When it comes to becoming a high-growth firm, give your firm a competitive edge. Learn about the big impact specialization can have on your accounting firm.
Hi, this is Lee Frederiksen. Today I want to talk about whether you should try to be a specialist or a generalist in your accounting firm. Which are you? Do you think of yourself as a generalist or specialist? Well, there is a little bit of a bias in our recent research to more people thinking themselves as specialists, a little bit over half. So which way do you think of yourself? Does it matter?
Well, if you want to grow it matters a lot. What we’ve learned is that firms who consider themselves specialists grow twice as fast as those that consider themselves generalists. So, makes a big difference, thirteen percent growth versus six and a half percent growth. That’s a big difference, and a big impact on your accounting firm.
But when you think about specializing, what are the different areas? Well, we’ve identified five areas where people tend to specialize: either solving a particular challenge, offering a niche service, helping in a particular role such as helping CFOs or helping operational people, specializing in a particular industry that you’re focusing on as your client base, or specializing in a geographic region. Which of those do you do? And which makes a difference? Well as it turns out that there’s a couple of them that tend to be associated with higher growth, with more likely to be a high-growth firm. And first of those is offering a niche service. So that’s one way and that gives you about a 25% increase in the likelihood that you’re going to be a high-growth firm. But there’s another one that does even more, and that’s specializing in a particular industry.
Now, why would specializing in an industry be so helpful? Well, the thing of it is, is that industries need change over time and if you specialize in a service or a particular role, you might miss one of those changes. So, when it comes to becoming a high-growth firm, specializing in an industry gives you the best chance. And specializing in a niche service is the second most likely to give you a high-growth path.