How the Vertical Focused CPA Model Can Work for You
Vertical vs Horizontal Markets
A vertical market is one where all customers are positioned in one specific industry, regardless of their niche within the space. For instance, millions of people use online search engines every day. Noodle.com is a search engine that focuses specifically on providing search results focusing on education. Whether you’re looking for a particular academic course, a specific university, or information ranging from kindergarten to college, Noodle covers the education sector from top to bottom.
A horizontal market is one where your customers of differing demographics, interests, and backgrounds use your product to do the same thing, regardless of the field they are in. Take Google.com, the most used search engine in the world. Google provides any user with comprehensive search results on their search queries. Trying to find recipes, an auto shop, or hire a lawyer? Google does it all.
What model do you operate under?
Depending on the industry you operate within and your niche, your market model might look different than your competition. Some Accountants and CPAs run a “take all comers” type of operation – doing the books for anyone with a pulse and pocket-book. The horizontal market is a fine model for most firms. After all, every business needs to balance their books and needs them done by a professional that can save them money.
Some professionals in the Accounting and Finance industry have been able to transcend the horizontal market model, and have found a way of becoming niched and vertical focused in their firm’s
growth. A fine example of a CPA that operates a vertical focused firm is Geni Whitehouse, co-founder of Solve Services – a digital accounting firm servicing vineyards and wineries in Napa Valley, CA. Rather than chasing revenue growth in multiple different industries, Geni marketed to and pursued entities affiliated with the wine industry.
So how can you become more vertical focused?
Analyze your Revenue Streams
How diversified are your businesses’ income revenue streams? When’s the last time you completed an internal audit of your accounts, their industries, and the ROI for each one? You might find that you have a number of accounts that are turning a profit, but just barely.
You might find that in a particular industry, clients have little room for growth or are seldom open to service upsells. On the flip side you might also discover a niche area for exponential growth that’s been overlooked.
If anything, analyzing your revenue streams on a regular basis will help you make smarter decisions when it comes to where and with whom you do business.
Vertical Focused: Not for all, but maybe for you.
A vertical focused business model isn’t for everyone. In fact, it’s not the norm for most CPAs and accountants. However, those that recognize the value they can bring to a niche corner of the market can often develop a more streamlined operation that naturally encourages growth.
As the business owner becomes more comfortable in their niche and tailors their services to attract particular clients, they can begin to see the advantage a vertical focused model can have over other growth strategies.
Learn how the vertical focused model works for Geni Whitehouse. Sign up for the FREE webinar as she reveals how to build a dream firm in the Cloud.