In order to run a more profitable tax firm, I’ve always advised tax professionals to specialize.
That means niche down into one or two specific target markets and narrow your service offerings.
We’ve all heard the old cliche: You can’t be all things to all people. And if you try, you’re simply going to spin your wheels and go nowhere fast.
I’ve clearly seen this in myself over the years. A clear lack of focus, changing directions too often, trying to do too many different things. It all results in, well… Zero results. Put another way, he who chases two rabbits catches none.
Unfortunately, I see a lot of accountants effectively doing the same thing. They try offering preparation of every type of tax return, while also doing bookkeeping, while also doing attestation, while also doing tax resolution, while also doing advisory in twenty different industries. They try to offer every possible tax and accounting service under the sun, to every profession, industry, and walk of life, without ever developing deep competency in any particular area. While they might make a living, they never actually build a real firm.
While there are rare exceptions, the majority of highly profitable companies have a narrow focus. They know what they do, and they focus on doing it well. Salesforce doesn’t build cars, and Ford doesn’t build CRM software. Outside of the absolute largest public accounting firms, most of the remainder of the IPA 300 run specialized firms. These firms typically choose to specialize in one or both of the following manners:
1). By offering a very narrow range of services.
2). By servicing a very narrow range of industries or professions.
For example, I know one large accounting firm that specializes in tax, accounting, and auditing for car dealerships. That’s it — nobody else. If you’re a engineering firm, they won’t help you. If you’re a magazine publisher, they won’t help you. If you’re a manufacturing company, they won’t help you.
Car dealerships. Nothing else.
When I operated my tax firm, I offered one service: IRS and state DOR Collection representation. That was it, nothing else. I didn’t prepare tax returns, I didn’t offer bookkeeping. Nope, just tax resolution. On top of that, I had two very well defined niches that I served: Independent trucking companies in five western states, and large TFRP cases post-assessment. That was my universe.
Early last year, during a … Continue reading