Making a Niche Work for Your Firm by Avoiding Key Niche Pitfalls Presented by

August Aquila

AQUILA Global Advisors, LLC

•August is the CEO of AQUILA Global Advisors, LLC which specializes in succession planning, mergers and acquisitions, compensation plans and transformational strategic planning

•Selected as one of the “Top 100 Most Influential People” in the Accounting Profession by Accounting Today in 2004, 2007, 2009 & 2010

•AAM Hall of Fame member, founding AAM Board Member

•First marketing director to become a partner in Top 100 Firm (1985)

•Former partner in top 100 firm – Friedman, Eisenstein, Raemer & Schwartz (FERS)

•Former executive with American Express Tax & Business Services, Inc

Why niche selection is a strategic initiative Niches and the Value Curve Niches move a firm into true consulting Common niche management issues Major niche pitfalls to avoid Marketing and branding issues

Webinar Objectives

A niche market is a focused, targetable portion of a market.

By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. You can think of a niche market as a narrowly defined group of potential customers.

What is a Niche?

Niche work may be more project oriented

Will your partners support the initiative?

Will the firm structure support the niche? Is compensation aligned with the niche

initiative?

Niche Work is Different

What special skills do we need to be successful in the niche?

More nonrecurring projects with client

More cross selling to existing clients

Work done at client’s location

Niche Work is Different

Everyone else is in the niche, shouldn’t we? How does the niche fit into your strategic

plan? Are you organized for a niche? What should niche leaders do?

Niche Selection is a Strategic Decision

MP/CEO

Non Profit Litigation Support

Valuation

Tax

SALT

Int’l

NICHE ORGANIZATIONS

Marketing and Practice Development◦ Becoming the perceived leader

Financial Management◦ Make a profit

Client Service◦ Create client centric culture

Employee Growth & Learning ◦ Develop competencies for partners/staff

Niche Leaders Responsibilities

High Value To Client Unique Work

Hired for Experience Hired for Brand

Name

Hired for Price

Low Value to Client

Niche and the Value Curve

Serving a niche requires that you know more than just accounting and tax

Moves a firm from compliance to wisdom and experience

Creates specialists and experts

Niches move firms into consulting

Needs passion for the niche Lives and breeds it Is a famous person or becomes one in the

niche

Niche Champion

COMMON NICHE MANAGEMENT ISSUES

Taking on too many niches at once Not dedicating true leadership to our niches Not developing written plans for our niches Under-committing resources to our niche Treating each niche like all other firm services Not communicating enough about our niches Not cross-serving our clients with our full service

offering Other (not specified here)

Poll 2: Which of these common niche management issues if your firm engaged in? (choose all that apply)

Avoid saying your firm has specialties in too many areas, spreading your resources too thin ◦ A niche is an area where you have “deep”

expertise and more than just a concentration of clients

◦ How many of these can your firm size sustain? Carefully select your true niche investment

areas

A Mile Wide And An Inch Deep

You should choose your “true” niches based on those that:◦ Have the most upside in the marketplace◦ Your firm has some experience and success

serving◦ You have some resources from which to leverage

(either internally or through talent acquisition)◦ Hold promise for integration with other services

and/or niches

Choosing Your Niches

Specialty Services

Not-for-Profit (NFP)

Construction Oil & Gas Closely-Held Businesses

Assurance

Tax

SALT

Client Accounting

BV

Forensic Lit Support

Financial Services

17

Product/Service Mix -- Example

Identify ONE owner at the leadership table to drive your niche(s) forward

This person should be required to:◦ Annually produce a true business plan◦ Marshall and manage the firm’s niche resources◦ Devise and execute the firm’s marketing and BD

strategies in this niche area◦ Own the outcome of the financial performance of

the niche

Dedicating Leadership

The niche leader’s compensation should be tied to meeting specific milestones and goals

They should have some amount of non-charge time allocated to grow and develop the niche

Dedicating Leadership

We have written plans for each of our firm niches and we review and update those plans annually

We have had written plans for our niches but they aren’t reviewed or updated regularly

We have written plans for some of our niches but not for others

We don’t have any written plans for our niches We don’t have true niches as has been described Other, not specified

Poll 2: What statement best describes where your firm is in terms of niche plan development? (choose only one)

