun 2018 13:22

I heard you the first time!

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to Glennzy
19th Jun 2018 15:03

It is hardly ever worth (in pure financial terms) leaving a good full time job to start up a sole practice from home. I started mine due a not having such a job in the first place. I have over the years heard a lot of bovine ordures from people on this site saying how they make hundreds of thousands a year from their spare bedroom, but in reality most home-based sole practitioners will make profits between £30,000 and £70,000 a year.

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14th Jun 2018 07:42

I'm going to make myself unpopular here.

But the best time to niche is actually when you start up.

By focusing your marketing on a niche you:
- stand out more from the other local accountants because you are offering something different (which is essential if you are going to get the referral rather than your potentially more credible local accountants with the established reputations)
- get more bang for your marketing buck because you are targeting the right messages at the right audience
- make it easy to decide on which events to attend, what content to create, which introducers to cultivate relationships with

Of course, I completely understand that as a new practice owner you need to put food on the table. There is nothing stopping you from taking on any prospect who likes your stuff.

If you try and be all things to all people, you end up being all things to no one. That's the last thing you can afford to do as an accountant in the early days of starting up your own practice.

Thanks (6)
to efficiencycoach
14th Jun 2018 22:42

It's not a popularity contest Heather.

You're wrong.

New start up practices which start from scratch and haven't been thoroughly planned need to get the clients on board and cash rolling in - thinking of and devising a strategy for a niche just delays this.

Added to this most new start ups don't have a niche in mind and/or if the do they don't know if it will work.

Cash is vital - just get clients onboard.

After 12-18 months you will know what works best so by all means look at a niche, but not on day 1.

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to Mark Telford
15th Jun 2018 11:10

That's really rude and arrogant Mark.

Heather makes some very valid points.

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to ireallyshouldknowthisbut
15th Jun 2018 12:00

Thank you

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to Mark Telford
15th Jun 2018 12:11

No offence taken.

Everyone is entitled to their own opinion and I am absolutely fine to agree to disagree. Life would be boring if we all agreed.

I also think we are actually fairly close in agreement. We are both agreed that we want people to win clients quickly and that niching works. It's just about when is the right time to niche.

Effective marketing comes down so much to mindset. Interestingly you wouldn't expect an accountant to set up their own practice if they couldn't do the technical aspects of accountancy. So, why are accountants starting their own practice without educating themselves on the fundamentals of marketing?

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to efficiencycoach
15th Jun 2018 12:28

Yes I should have added 'I think..."

No intention of being so blunt - sorry!

And yes - you're right I do think a niche can be useful but it can create a huge amount of confusion and uncertainty so I would say no to it unless you have planned your set up properly.

Starting a practice without planning- many have to - redundancy, end of contract - and there needs to be more alternative advice on how to do it successfully.

It would be great if more practitioners set out how they did it - what they achieved and when.

Whilst we are in the same sector we aren't competitors - there's plenty of work to go around - even more when MTD kicks in next year.

Collaboration is needed.

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to Mark Telford
15th Jun 2018 15:31

No worries. No offence taken at all.

One of the great things about the Accountants Millionaires' Club is how open members are at sharing what they are doing and how they are doing it.

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to Mark Telford
19th Jun 2018 11:54

Arrogance personified

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to efficiencycoach
19th Jun 2018 12:07

efficiencycoach wrote:

I'm going to make myself unpopular here.

But the best time to niche is actually when you start up.

By focusing your marketing on a niche you:
- stand out more from the other local accountants because you are offering something different (which is essential if you are going to get the referral rather than your potentially more credible local accountants with the established reputations)
- get more bang for your marketing buck because you are targeting the right messages at the right audience
- make it easy to decide on which events to attend, what content to create, which introducers to cultivate relationships with

Of course, I completely understand that as a new practice owner you need to put food on the table. There is nothing stopping you from taking on any prospect who likes your stuff.

If you try and be all things to all people, you end up being all things to no one. That's the last thing you can afford to do as an accountant in the early days of starting up your own practice.

