Lawyers do it; general medical practitioners do it, accountants do it. And most bookkeepers do it too. They mostly are generalists. After all, an accountant does accounting and a bookkeeper does bookkeeping, right? You wind yourself up each day and off you go. Here’s a key fact to consider seriously if you want to grow your income: when business owners look for accounting and bookkeeping services, the top two qualifiers are experience and expertise in the customer’s industry.
Stand in the prospective customer’s shoes for a moment and consider her choice when faced with choosing a ‘generalist’ bookkeeper who offers general bookkeeping services and a bookkeeper who has a profile revealing a specialisation in that industry. Which professional do you think she would choose? And would you imagine $5 or $10 an hour premium for specialised services would deter the customer?
Stand in the customers shoes
Customers will be drawn to professionals who understand their needs. You can’t be an expert across the board but you can be a specialist in a specific vertical. ‘Finding your niche’ is somewhat of a cliché but there compelling reasons why specialising should be considered:
• There is a perception if not a reality that specialists are experts
• Customers expect to pay higher fees to a specialist
• Being a generalist can be inefficient when you’re unfamiliar with the industry
• Generalists will have a mix of low to high quality clients; a specialist tends to have a higher proportion of high-quality clients
Building your fee rate
As a specialist you immediately differentiate yourself apart from the competition. Simply put; there are very few specialists in a niche field and your skillset is valued by prospects in that niche. You’re onboarding time is short and trust is built quicker when the customer feels you understand her unique needs. A rapidly changing ecosystem makes it inefficient to be a generalist
Bookkeeping is detailed work with a lot of moving parts and there are multiple challenges facing bookkeepers: offshoring and a readily advancing ecosystem of cloud-based accounting software solutions with hundreds of add-ons and options. Being a generalist is therefore becoming increasingly difficult when you need to spend hours researching how to handle an unfamiliar situation.
For sure there is merit in lots of variety and learning, but it also involves a lot of unbillable time that, at best, is very inefficient. The specialist, on the other hand, gets better and better at their work having the relative luxury of being in narrow vertical or niche and hence, able to make manifold productivity gains that the generalist simply has not the opportunity to realise.
Choosing your customers
Whereas the number one challenge that independent bookkeepers (and accountants) usually struggle with is getting clients, the specialist will often be in position to be more selective. The generalist will generally have a smorgasbord of clients, some small, some big, some good, some bad. The specialist will have higher hourly rates, be more productive and able to positon themselves as an advisory professional thus generating an even higher fee rate.
The specialist will readily be able to identify prospective customers and therefore will have the ability to do regular and effective marketing. It’s really tough to get the word out about your services when you’re not quite sure who your potential customers are exactly.
Consider for example that you are a specialist in restaurants and have a good knowledge of Point of Sale systems and experience in integrating the systems to Xero or to QuickBooks Online. You’ve got your finger on the pulse of the latest advances in POS and able to demonstrate this to each customer. Now that’s worth money to the customer!
So, how do you go about choosing a specialty? Look across the spectrum of your experiences, your skills and contacts and look too at strong growth verticals and niches. Hint: think medical; think trades, building & construction.