In today’s world, the global market has become so competitive for every industry that it has pushed people into taking on more specialized jobs. In order to survive in the current market, you must have professionals who are skilled and well-trained in their work.
This competition extends to the accounting industry as well. Accountants have multiple tasks in hand, and they deal with clients from almost all the sectors. Every client belongs to a particular industry and has a different set of requirements pertaining to their business.
As a result, they expect their accountants to act as financial and business specialists in their business vertical. This is why it has become famous for the accounting business to go vertical.
So what exactly does going vertical mean?
Going vertical essentially means businesses specializing in a niche by offering services and products that cater to and fulfill the requirements of that particular industry.
The vertical model allows accountants to target specific industries, attract new and potential customers, and increase their sales and revenue generation in that particular industry.
Going vertical sends out the following signals to your potential clients –
1. You understand their industry, its working, and requirements.
2. Your product or service fulfills their specific needs.
This not only attracts relevant clients but also helps CPAs and accountants deliver high business-value accounting services by focusing on different industry verticals.
Doug Sleeter, the founder and former CEO of the Sleeter Group, in an interview with ACE spoke about why it has become important for accounting businesses go vertical these days.
He suggested, “Every business owner wants you, as their accountant, to be an expert in their business type. So, you are not only an expert in accounting and tax but an expert in their business vertical as well, as it relates to accounting and tax – so I say go vertical”.
He goes on to add, “So, choose 2-3 verticals, learn them in-depth, and then market yourself to those verticals in your marketing materials. That’s a critical thing. Don’t try to do everything to everyone”.
Thus we see how businesses nowadays expect their accountants to be insightful of their specific field and have good knowledge about their policies, operational methods, complications, and other such intricate details. Apart from business requirements, every industry has different technological requirements in terms of the tools and software they should use. For accountants to go vertical, they must have extensive knowledge of technical aspects.
For example, a real estate client would expect their accountants to come with ideas to reduce their risk. This is only possible when accountants are well versed with their business and its working.
Similarly, a client from the nonprofit industry would expect their accountants to come up with strategies to raise funds and allocate them wisely in order to maximize their returns. Here again, accountants would require to have good knowledge about the working of social workers and nonprofit organizations.
Thus, we see how accounting businesses must help their clients gain profits by offering them insightful advice based on industry knowledge and data to reduce their expenses, streamline their work process, and strengthen their financial holdings. They are also required to carry out basic tasks such as payroll management, filing tax returns, and much more to help their clients.
So, now the question is, how should an accounting business go about practicing a vertical business model?
Good research is where to begin. Here are a few factors that an accounting business must consider before choosing to go vertical –
1. What is your current business practice?
2. How do you currently deal with different industries, and how is its feedback?
3. Determine which industry/sector you should target based on previous years’ data?
4. How visible are your services in that industry?
5. What is the size of the industry and its growth?
6. How does your product/service fit in to cater to their requirements?
7. How prepared are your other teams, such as sales and marketing, to go vertical?
8. Do you have partners in that particular industry?
Going vertical can be a huge and vital step for accounting businesses as it can frame or break their work. However, you need to start small and do proper research before going completely vertical. Most importantly, it is to identify and target industries that bring more balance and revenue to your business.
Targeting specific business verticals and potential customers is the biggest opportunity to expand your business and generate more revenue. Moreover, accounting firms with financial expertise in particular industries are preferred these days to those who do general business.
By picking an industry vertical for your accounting business, you become an expert in the entire sector. However, only through comprehensive research, you can expect to gain this level of expertise.
Start small, target big, and go vertical!
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