I may be biased as I have recently started up a niche accounting business but the niche I have chosen ties in with my beauty hobby/business and was chosen after years of studying marketing whilst working full time for a large accounting firm. After working with a variety of clients I have decided that the market I want to target is the one that I am most passionate about and within one month I have made a presence for myself within the beauty industry in magazines, blogs and invited as guest speaker to one of the biggest beauty shows in the UK later this year, which I am really excited about. Im not saying this is the best way for everybody but I wake up excited and looking forward to my work each day and am thoroughly enjoying the journey. I agree it is important to get the cash in but at the moment I am planning on spending the next few months getting to know my potential clients and enjoying the flexibility of working from home after almost a decade of working in the corporate environment.

I would be the perfect case study maybe to see if I have made the right decision :-)

I do also have other clients from word of mouth that I am happy to take on but would rather stick with my chosen niche so will be meeting with a potential partner for my business model to take on other clients such as spouses/family members of my beauty clients who are interested in an accounting service.

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to Ria Sarrington
19th Jun 2018 16:47

Yes - you will hopefully be a good case study!

Reading between the lines, many of the good folk here resisted focusing on a niche as they didn't know what to choose and what would work. So they made a lot of bets!

Whereas, my advice is always pick a target market that you enjoy working with and are passionate about. That's why I stopped helping small law firms grow as they just didn't float my boat.

And secondly, look for where you are already credible. Perhaps due to the industry you came from? Or the clients you previously worked with in practice.

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14th Jun 2018 08:26

Overall I support the original poster, with the caveat that if you DEFINITELY know what your niche is, then just go for that.

The problem is that what you think is a good target market for you may not be. Conversely one of my niches - R&D tax credits -was not even on the radar when I set up back in 2009.

Farming was. After all, my brother in law is a farmer and I have a few contacts in the local farming community. I gave it a good go but I have NEVER had a single client in this sector.

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to mr. mischief
16th Jun 2018 22:34

Agreed.

Most start up practices don't have a niche in mind , in most cases they just want to work for themselves and provide accountancy and tax services.

I look at our practice now and it could be said we have three niche sectors, three clearly defined groupings of clients/services - none of which were in mind on day 1.

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14th Jun 2018 09:21

There is room for both.

I market on being niche and pick up work county wide which I wouldn't get a sniff of otherwise, and can charge a premium for.

Its much easier to target websites for a niche set of terms.

Moreover I simply don't know enough about enough areas to do "anything that pays"

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to ireallyshouldknowthisbut
14th Jun 2018 22:50

Did you set up with a niche in mind (and did you thoroughly plan it before you started) or did it develop over a period of time?

There are, as I see it two distinct start ups (sole practitioners):
1. Those that just start and need to get clients on board.
2. Those that are planned (whilst still in employment/with a cash buffer) and can be picky/niche

Most are in the former category.

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to Mark Telford
15th Jun 2018 08:53

To an extent, yes. I only felt comfortable in a few areas. I set very narrow boundaries such as no face to face meetings, no men in vans. In my first year 80% of my work was one type of work, which was quite easy to market for given my existing contacts.

I set off the back of being seriously ill and unemployed. Paying the bills was top of the agenda.

One of the biggest mistakes I made early on was getting involved in a couple of things I didn't know much about, which led to a lot of time and stress for little reward. I would have been better saying "no" and doing a good job for what I could do.

I think you are confusing YOUR experience with the possibilities others may have had different experiences and been successful as a result.

I didnt have wonderful plans written out in triplicate. I stumped up for my prac cert, paid the insurance and tried a few things to get work. One of which was being on the first accountants in the UK to use adwords which as anyone who uses them will know, works best with a niche offering.

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to ireallyshouldknowthisbut
15th Jun 2018 12:08

No point doing work you can't do or aren't comfortable with - it is important to work the way you want to.

I know others have had other experiences - and would be great to hear them. The point being there are practitioners just starting or looking at starting who need advice/support.

Always better for them to hear it from those that have been there. Yes - there is more than one way to skin a cat.

The marketing approach is that you have to niche - I'm saying you don't have to.

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14th Jun 2018 10:18

There was always the perception that accountants make money whatever the economic outlook. i.e. we make money out of clients doing well in the good times and then make money out of the insolvency process.

There is a degree of truth in that, as a general practice will have clients in numerous sectors, so when one sector is in recession, another is booming, and so we are cushioned to a certain extent.

