If you’ve decided to launch a new practice or small firm from scratch, I’m going to give you some simple advice that’s extremely difficult to follow but necessary. Ready? Do less!
What I’m really saying is don’t fall into the full-service trap, trying to be everything to every client like the bigger firms do, because it probably won’t work. Not only will it make you and your practice indistinguishable from the other firms out there (i.e., another steer in the herd), it will remove two of the biggest advantages that any new competitor has:
- The ability to focus on niche markets and customers who you feel are being ignored or underserved by the rest of the industry.
- The ability to break new ground and use new tools and approaches that you know in your heart are superior to the traditional way of doing things, but aren’t yet being fully adopted or embraced by the established firms.
The strategy of doing less makes perfect sense in business as in life. If you ask me, trying to do everything and being a generalist in the accounting industry is a recipe for failure. It doesn’t say anything about who you’re trying to reach, what makes you special, or what problems you’re trying to solve.
Furthermore, it’s unrealistic for a new practice that’s just opening its doors to think it can offer the same range of services and expertise as an established firm that’s been in business for more than 10 or 20 years. It took those firms a long time to get where they are, there are seasoned pros with tons of experience at the top, and they’ve figured out their business model. They’ve earned their spot and have the capacity to do more.
So why in the world would a small practice with limited time, resources, and ability to execute try to emulate that approach? I think part of the reason is that CPAs are logical thinkers, and many of us want to do everything.
To some degree, it’s hard-wired into our personality to be generalists. Furthermore, it’s the approach that most CPAs were trained and certified on: bookkeeping, financials, tax, and overall compliance work. When you get that CPA license under your belt, there’s a general notion that you’ll do whatever is needed, for any client who walks in the door.
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However, after a few years, most of us start to learn the universal truth that governs the accounting world: You can’t know everything. The customer base and knowledge requirements are too vast.
Wise accountants will gradually narrow down their skill set and practice areas over time and figure out distinct ways to specialize. They become better at identifying their ideal customers and sweet spots.
In the case of my practice, the process of breaking away from the generalist approach and charting a narrower, more specialized course has taken a long time and a lot of soul searching. It sounds so easy to do in theory, but in practice, specializing is painstakingly difficult to execute. Essentially, I’ve had to dismantle the machinery that I learned how to operate in my former life and start rebuilding from the ground up, with no instruction manual. Along the way, I’ve come to believe that doing less is a competitive advantage that small firms should take advantage of.
In particular, offering a limited range of services is a really good idea, not a bad one. It forces you to think like your target customers and try to figure out what they really, truly need.
It’s relatively easy to put a laundry list of services on your website and say you do it all. Coming up with five key services that hit your customers right between the eyes is a heck of a lot harder to do.
Saying less and doing less gives customers a story that’s more engaging and believable. It’s also a far more pragmatic business strategy when you’re just starting out.
And who knows – if you do a really good job of making customers happy in the small pond, then maybe you’ll work your way up to larger waters someday and become a more versatile, all-purpose firm (if that’s what you really want to do).
In the meantime, remember these words: “The essence of strategy is that you must set limits on what you’re trying to accomplish.” – Michael Porter