To Niche, or Not to Niche…..That is the question!

I write this blog on my return day trip to the permanently rainy Manchester from the not so rainy South, looking out the train window feeling happy and content with my business being. In fact, I’m sat here thinking ‘how did this happen?!’ as I often do following the sort of meetings I’ve had today. You see today’s was an ordinary, but equally extraordinary, meeting – ordinary because of where my ambition has taken me to, but extraordinary because 99.9% of accountants (or business managers as we are called in the music industry) will never find themselves in a room with a music producer who has just signed a 7-figure publishing deal with a US powerhouse. So how did I make the extraordinary ‘ordinary’ and what has it done for my business and personal well-being? Let’s start at the beginning. It was 2011 and my very good friend Andy Smith, introduced me to a well-known UK electronic music producer called Gareth Emery, who at the time was ranked in the top 10 DJ’s globally by the well-known industry magazine DJ Mag…..and so the media and entertainment niche was born. The term ‘niche’ gets banded about a lot nowadays, none more so than by accountants and other professional advisors or service companies, and if you are reading this article then you are either sat there smiling and nodding your head with satisfaction and recognition of your own successes after entering the world of niche services, or you are feeling sceptical or uncertain about where to start. I want to point out a clear distinction as well; when I say ‘niche’, I mean representation of a specific industry type, not tagging your business as a ‘web designer for start-ups’ or an ‘accountant for entrepreneurs’. Whilst these could be deemed to represent a niche in the strictest meaning of the word, entrepreneurs and start-ups will have the same challenges as any other business owner. I don’t think this is what is meant by specialising, nor do I believe it will elevate your business to greater success. To illustrate this differently let’s take the following two examples: - We are accountants for entrepreneurs - We are accountants for the music industry In the first example, could you say with confidence what specific industries the accountant represents? I’m betting that you can’t – what do entrepreneurs do anyway? With the second example, it’s obvious. If you are unable to specifically identify who you act for, then it’s unlikely you have a true niche. The interesting fact about the media and entertainment services that my business offers is that the word ‘niche’ was never mentioned on my business plan. I hadn’t even considered specialising, and to be honest I wouldn’t have known where to start. The essence of this blog is to help you determine whether or not you should be thinking about diversifying into niche services for the yet to be won clients seeking specialist advice, not to help you choose a niche. At the end of this article however, I will share my top tips to choosing a niche service to help you get started. The experiences my team and I have worked through gives me the chance to share with you the good, and, those things it would be good for you to consider more carefully. Firstly, let me share with you all the great things that we have experienced by specialising. 1. If you love your niche, then you will live every day fulfilling a purpose that in turn gives you the most incredible satisfaction. That’s not to say every day is easy (it’s not) but every task and challenge brings something new and exciting to be involved with. The most mundane of tasks are more satisfying than usual, simply because we love what we do and who we are representing. And guess what, they will love you for it too. 2. Our experience in the music industry is that clients with specific requirements do follow each other and are very happy to refer, especially when they know there is a good specialist out there. This is one of the reasons our business has grown quickly in a short space of time. The famous biblical line later used in the film Field of Dreams starring Kevin Costner is ‘Build it and they will come’. Well that’s exactly what happened to us. We decided to see how far we could take the niche service and created an entity, and through recommendation the clients started to follow each other; apparently the green room at venues is a hub for conversation about tax and other financial matters (really it is!). 3. The insight we provide to our clients seems to carry so much more value, probably because the music industry is very convoluted and has not kept up with digitalisation. All of our clients are extremely busy, they are in the studio making music, touring, fulfilling commercial obligations, worrying about royalties and generally being very creative and very focussed on their career. This is probably another reason why our services are valued so much. There is a lot to learn in any industry, none more so than music it would seem. I could no doubt write a 50 page blog on royalties but I will save that treat for another day. 4. We get to meet some really interesting and well-connected music industry people, who themselves meet really interesting and well-connected people. It’s like one big family and everyone is willing to share contacts, knowledge and insight. Similarly, we get to travel to some really great places that we otherwise wouldn’t get to visit. And of course, VIP treatment at clubs and festivals is a much welcome perk! 5. Unsurprisingly, there is less competition, which means when a potential new client finds his or her way to us, so long as we can demonstrate our understanding of their industry and we get on with each other, it’s highly likely we will convert them as a new client. 6. Part of our vision is to continually evolve, and we find that our continued learning and accumulated knowledge on a very specialist subject is very nourishing to the business and to us personally. 7. Our niche has allowed us to build good international relationships. In fact what I haven’t told you is that we have a joint venture with one of the most successful business management companies in the US – David Weise and Associates. That’s where the name comes from if you have managed to find our other website. The relationship we have with our US counterparts is great and their support and advice has been invaluable during these early stages. 8. Now I know we are not supposed to talk about sensitive information about fees and profits and other financial stuff, but I feel it’s important to share that we have been able to look at less than traditional pricing methods for our music clients, simply because of the additional value we add as business managers, as well as the fact that the whole industry works in a very different way to any others we have had the privilege to represent. I understand from talking to other specialist service providers that this is a common theme in other niche sectors. Another way of looking at it, is that there is less price sensitivity. 