Three Case Studies in Niche Development

Source: Practical Accountant

Brown Smith Wallace, St. Louis

This  firm has developed a niche in risk services. It includes “enterprise risk and internal audit, S-O assistance, and SAS 70/Third Party assistance.” It also performs “vulnerability assessments and technology penetration studies.”

The firm now has the equivalent of 12 full-time staff in this niche, up from three. What triggered their entry into this niche was the addition of two staff people who happened to have the skills to do the work. An in-house security lab to do the tech work helped land engagements because other firms would have had to outsource the tech work.

The firm says that five years ago it couldn’t recruit senior staff from the Big Four, but today, because partner opportunities are rare, they are eager to make the change.

SS&G Financial Services, Cleveland

The firm focuses on niches in which they have a competitive advantage (or little competition) including restaurants, valuation and litigation support, health care, and payroll. It merged last year with a firm that had two niches of interest: business valuation and litigation support, and real estate. It calls its restaurant division SS&G Restaurant Services, advertises in national industry publications, and conducts restaurant “boot camp” seminars.

Even though there is not much growth in Ohio, the firm is hoping for 10% growth this year. Staff who recruit new staff are the firm’s best source of new people, so incentives have been appropriately increased.

Weiser, New York

The firm’s growth by 25 percent, to $69 million in 2004, is attributable to its focus on niches starting in the 1920s with the laundry and textile business. It now has 17 industry niches.

The firm’s philosophy is to recognize that all companies progress through certain life-cycles and to help its clients meet the challenges of each cycle.

The firm never jeopardizes the quality of its service by taking on more than it can handle. It believes quality is the greatest challenge to the accounting profession, and the weakness of the competition is its greatest opportunity.

It sees great opportunity not only in the Sarbanes-Oxley/governance area, but also in COSO ERM risk management. (See http://www.coso.org/publications.htm)

From Practical Accountant, April 2005. These case studies can also be found by clicking on these links:

http://www.webcpa.com/article.cfm?articleid=12051&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12055&;pg=pracacc

http://www.webcpa.com/article.cfm?articleid=12053&;pg=pracacc