The risk with getting into a niche is that your fortunes rise and fall with the sector you specialise in - such as construction or retail.

With some specialisms such as IT contractors or R&D, a change in legislation can cause your entire client base to disappear.

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to jon_griffey
14th Jun 2018 15:19

YOu do need to have multiple streams IMO (we cover broadly 3), but even if you do go "all in" to one sector the fact is people need their accounts doing it they make a profit or a loss, and need as much help starting and growing as shrinking and selling.

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14th Jun 2018 22:05

An excellent article which I enjoyed reading.

I've been going on my own for two years now and thought my turnover was very respectable, but after reading £150k after just 18 months, then maybe I should just throw in the towel now!

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15th Jun 2018 07:46

Well done Mark on what you achieved in your first 18m.

The question is whether your experience is specific to you or is more generally applicable.

I note that you set up your practice after many years of acting as an FD. This will, I am sure, have had a very positive impact on your ability to impress prospective new clients.

You may not have consciously focused on a niche type of client but I’m sure your style, background and approach will have appealed to a particular type of business owner.

Perhaps we have different views as to the meaning of the ‘niche’ concept.

I have worked with many, many sole practitioner accountants over the years.

Those who have struggled to reach £150k turnover (before working with me) followed the approach you advocate.

They spent hours running to numerous networking events - without building any relationships and without doing or saying anything that ensured they were remembered, referred and recommended. Your background and confidence will have helped you here.

They invested good money in a ‘me too’ website that suggested they were just another boring accountant. Your commercial experience will have enabled you to stand out.

They are tired and frustrated from the stress and strain of competing for work on price. And they have so many low fee clients that they don’t have the time or energy to seek out the sort of work and clients they really wanted.

I encourage accountants who struggle to generate the fees they want, to look for ways to stand out from the crowd. My 7 point framework addresses this in more detail.

I’m sure that your background and experiences enabled you to stand out. And that’s why you were so successful so quickly. (Compared to many others).

I’m curious as to the average fee of the clients that generated that first £150k turnover. I’d expect it to be much higher than the fees typically charged by startups who take on anyone and everyone as a new client.

There is no doubt in my mind. The more focused an accountant can be (even when starting up) as regards their ideal clients the more chance there is that other people will recognise when they can recommend and refer you to people who need your services. But I agree, it’s not the only route to success.

More here: http://bookmarklee.co.uk/what-if-you-dont-want-to-go-for-a-niche/

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to bookmarklee
15th Jun 2018 08:57

Much as I would hate to agree with you Mark L ( :P ) I think you have nailed it.

its one thing to say "This works for me"
Its quite another to say "Only my way can be successful"

There are many paths to success.

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to bookmarklee
15th Jun 2018 12:20

Hi Mark - interpretation of a niche - well that's a topic in its own right.

There is a huge amount of confusion surrounding niches and it shouldn't be a barrier to starting out just because you don't have one.

Working with SMEs or being a Xero only practice isn't a niche but if you market yourself as that you will pick up business.

Yes, I believe background - experience outside of practice is very important - it allows you to engage with business owners on a different level.

Fee range - £500 to £10,000+ really depending on client and services provided.

Very few sole traders, mostly limited companies.

I believe most people massively neglect their personal network - this can make a huge difference.

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By bac1703
to bookmarklee
17th Jun 2018 19:40

I'm very intrigued with this thread and replies from everyone with differing views. I can resonate with all views expressed as I started my practice from scratch and in exactly similar fashion to Mark’s.

Though turnover in second year was not as high as £150k, it certainly doubled with focus, dedication and no niches.

My experience in the commercial industry did help as I was able to develop and utilise efficient and effective processes that reduced admin work coupled with the help of my partner!

Now approaching a much higher turnover, I’m now looking into niches and being more selective with the type of clients and work we wish to do.

I did harness my personal network at the onset and it is the same network that’s enabling the growth via recommendations and referrals.

I’m a firm believer that there is always more than one way to achieve a goal.

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15th Jun 2018 08:21

What's not been mentioned is personality and ability to market and sell. That's what's so lacking in many accountancy firms.
And that's a big part of what's helped Mark be so successful in my opinion.

