Are you afraid to niche down your accounting business because you fear that you might run out of clients?
In this week’s episode of The Abundant Accountant Podcast, Luke Gheen joins us to share the evolution of his business’ niche.
When he first started out, Luke’s primary goal was to bring in business and revenue to the firm, but he quickly learned that working with any ol’ client was not what he had in mind when he decided to become self-employed.
Luke contemplated a few different potential niches before naturally falling upon the one that he works with now (you’ll have to listen to hear what he chose!).
By choosing a specific niche, Luke has been able to create tailor-made services, and charge higher-end prices for them. Which means, Luke is able to work a little less clients, and make a little more money, leading to that Abundant Accountant life we all desire.
If you’re ready to start working with your dream clients in the niche of your choosing, then this episode of The Abundant Accountant Podcast is a MUST LISTEN!
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Special thanks go out to Luke Gheen for taking the time to chat with Michelle. Be sure to join us next week for our next new episode!
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Here are a few key secrets we talked about in this episode:
- Michelle introduces this week’s special guest, Luke Gheen, CPA.
- Luke introduces himself and shares a little bit about what he does and how he got started as an accountant.
- From the beginning Luke and his team were cognizant that they didn’t just want to bring in money from any client, but they were much more open to who they’d bring in than they are now.
- Luke opened an office in Denver and in Colorado Springs in order to generate the revenue he was looking to bring in.
- When Luke created his accounting firm he didn’t want to create something that was dependent on him personally. He wanted the niche he worked with to be able to work with anyone on his team, not just Luke.
- Luke believes that in order to pick the niche for you, you need to find the natural fit. You have to look for what feels good.
- Luke shares how he and his team stumbled into a specific industry for their niche.
- If you’re unsure why you chose to become self-employed, Luke encourages you to think back to when you first chose to become self-employed and then build your business around those reasons.
- Luke talks about how zeroing in on his niche helped him focus his marketing efforts.
- By narrowing their focus, Luke has been able to increase his company’s income because of offering more specialized services to his specific client base.
- Luke shares an interesting story of when he took on a client that he shouldn’t have because he wasn’t a good fit for the firm. Luke ended up firing the client.
- Over the years the firm Luke built has changed, but constantly analyzing whether people were his ideal client or not helped with his consistent lead generation and led to sinking a lot of money into marketing.
- Luke and his team are willing to work with individuals who are below their typical revenue requirements for an ideal client if there is potential for growth.
- Luke talks about a service he tried to provide that didn’t end up working out because the clients wouldn’t put in the necessary work.
- If you’re feeling frustrated with the work that you’re doing, Luke encourages you to re-evaluate.
- Michelle and Luke discuss starting before things are perfect, because nothing will ever be perfect.
- Luke shares what he’d tell his younger self.
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Should You Have A Niche As An Accountant? With Luke Gheen
Let’s welcome Luke Gheen to the show. Also, Luke is a longtime resident of Colorado. He’s got an undergraduate degree from the University of Colorado. He’s got his MBA. He started his firm in 2010 and wants to help business owners, specifically in three different niches that we’re going to talk about simplify their accounting and tax ecosystems. When Luke is not working, he enjoys rowing, reading and hanging out with his wife, three sons and daughter and also has a house up in upstate New York. Welcome to the show, Luke.
Thank you for having me, Michelle.
Thank you so much for joining us here. There are so many accounting professionals that probably want to know your whole story. I want to be able to be a part of it to help share what you’ve done because I’ve talked to a lot of accounting professionals and you’ve done such a great job honing in on your niche.
A lot of people say, “Should I have a niche as an accountant?” I said, “You should. Let me bring on one special guest for you to know it directly from the horse’s mouth.” If you want to share with everyone reading a little bit about yourself, I’ve already done an intro but it’s always best to hear it from you. Why did you get started in this? How do you get started? We’ll dive into how you created your niche as an accounting professional.
I’m happy to share my story. My background is in finance. I was in corporate finance and accounting for a long time. I worked for several large and small companies and enjoyed that but I started to get bored with that and wanted to do my thing. Ultimately, I ended up getting my CPA license and decided that I wanted to be self-employed. Most people who do that end up buying into a firm. I shopped around a little bit but I couldn’t find anybody to take an interest in me.
