Source: Partner’s Report for CPA Firm Owners

For a CPA firm more interested in profits and independence than growth, differentiation and specialization are the keys. Forming alliances with other firms, smaller and larger, is also key. Partnering with other firms can allow you to provide a wider range of services to satisfy the needs of your clients and access to staff when needed.

Niches are important for small firms for the same reasons they are important for large firms. Niches are more profitable because they allow you to offer greater value to clients.

The PCPS defines small firms as having five or fewer CPAs. These firms are selecting niches such as construction, real estate, physicians, and nonprofits.

If you decide to merge rather than remain independent, having niches will make you a more attractive merger candidate. If you decide to remain independent, you will be a more popular partner to other firms.

Alliances are increasingly popular among small firms. Alliances help deal with staffing problems—you can send out work and still manage the job, or you can seek work from larger firms.

Although it is not a good idea to establish a niche just because other firms are doing it, it is good to know what the currently popular niches are—business valuations, financial planning, not-for-profits, family businesses, and Sarbanes-Oxley work from larger firms. 

From Partner’s Report for CPA Firm Owners, May 2005. For the complete article,click here.
For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30^th Floor, New York, NY 10016-5902. One-year subscription $329. 212-244-0360, subserve@ioma.com.