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to Moonbeam
15th Jun 2018 10:55

Moonbeam wrote:

What's not been mentioned is personality and ability to market and sell. That's what's so lacking in many accountancy firms.
And that's a big part of what's helped Mark be so successful in my opinion.

That is so right. I remember being told when I first started up that it is more important to be a good salesman than a good accountant.

I think what is lacking in many established firms is that the partners get promoted from within the firm and you find that there is nobody that the ability to sell. You need people that have started a practice from scratch who learn to run a business the hard way - that if you don't sell, you don't eat.

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15th Jun 2018 22:31

A great article Mark, with some excellent follow up comments.

Whilst the benefits of having a niche business are obvious in the real world it is just not practical unless you have a pot of cash or a specific set of circumstances prior to starting your practice, as you point out.

Anyone trying to do this without the above would end up back in employment within 6 months with shattered dreams.

For me niche practices fall into 2 categories.

1. The industry specific specialist firm.
2. The system specific firm or compliance factory dealing in simple business produced at a price but at volume.

The first is only possible if you have worked at say manager level in a large firm leading their healthcare division or similar, you tap up the people who you like, jump ship and have a ready made niche practice. Very few people would actually be in this position, fewer still would have the balls to leave this position of comfort and give it a go on their own.

The second you need a track record in that if you a contractor specialist you need a lot of them, do a good they will tell other contractors. On day 1 you have no track record and if you have 2 contractor people will know you are not a contractor specialist, and traction will be slow.

If you want this type of niche i think you would struggle to grow quickly unless you had cash for a big marketing campaign to dominate your sector.

You cannot just wake up one day and decide you are a niche firm unless you have specialist industry that few others have or you have an easy route to lots people within an industry sector.

There is something like 4.7m small business that only have 1 person working in them. These all form the small business within you catchment area so why would you not want them because they didn't fit into your perceived niche.

Accounts are accounts, all businesses sell stuff and have expenses. Most small business is simple and have basic tax needs their is nothing specialist about most of the 4.7m 1 man bands. There is a lot to be said for easy jobs that do not over commit you as long as they priced at a competitive rate.

So as Mark says forget a niche and focus on getting some general business from you local market.

Even poor accountants keep clients, people don't just leave their accountant at the drop of a hat, it takes a lot often to get people to move unless he has messed up.

To get work of established firms you have to realise they are taking a chance on you as whilst their current guy may be average that is enough to keep people with them.

You have no track record, you are a risk you have to offer something to make that risk worthwhile. If the client is with an old school once a year accountant , offering Xero and more regular contact maybe enough to get them to jump ship. Pricing is another way. Remember the long established 4/5 partner firm will be working on a 30% profit margin. As a sole trader you should be making 70 to 80% so you can be cheaper than the high street firm without being cheap.

A mistake I made was competing with other sole traders which I ended up busy but not making enough cash.

I also under estimated the working capital need to set up as a sole trader. A few grand gets you a laptop and some software which will do you to earn some extra money next to your day job but it won't build you a business.

If I was starting tomorrow I wouldn't do it unless I had £20k to bang in with enough money outside the business to pay my bills for 9/10 months. I would use the money to get a 12 month serviced office, website, SEO and PPC + outsource social media. That should set a sales funnel up for you without you involved leaving to convert and do the work.

If you don't know how to do marketing outsource it, you just waste time and money otherwise.

Had I done this I would be where I am now in half the time, as the first 18 months were slow to get going whilst I built a reputation.

Now 3 years in I have the luxury of sufficient earnings where I can pick and choose my clients, I have picked a natural path of who my ideal clients are things are going really well. Despite having very strong industry specific skills after about 2 years I realised that the industry was not my niche but the type of people I actually work with where.

I had always worked as FD to very entrepreneurial business owners who take big risks and only look forward. My natural position is to be the straight man to these often eccentric business people a sort of Sherpa Tensing to their Edmund Hilary.

I would keep things tight at the back with good systems and cash control and pull them back when they were risking too much. This is my niche if it is a niche.
Often these guys are often one decision from disaster I stop them making that bad choice.

They are often with accountants who are very cautious and they feel they do not support them.

People come to me now for this as have delivered results for others, "if you can keep him on the straight and narrow you must be good".

I could not have done this from day 1.