I was trying to figure out what to do and I found a marketing company called Build Your Firm that works only with CPAs. They do outsource marketing for CPAs and work with people all over the country. I flew to California, went to one of their conferences and met with them. To make a long story short, they took me on. I left a very good employment situation and started with no clients. At that point, I already had a house, kids and things like that, responsibility. It was important to me that I work. My first step was to outsource all my marketing. That’s all pre-niche.
That’s good because a lot of accounting professionals are similar to you. You’ve got this steady career job. You have your wife and four kids, that’s a lot of responsibility to start with no clients. That’s an inspiration to a lot of people that are probably reading this like, “If Luke can do it, I can do it.” You had to make it work and I commend you for doing that.
When you found the Build Your Firm, the people that you wanted to outsource all your marketing to, one of the reasons that you’ve been so successful is because of this niche. When you first started, did you even have a niche? Did you know whom you wanted to help? Can you share a little bit about when you first started?
When I started with them, they had somewhat of a plan in terms of where we were going to be located. I’m in Colorado Springs but to generate the level of revenue that we wanted to and grow at the speed we wanted to, we had to start being in two locations. I opened up an office in Denver, which is a much bigger city and then also an office in Colorado Springs where I lived. The first step is to have different locations so that you can be a bigger firm and appeal to a wider group.
Initially, the first year was all about bringing some clients in the door and getting started. From the very beginning, we were cognizant of the fact that we don’t want to take on any and every client because that leads you down a path that you don’t want to go down in most cases. It’s very difficult to focus and develop expertise when anybody who calls you is a client.
How did you learn that in the beginning? A lot of accountants take on anyone that calls. How were you able to distinguish that in those beginning years?
Some of it was good advice from Build Your Firm and some of it was what I thought about being a business owner. When I pictured the way I wanted the firm to be, it didn’t include a bunch of $200 or $300 tax returns. I never wanted to be the old cliche, the technician that becomes a business owner. I was much more interested in running the business. I love taxes and accounting. I love the work that we do, the planning aspect and the CFO stuff but I like running the business even more. I knew that that was where my deepest skillset was. I didn’t want to develop something where it would be super dependent on me or where they need to talk to Luke, not somebody in the firm.
I went into it with my antenna out for any clients that might look for somebody, where that was the case. In the accounting industry especially, there are a lot of clients who get attached to one CPA, you’re their person, know you, worked with you for several years and bounce stuff off you throughout the year. It’s hard to have boundaries. I didn’t want to be that person for those people.
I can only imagine what it’s like for you with the number of people that need your services. You didn’t want to be the technician. You wanted to build the firm and do higher-level work. I frequently get asked all the time, “How do you pick a niche?” Can you share a little bit about how you picked your niche? Also, share with everyone reading what are they. For you, you have a few.
To answer your first question in terms of how to pick a niche, you got to go about what’s a natural fit. That sounds maybe too simplistic. For example, one of the niches I could have done was government contracting but government contractors are subject to DCAA compliance. It turns into a bunch of stuff that I wasn’t interested in and didn’t know how to make money with. Other people have niches in real estate who only work with real estate developers but I’m not that interested in real estate. I want to do something I was interested in as well.To pick a niche, go with what is the natural fit. Click To Tweet
It has to be something that you can see yourself getting deeper into and enjoying the details of. Otherwise, it makes no sense. Look and see where you’re having success already. If you picked some clients, “Who are your favorite clients and why? What industries are they in? Is there any overlap? Can you create a niche out of that?”
In our case, one of the niches that we paid attention to and saw how it was going was the dental industry. Part of the reason we got more into it was that we like the people. We like dentists. A lot of them are only open four days a week. They’re nice people and have families. They’re interested in multiple things and do stuff on the weekends. They’re not all about work. They have a life and understand you have a life. They need accounting, tax and financial help. It was a natural fit. Those are some of the things we looked at.
That’s important what you’re interested in. You might as well work with people that you’re passionate about because if you were to have gone down the government contracting road, you wouldn’t probably be enjoying life every single day. With the type of work you do, it’s super detailed. Having an interest and enjoying the details but I like how you said like where you’ve had success already.
