If you are reading this, you probably are already offering Strategic Advising Services, or researching the topic for your firm. Some of you may already be using the LivePlan Method for Strategic Advising.
I’m guessing that you also have a desire to move from being just a historian for your clients’ small businesses to someone that provides more value, and helps small business succeed, which ultimately will lead to more value for you (e.g. more revenue for your practice).
I’m also guessing you aren’t too sure where to start. I suggest you start with a niche.
Why start with a niche?
Increase your industry knowledge
By picking a niche, you can start to gain knowledge in that niche. This maps directly into the LivePlan Method for Strategic Advising. During the Kickoff Phase in Step 1.04, you set up benchmarks against small businesses in the same industry as your client. This is where you can start to gain your very first industry knowledge about your niche.
Learn and integrate fewer apps
Once you’ve started to gain some knowledge in a niche, you can then focus on fewer apps. With ecosystem of almost 5000 small business apps out there, it is next to impossible to learn them all for all your clients. By focusing on a niche, you can reduce that number to a manageable amount of apps that you need to learn. Eventually, you’ll combine your industry knowledge with your knowledge of the apps for your chosen niche, and create a tech stack that you’ll build on top of your cloud accounting system, which you can repeatedly implement in all your clients’ businesses.
For example: Brewery niche tech stack = QuickBooks + Ekos Brewmaster + HubDoc + Bill.com
Build your expertise
Once you have taken a few clients in your niche, your confidence in that niche will increase. You’ll know exactly what you need to implement for each client, which is essentially the basis for creating your processes.
Scale faster and more profitably with capacity planning
Understanding your processes is what enables you to truly understand your costs, because you define everything you need to complete the process and deliver to your client. This work, called capacity planning, gives you the confidence to move to a fixed pricing model, because you know exactly how much work is involved to take on the next client in your chosen niche.
For example: If you take on four bike shops in a row, you’ll be very confident you know what is involved for bike shop number five, versus having five clients in a row each with very different businesses.
This post discusses the importance of documenting and scaling processes to ensure success in your firm when offering advisory services. I also recommend that you check out Process Street to help you document, assign, and even automate many of your processes. There is even process management software specific to accounting and bookkeeping firm workflows—check out Aero Workflow, Karbon, and JetPack.
The higher your level of industry expertise, the more valuable your services will be
O.K., great—you now have a niche accounting practice offering a base level of advising services.
I have no doubt that offering Strategic Advising services will help you get more value. You’ll be able to steer and guide your clients based on some industry ratios, and for most small business owners it’ll probably be a hundred times more advising and planning than they are currently doing themselves.
But, you may hit limits on the depth and quality of the advising you are doing and your ability to scale your advisory services, and it might ultimately hold back your true potential value.
This is where the real power in choosing a niche comes in. Instead of having some industry knowledge and advising clients based on some industry ratios (which in theory they could get from any other advisor), you are a higher level of advisor because you are now an expert in their business niche. You may eventually know more about running their business than they do.
Move from cost-based flat fees to value-based billing
At this point, you’ll be “walking the walk and talking the talk” for your target industry, making it easier to market to and bring in more clients in that niche.
With your high number of clients and high level of industry expertise, you’ll be able to move from your cost-based, flat-fee pricing model to value billing, because you’ll have the confidence to know exactly how much value you are bringing to clients in your niche.
Value billing is more straightforward with a niche practice. How, for instance, are you supposed to know how much value you’ll bring to a dental practice if you’ve never taken on a dental practice before? It might feel difficult. But if you’re clients are only dental practices, you’ll have plenty of experience bringing value to that niche, and so will have the confidence to price for the true value that you bring the client.
With your prices right and your confidence and knowledge high, your niche advisory practice will soar, and you will be able to feel truly fulfilled while helping your clients achieve their dreams!
Thoughts? Questions? Comments? Please leave them below.