Deciding What’s Right for Your Firm.
An industry specialization strategy can provide your CPA/consulting firm with a road map for organic and acquired growth. It’s one surefire way to accelerate growth for your firm and your people. Done right, it’s a comprehensive strategy in the marketplace where you compete for both clients and talent. Industry specialization is a primary driver for attracting and retaining both the best talent and preferred clients ─ your firm’s most important assets!
The Path to Specialization
Specialization is often described as a “niche” or “industry.” It’s important to be clear that specialty services or narrow technical areas of expertise, while certainly specialties, are not industries. These technical specialties and unique service offerings can also be differentiators. Service specialties can be industry agnostic, delivered to clients across a broad range of industries, or just a few, or just one. But service specialties are not industries. While there may be a defined target market for these services that cross industries, they are not industries.
For example, an SEC practice that focuses on serving public companies that require specialized technical expertise is a great differentiator for a firm, but it is not an industry specialty. Companies in many industries that have opted to take the initial public offering (IPO) or special purpose acquisition company (SPAC) route need technical expertise to do so. They also will value a service provider’s deep understanding of their specific industry, their competitors, and the impact of the economic environment on their industry and their business. Demonstrating deep industry expertise, which is layered on top of the technical SEC service line expertise, builds trust and reliance on the service provider’s advice.
One reason it’s so important to distinguish between service specialties and traditional industry specialties is the enormous opportunity it opens up for collaboration between these two different practice areas. Your firm’s industry practices develop important networking relationships, referral sources and reputations as industry advisors. The industry practices can grow by offering the right mix of specialty services tailored to resonate with that particular industry target market. The collateral benefit is that the specialty service can grow by identifying clients in industries that benefit from that specialty and leveraging the industry practices as a conduit to reaching these industry clients and targets. For example, R&D tax credits are particularly well suited for tech start-ups and food processors. A firm’s R&D tax credit experts, therefore, should be encouraged to collaborate with the technology and the food and beverage industry teams for introductions to clients or to jointly target new businesses that are good candidates for R&D tax credits.
Internal messaging to firm professionals should make it clear that they can choose a service offering specialty. Or they can choose an industry specialty. Examples of service specialties within the tax department are R&D tax credits, cost segregation, international tax, transfer tax, and state and local tax. Within the advisory department, service specialties often include business valuation, IT system selections and/or system implementations, cybersecurity and outsourced services such as outsourced IT, accounting, CFO, or HR services. Assurance-related specialties include transaction advisory services (usually including buy-side or sell-side due diligence, and quality of earnings reports), SEC services, and risk advisory services.
Traditional industry specialties include construction, real estate, financial services, food and beverage, healthcare, technology, life sciences, cannabis, nonprofits, government, and education. A broad spectrum of compliance and specialty services can be bundled and targeted to serve companies within these industry groups.
Regardless of which option they choose, the professional is moving from being a generalist to being a specialist. Even better, some professionals will choose to have a dual specialty ─ in both a service offering and an industry ⎼ which will make them even more highly valued in the marketplace, thereby commanding higher fees and strengthening both the firm’s and the professional’s reputation for deep expertise.