In the early days forget about a niche just get clients on board at a fair fee and do a good job. Once you are earning decent money then focus on working with the people you enjoy working with, which need not be industry specific.

Also listen to people who have been who have been and done it, (Mark has helped me loads since I started as we have a similar background) and not people who sell you a good sounding story that is just not practical who only have theoretic knowledge of the industry.

Great article Mark, when can we expect the "Grow your practice book" available to download free on Amazon.

A key part of networking is also building a ring of trusted advisors around you of lawyers, IfA's insurance brokers, as an accountant you are often the first port of call when anything goes wrong so your clients need to be in safe hands. In turn people will pass work back to you and it keeps all the flow of money tight and clients won't leave when their business is fully supported without stepping outside your inner circle.

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16th Jun 2018 20:56

I've just logged back into this thread since my post near the top. It's obviously a subject that is close to the heart - or the wallet! - of a lot of contributors here. Well done for a very useful blog.

When I started out I had bought into the "USP" B.S. that I had learnt from VC's. Big mistake. Anyway, I came up with a niche that involved some accountancy but also much else. Commercially it didn't work. By chance I started to pick up routine a/cs + tax work that we're all familiar with. It dawned on me that there was loads of it to go around and the key to a successful business was getting the marketing right.

By the way, contrary to impressions that may have been given here, in person Mark is really really nice. But the accountant in me does want to see more of the metrics for the 150k.

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to Red Leader
19th Jun 2018 22:02

Metrics - how much detail do you want? I'll probably cover it in more detail in another post.

Very few sole traders <10. 59 Limited companies where a significant number wanted more than basic compliance - so several with monthly/quarterly management accounts and meetings.

Two sizeable consultancy roles as well during the first 2 years which underpinned the growth.

I tended to avoid bookkeeping, however I have changed tack on this now.

Very few manufacturing or cash based businesses, mostly professional services and construction.

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to Mark Telford
20th Jun 2018 15:32

Thanks.

So an average per ltd co of about £2k. For what was I imagine back then a one man practice, I think that is higher than average. The meetings and management accounts you mention would have taken up the time plus the consultancy roles plus marketing time ... you must have worked incredibly long hours. You were also prepared to quote higher fees than a lot of start ups who shy away from that.

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to Red Leader
20th Jun 2018 18:05

Our pricing has never been low, its also not been much of an issue when meeting prospects - most new business is by referral/recommendation so price doesn't seem to be an issue.

Hard work - absolutely - 60+ hours a week for the first 2 years.

Worth it?

Definitely.

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By Matrix
17th Jun 2018 13:22

I agree Mark. I am only now targeting my ideal client and I have been going 5 years. If I had started with a niche then it would have been tax planning and I don't find this is a standalone service which my clients require.

I said yes to everything until recently and don't have many regrets.

You also have to try different things, I no longer touch retail businesses or start ups. However, while my ideal client is a family service business with their own bookkeeper, we are being reactive to clients' needs and have just become a Xero partner for those clients who also require bookkeeping.

While bookkeeping is less glamorous than tax planning, you can only offer the services which clients want to pay for. At the outset you wouldn't know this yet so no point trying for a niche.

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19th Jun 2018 11:08

Here is a niche:

Take on profitable business, great clients and deliver world class service. Choice of quality clients (communication, business acumen and just generally good allround nice people, management of debtors, choosing the right staff and using technology and partners to maximise your offering and differentiate you from the market).

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to Lesser Tax
19th Jun 2018 21:47

That wouldn't fit a classic niche but does demonstrate a great business model.

Picking clients you enjoy working with is important, if they're profitable and you're able to charge good fees you can look forward to a long and rewarding relationship.

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By swirral
19th Jun 2018 11:15

I think the OP is correct in saying you need to get what you can in the first 18m, but you can filter what comes your way by having a vision of what your ideal client is before you start. Having clients that don't fit is a time & energy drain.

When we first start out, clients buy into us as a person. We are all accountants but all very different in character.

My background is as a commercial FD in the tech industry. I have a very different approach to someone who's spent their career in practice. And clients see this.
This in itself creates the niche.
The skill is recognising it in yourself and only spending time in that space.

