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CPA & Consultant for Accounting Firms
Pick your market, but do it right
Happy Frye-Day.
I've seen many firms start and fail in my years talking to firm owners.
"Riches are in the niches" is a common mindset, and one that makes sense because it helps you focus your marketing, decide who to say yes to, and, more importantly, who to say no to.
The reality though is that unless you have a war chest (venture capital, PE, massive savings, or, worst case, as in when I started a firm on credit cards), going too narrow can lead to pretty big problems if you're not willing to do the work today for people who show up and are willing to pay you a fair price for good work.
There are certainly risks of going too narrow. If you haven't mapped out your TAM, or total addressable market, you'll want to do this before you focus too much.
How many shave ice stores are in Salt Lake City versus Hawaii? Probably a different market, and maybe less likely to succeed in Salt Lake than in Hawaii. The broader you go, the more people you may attract, but your message loses its edge and waters down.
If I were advising a firm owner today, I think it's great to have a niche and focus on one or maybe even three verticals, as we might say in marketing, in order to hone your message, dedicate resources, choose your conferences, and pick your partnerships.
Matt Tait posted about this recently and Ashley Connell put it best in the comments: a niche is a magnet, not a filter. Going back to this: if you're starting a firm and want to make it work, be sure you're saying yes to people who are easy to work with, have the money to pay you, and are in an area you can competently serve.
That doesn't mean you do it forever. You do it up to a point, and then you're constantly grading and culling your client list.
This is the part people usually forget when they're advising on picking a niche: you can accept clients today that you won't later, and your messaging can evolve over time. There's no perfect answer. It depends a lot on your situation and how you're capitalized.
77% of top-performing firms specialize in at least one vertical. But most successful "niche" firms actually carry 40 to 60% niche revenue, not 100%. The claim and the practice are two different things.
Playbook checkpoint
Foundation Page 1 in the Playbook asks: "Who is your ideal client?" Most people skip it, or write something vague like "small business owners."
Pick the group you want to market to and build expertise around. If you haven't started the Playbook yet, this page is why it exists.
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On the mic
I was on the Canopy Practice Success podcast this week.
We covered how I built my practice to $500K in recurring revenue in a little over four years without raising a dollar, why one S-Corp client is six touchpoints a year instead of one, and why March 1st to April 15th is the best window to launch a firm, when every established firm has stopped taking new clients.
• Listen on Apple Podcasts
• Listen on Spotify
✦ New section: How I AI
Wins and losses from putting AI to work in my day-to-day.
New win: Podcast Guest Prep
Every week the podcast has a new guest, and every week I used to spend an hour or two on LinkedIn and Google building a picture of who they were, what they'd built, and what would be worth asking.
Now I let Google Gemini do the first pass. It reads my calendar, looks up the guest, drafts their bio, and puts together a starter question list. I clean it up, drop it in a Google Doc, and share it with the guest a few days ahead so we're on the same page about what we'll talk about.
The Canopy podcast drops a new episode every Wednesday. If there's someone you'd like to hear on it, let me know, and we'll try to make it happen.
That's it from me. If you're wrestling with the niche question right now, hit reply and tell me what you're working through. I read every one.
—
Luke
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