When Peter Freuler took over his father’s Kissimmee, Fla., CPA practice in 2005, it was highly dominated by 1040s, which included filing 700 individual returns and 125 business returns. At that time, his firm’s revenue was approximately $245,000. Today, his firm has more than doubled its revenue to reach $525,000 in 2013.
How did Peter change the direction of his business and grow revenue? By not being afraid to evolve. He strategically changed the direction of his business by moving from individual tax engagements to working with small businesses.
“We’ve steadily and strategically grown more business focused,” he said. “We don’t turn down individuals, but we are not trying to be H&R Block, either.”
Focus on Real Estate
Peter recognized a need to market his firm to attract more clients. He knew that targeting just anyone with the need for CPA services would not work, so he decided to create industry niches to differentiate his practice and highlight his expertise.
“Our original niche in dental and medical accounting started with just one client. This part of our business is slowly eroding due to managed care and other factors facing physicians,” he said.
As a result, the need for another business evolution occurred. Peter is augmenting his medical niche with a real estate niche. The change is happenstance; his practice is located outside of the tourist mecca of Disney’s Orlando.
“Around 2008, the drop in the property value of vacation real estate dropped in the Orlando area,” said Peter. “Individuals and investors started buying vacation condos as investments and called our practice, asking questions. Pretty soon, we were able to answer those questions easily; a niche was born!”
Peter’s clients include international investors who have purchased U.S. property, as well as brokerage firms, property management firms and individuals who purchase the property as an investment.
“Some of our clients receive an easy 15% to 20% yield on rental property investments, but they need help with some of the more complex tax issues they face,” he said.
The Niche Advantage
As Peter can attest, establishing a niche helps accounting firms and other businesses market themselves. The niche differentiates you from the competition, establishes you as a subject matter expert and enables you to reach your target market more easily.
Yet, a niche alone does not necessarily increase your business unless you complement it with marketing, such as his niche real estate website. His primary website, Peter J. Freuler Jr. CPA, outlines all of his services and the industries he serves. Both the main website and the real estate website have keywords tied to Peter’s real estate niche, including the various types of individuals he works with – brokers, real estate agents, homeowners associations and real estate investors – and his location near Orlando.
About 60% of new business comes from Internet leads.
“A lot of clients call us because their former CPA could not answer their real estate tax questions, so they start searching and find our site,” said Peter.
To generate new clients, the firm also does a newsletter and a direct mail campaign targeted toward real estate businesses, such as property managers and brokers.
“I haven’t tried to share my own brand expertise through speaking engagements or educational seminars, so I prefer to let technology do the work,” he said.
Peter added that CPAs need to understand that achieving measurable results takes time.
“I’ve often been asked about the ROI of my marketing. I tell people it is a long-term investment. However, I recently got a call from a new client who received a direct mail piece from me three years ago!”
How to Create a Niche in Your Firm
Although it varies by type of firm and the specific industry, creating a niche in your firm is based on four variables:
- Examine your existing clients for a pattern. If there is an industry you are working with already, you already have the knowledge and experience to prospect for more clients.
- Identify which types of clients you enjoy working with and/or clients who yield a higher hourly fee realization. You have to enjoy what you do, while also working with those who will add to your own bottom line.
- Look at the concentration of businesses in your local market. Examples include technology companies in Silicon Valley, defense contractors in Washington, D.C., or hospitality in leisure/tourist locations.
- Pinpoint your own specialized knowledge. For example, one accountant created a niche in healthcare because his parents owned an ambulance company.
Some examples of niches:
Service Specific Niches Industry Specific Niches
IRS Problem Resolution Oil and Gas
International Tax Nonprofits
Outsourced Controller AgriBusiness/Farms/Wineries
Forensic/Business Valuation Construction/Real Estate
Hugh Duffy is co-founder and chief marketing officer of Build Your Firm, an accounting marketing and accounting website development firm. Hugh teaches a series of Accounting Marketing Workshops; has a LinkedIn Discussion Group called Modern Marketing Methods for Accountants; and provides outsourced marketing for accountants. He can be reached at 888-999-9800 x151, or at firstname.lastname@example.org