9. I touched on this earlier in this section, but our niche client numbers have grown fast which of course is because we are good at what we do. But it’s not just because of that. It’s because our target clients can immediately identify that we can be the answer to all of their business challenges. Compare this to the prospective client who is looking for an accountant and sees an abundance of firms who offer an overwhelming number of services, none of which specialise in their niche area. When you offer niche services, you have made the new client’s decision easy. Oh, and clients are more likely to stay, as finding another specialist as good as you is going to be tough. 10. Every day we delight in the fact that we are building a really great place for really great people to come and work, for now and for the years ahead. Who said accountancy was boring?! I wouldn’t be sharing this blog if I didn’t think a niche was a good idea for your business, but we should now look at the things that would be good for you to consider before you embark on putting your 5 year business plan together. Be sure to think about the following. 1. For us, new services meant new team members, and finding people with the requisite experience and skills for niche services can be difficult and you may find that it disrupts you existing salary structure. 2. How will you market your niche services? Will you simply add them as a new service line to your existing business, or should you set up a new entity? At Charlton Baker, we decided to set up a separate business, as we thought it would be easier to create a brand identity that wouldn’t be diluted by our existing trade (this was before we became David Weise and Associates UK). There is no right or wrong answer here, but for us, setting up a new entity was definitely the right thing to do. 3. Focusing on specialist advice will no doubt take up a lot more of your time, and of course initially you will be working hard to win new business. There is a risk that you will alienate existing or potential new clients, or even team members if your focus is elsewhere. We have always looked at our niche services as being an add on to what we do, even though it is operated through a separate entity, and all existing relationships with clients have been well maintained. But do think about whether or not your working style and pattern will allow you to do the same. 4. Is location important? The answer will no doubt depend on your niche, but to give an example, if you intend to specialise in agriculture then you will probably not want to be based in the city! Fortunately for us, the music industry is very well connected online, and therefore location isn’t important for us. That said, we often have to travel to various cities (and even countries) for some meetings. 5. You need to determine how your existing skills will translate to the new services you intend to start offering. ‘Accounts are accounts, and tax is tax’ I hear you say. You may well find that the niche area has a lot of nuances that you’ve never come across before, and even the best of tax manuals won’t give you the answer. It’s going to take time, and a lot of experience to build up the right knowledge. 6. Observe the local market. If there are other firms near to you offering niche services then the opportunity could be on your doorstep. Conversely, if there are no niche firms in your local area it could mean there is a great opportunity for you to be the first to market. 7. If you start providing services to an exciting niche area, you may find that it disrupts your team, in that everyone wants to be a part of it. Keeping everyone focused is going to be important. 8. As with the team, the new services may disrupt your existing systems and processes. A small point, but something that you will need to consider. 9. Be prepared to invest heavily up front. In the year when we were building our niche services, our travelling and subsistence cost were astronomical! Add to this a new website, training costs, new team members, additional subscriptions, stationery, bespoke software and so on, the family summer holiday to Spain may have to miss a year. 10. You’re most likely going to have to throw yourself out there. Be ready to stand up and be counted and prove you can do what you say you can do! Whatever you do, make sure you are prepared for your exciting new venture. So there you have it, ten good things about being a niche practice, and ten things every business owner ought to be thinking about before they power-up their service offering, all spoken from experience and results. If you haven’t been put off by the potential disruptions and hurdles, as promised, I would like to finish by sharing my top tips for identifying a niche for your business. Tip 1 Choose a niche area that you are passionate about, something that you love. The hours can be long and erratic, and the learning curve can be steep, so you need to love what you are doing. If you do, I can guarantee your clients will love you too. Tip 2 Speak to other firms that specialise and build good relationships with them. This could include legal firms, and other business advisors or service providers. Tip 3 Find out if your team are interested in the niche service you are proposing to develop within your business. If the team buy in, then it’s going to be far easier to make it successful. You never know, one of your team might already have contacts within a specific industry and it could be your starting point. Tip 4 Go international. If you can find a like-minded overseas business which is keen to develop its niche services in the UK, there may be an opportunity for you to work together and share clients, opportunities and resources. Tip 5 Stay up to date. Read. Listen. Be ready to take the next opportunity that is always going to be out there. Some great niche businesses I have come across recently include: - Web designers for event companies - Solicitors for ‘easy’ divorces - Engineers of bullet proof glass for the military or aristocracy - An IT company which only represents schools or academies If you are reading this wondering how we did it, which I often get asked, there is no single answer to help you over the start line and to make the extraordinary ordinary. The wonderful book, Leaders Eat Last by Simon Sinek, talks about some amazing success stories of some really great American businesses and I found it fascinating to read that sometimes you are presented with opportunities simply due to certain conditions, demands, necessities and advancements of your era and so on, and it really is down to perfect timing and grabbing an opportunity with both hands. I’m not sure why it fascinated me, as it’s exactly what I did. Maybe I am one of those entrepreneurs?! I have heard it said recently that all businesses are going to need a niche to survive. I disagree; your business needs a niche to thrive. <ins> </ins> <o:p> </o:p>