Industry niches in accounting: 5 Questions to consider
By Lauren Prosser, Director of ProfitCents Consulting Services, Sageworks
In a previous post, we began to explore the three critical questions any firm must answer when crafting an industry niche-driven growth strategy. We first looked at a 7-step approach for identifying key industry trends and changes defining the industry environment to answer the first question, what is going on in the industry?
Building off of the insights your firm gained from identifying what is going on in the industry, we continue this discussion with an examination of the second question:
• How do these conditions create opportunities and/or obstacles for a business operating in the industry? -Beyond opportunities and obstacles, how do these conditions pose questions a business owner or manager must answer? How do these conditions dictate the timeline within which these questions must be answered?
Addressing these questions as part of your effort to craft an industry niche-driven growth strategy will help you move from analysis to application. It will help you identify the specific ways you might be able to help companies in this industry.
When evaluating how industry conditions create opportunities and/or obstacles for a business, here are several related questions to consider:
1. What barriers to entrance (or lack thereof) would the current industry environment create?
2. What related industries would be impacted and how? (Think about the types of businesses that someone in the industry would have relationships with, network with, etc.)
3. What would a successful business operating within the industry look like? How has this definition of success changed over the last 1, 3 and 5 years?
4. What would a business in a vulnerable position in the industry look like? How has this changed over the past 1, 3 and 5 years?
5. If you were leading an internal planning meeting or strategy session for a business in the industry, who from the business would you involve? What would you focus on? (Hint: Start with the fundamentals – driving revenues, profitability / cost control considerations, operating cycle management and resource allocation).
6. From both an accountability standpoint and a planning standpoint, what should individuals in specific management roles within a business be focused on with regard to current industry conditions and trends?
The ultimate objective in answering the second question, “How do these conditions create opportunities and/or obstacles for a business operating in the industry?” is to yield a clear understanding of the areas of greatest importance and urgency for businesses in a particular industry.
Our next post will tie in the third and final question that must be answered when crafting an industry niche-driven strategy: Why is your firm uniquely positioned to serve the needs of businesses in this industry?