Your niche initiative plans should include:◦ Market dynamics discussion◦ Existing business overview◦ Niche SWOT Analysis ◦ Niche Competitive Analysis◦ Niche differentiation position◦ Ideal target client definition◦ Product/service mix offered within the niche◦ Pricing strategy

You Should Plan For Niche Success

◦ Marketing strategy (branding and lead generation)

◦ Sales approach◦ Service Delivery approach◦ Staffing/training plans◦ Infrastructure requirements to support the niche

(IT, facilities, admin)◦ Identification of critical success factors◦ Specific financial and non-financial measures of

success

You Should Plan For Niche Success

◦ The plan should call for specific commitments of dollars, non-charge time and headcount needed to be successful each year It should also project what ROI (or lack thereof) there

will be each year◦ Your firm’s partners must agree to these “asks”

and commit the resources necessary to drive niche growth – which can take 3 years to really “roll” in some cases

◦ Patience and true commitment are required

Don’t Under-Commit

◦ Each niche will present a different model for managing and growing the practice

◦ Many niches follow more of a consulting model, where the business is not an annuity and there is a need for more practice development resource to drive growth

◦ The approach to staffing can also vary widely – some being lower leverage models like business valuation and litigation support

◦ Understand the successful approach to your chosen niches by studying the models used by other firms

They Aren’t All The Same!

◦ Ensure that your niche leaders appear at the partner table regularly to share their status against their plan Regular accountability and communication of

progress and set backs help build partner confidence and keep commitment high

◦ Ask regular questions of the niche leader when “grumbling” or disappointments occur Often these grapevine complaints are a lack of

understanding or mis-set expectations and communication can keep relationships on track

Communication Is Key

◦ The niche leader must build credibility and trust by keeping their commitments and communicating

◦ One or two early adopting partner champions should be identified and their top 25-50 clients should be discussed for potential need

◦ Some industry niches do not lend themselves to as much cross-serving in terms of incoming leads Instead, the industry team will bring service line

leaders in to support their leads

Cross-Serving Critical Success Factors

◦ In many cases, niche leaders have to build their own markets, which is what we’ll explore in our next segment

Cross-Serving Critical Success Factors

Marketing & Branding Your Niche

◦ By looking at what has worked in the past, and what has not worked, you will realize which initiatives have been ineffective and avoid them in the future.

◦Some initiatives may have been effective if they were carried out in a different way in the past.

Creating An Effective Plan

The combination of your firm’s sales strategy & marketing efforts

What Is Business Development?

Sales Marketing

Business Developm

ent

◦Defining the current number and types of clients and niche revenue

◦Creating goals for the number and types of clients and niche revenue

◦Moving all relevant clients under appropriate umbrella

◦Establishing team development plan (CPE, publications)

Important Elements To Your Niche Plan-first Steps

◦ Creating client retention strategies for team (client relationship management)(project management)

◦ Becoming recognized through speaking and networking (client referrals)

◦ Becoming recognized in the marketplace (branding and design)(website builders)

◦ Creating a prospect list (D&B, zapdata)

◦ Communicating with prospects, clients and referral sources (meetings, phone calls, social media)

Important Elements To Your Niche Plan-business Development

SUPPORTED BY:• (client relationship management)• (project management)

Creating Client Retention Strategies For Team

LinkedIn

Twitter

Facebook

Social Media

BizActions◦ www.bizactions.com

SalesFUSION◦ www.salesfusion.com

Benchmark Email◦ www.benchmarkemail.com

Constant Contact◦ www.constantcontact.com

Mail Chimp◦ www.mailchimp.com

Email Marketing

D&B◦ www.zapdata.com

Sales Genie ◦ http://www.salesgenie.com/

One Source◦ www.onesource.com

Vendor Genie◦ http://www.vendorgenie.com/

Info USA◦ http://www.infousa.com/

Prospect Target List

• Niches pay more than general service areas

• Clients today, want and demand that their service providers have specialized knowledge

• Successful niche firms/niche leaders have a passion for what they do

Final Thoughts

What did we forget to mention? What did you forget to ask?

Questions and Answers

For more information please contact:

August J. Aquila952-930-1295aaquila@aquilaadvisors.com

For More Information or Help