Referrals see me as the go to person for tech enabled fast moving businesses with investment. My experience has ensured this credibility.
I'm highly unlikely to get a traditional construction company referred to me. And I'd pass them to a colleague if I did.

So I'd say I have a natural niche.

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19th Jun 2018 11:51

I started up from scratch in 2003 and this article resonates with a lot of sound advice. I supplemented my income whilst building my client base by taking on contract work on a maximum three days a week basis. This was not in accountancy, due to other skills I had, but it serves to support the point made in the article that you need something to pay the bills.

2003 was in the infancy of cloud accounting - there wasn't any! I decided to set myself up differently from the typical high street practice, by offering an accounting system for all clients and working with them regularly (not just once a year). I couldn't do this until Liberty Accounts came along in 2004, so I muddled through checking out various lightweight online software, until I found the right product. It was a big decision to turn away clients who weren't ready for the cloud.

My background was in food manufacturing, including the engineering and construction that supports that industry. My first clients were from those sectors and resulted from networking - basically just letting people know that I was starting up. Interestingly, the contract work I needed came from this networking too.

These initial clients over the years have introduced me to a number of new clients and they, in turn, have introduced further clients in various sectors until I was at full capacity. Being introduced is the greatest way to add new clients and as you add more clients you will benefit from even more introductions. This is the best way to build a business once you get past adding the first few new clients.

By then, I had a pretty good idea of the sectors I didn't want to operate in. Retail and cash handling businesses being top of my list to avoid. So over the last ten years, I have gradually changed the business into several niches where I do want to operate and moved away from clients in the no go sectors.

I agree with the general precept of don't go for a niche to start with. Think about building an income and then slowly starting to specialise. You will stay saner if the bills get paid. You will also add valuable experience in the sectors you want to avoid and this will help you give advice to your existing clients. You will be able to advise a builder who wants to buy and run a pub or convert it into flats as his two options, for instance.

Good luck to anyone out there, who is about to take the plunge, because this article and the various contributions are a valuable starting point.

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19th Jun 2018 12:14

Mark
Interesting and thought provoking. The proof is on what you have achieved, honesty I’m surprised but impressed.
I agree about the niching, not sure about the diy and subcontracting, and certainly (for me anyway) one day of working with my partner was enough

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19th Jun 2018 12:39

This thread reminds me of one of many quality bits advice passed onto me by my dad.

The story of the 2 bulls.

A dad and son bull are standing in a field, the young bull says "Dad, Dad why don't we run down the field and [***] a cow".

The dad replies "Why don't we walk down and [***] all of them".

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to Glennzy
19th Jun 2018 13:28

But what did the cows say?

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19th Jun 2018 13:35

Specialising in servicing a single industry (niche) has pros and cons.

PROS
1. With time, you become the go-to person for anyone in that industry. Marketing costs become very low, new business walks in the door.
2. Operationally easier to streamline internal processes when all clients have the same background.
3. Easier to replicate advice from one client to another.
4. Perhaps most significantly, marketing catchment area becomes bigger. As the go-to practice, prospects from a much wider area will be prepared to travel to your office.

CON
5. The financial success of the practice is tied to one industry/sector.

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19th Jun 2018 15:28

Depends what you mean by niche. I would NEVER niche on industry type. You could niche however on things such as only offering tax advice and services.

I have grown fairly rapidly a successful practice from scratch, by not niching

More important than niching is you and how you come across on your website and in all your marketing efforts. If people trust and like you they will come to you.

People buy people not services.

Also you can do both have one general website and one niche website or landing page.

The other thing is believe in yourself, if niching works for you great, if it doesn't great also.

I have an aversion to so-called 'consultants', who try and tell you the best way to do something.

There is no best way and there are no quick answers. Read alot especially about marketing and try everything then figure out what works!

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to indomitable
19th Jun 2018 22:13

Well done on growing a successful practice. Sounds like your approach was very similar to mine.

I hope you don't think I'm putting myself up as an expert/consultant!

I'm saying what worked for me and why. There are very few examples to small practitioners starting out to show how they can grow a practice from nothing on day one with bills to pay at the end of the month, to something that provides them with a comfortable living in a short space of time.

Its been a great experience and I won't say I should have done it earlier - because I wasn't ready for it.

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