What are 1 or 2 things that you could share with someone maybe who doesn’t have any clients so they don’t know what’s working and don’t know what they’re interested in because they haven’t dug into a lot of the details? From your experience, because this came a little bit more naturally to you, what are 1 or 2 things or advice that you would do if you did not know what you were interested in and you had zero clients so you don’t even know what you’ve had success with yet? You just got your CPA license or maybe you’re starting your business. If you had to go back to 2010 when you started, what would you do if you were that person?
The first thing that I would do is think about why did I go to self-employment. What made me want to be self-employed? I’ve done a lecture on this at the dental school in Denver to help the dentist understand because it’s the same thing for them. The reason why you wanted to be self-employed to begin with and everybody has different reasons for that and that will drastically affect the type of practice they have.
Do you want to be the local community stalwart where everybody knows doctors so-and-so and you take care of these people? For some people, that’s what they want. Some people want to open multiple offices and they want to make money and sell it off. Other people have other reasons like they’re building something up for their kids to take over. It depends on why you wanted to be self-employed to begin with.
For a CPA, what type of practice did you want to open, to begin with? What sounds the best to you as you think about your week, your year and how it goes? For me, I wanted to be able to come and go as I pleased, in terms of location and work from anywhere I wanted to work from. I did not want people expecting me to be able to reach me anytime they felt like it, be on call or something. I didn’t get in to be self-employed so people could tell me what to do.
I had to pick some people or an industry that could fit and would work with that. If you work with other kinds of doctors, they don’t work well with that at all. If you work with government contracting, it doesn’t fit. Dental fit for me. Some others fit too but you got to think about why you started the business, where you’re going to take it and then what type of client can get you there.
That’s valuable. I didn’t even think about it. The dental business is similar to how you wanted to operate your firm. The way that some dentists operate their dental practices is very similar. That’s awesome. Thank you for sharing.
A lot of them haven’t thought about it either but it drastically affects the practice they have. Some people don’t want to grow a big business and that’s okay. I only want to grow to a certain point too. There’s a point at which it doesn’t make sense and the amount of effort is not worth the extra money. We all have to have our limits and know what we’re trying to get to.
I’ve talked to other accountants, they became accountants because their father, grandfather or mother did it. They’re continuing a tradition. Their father, mother or whoever put in their dues and they’re going to put in their dues. They don’t mind working those 80 to 90 hours a week. That’s fine. I don’t want to do that. I have four little kids that I want to go home to. You have to think about what you want and how are you going to get there.
For you, how has having this niche helped your business go from where you started, if you could share a little bit about that?
It helped us focus our marketing efforts so that we weren’t scatter-gun marketing whoever calls us that may be our good candidate. If a dentist calls you, are you more interested than if a self-employed truck driver, nurse practitioner or real estate developer calls you? What do you want to tell them? If you’re going off the cuff and trying to come up with what you’re going to say to them because you don’t know if you want them as a client to begin with, it’s going to be an awkward conversation for everybody. Probably, you’ll take on a lot of clients that you wish you hadn’t.
For me, it helped us focus our marketing. When we focused on our marketing and knew whom we were going after helped us develop internal systems that we could use to process the work. It’s very hard to develop an efficient internal system to process work if you don’t know what type of work’s going to come in. I can’t overemphasize that enough. It can’t be a unique engagement for every client. They have to fit into a specific mold. If they don’t, you have to let them go because otherwise they don’t fit your system but you have to have a system. You can’t create a system if you don’t know what work’s going to come in.
You do have to let them go if they don’t fit your system. Numbers-wise, how has it helped your business revenue or get to the financial goals that you were looking to achieve by having a niche and having a process where the clients did have to fit into some mold otherwise you did let people go? We can have a whole other discussion about letting clients go that isn’t the best fit for you.
We’ve done that too. Our revenue per client has gone up because we’re able to offer more services to the clients. We’re able to understand what they need and then develop programs that sound good to them because we understand what they need. In the past, even when we had a niche, we were taking much lower revenue dollar per year clients. We’ve been able to increase that 2 or 3x versus where we started, in some cases more than that. As our system gets better, the product that we’re giving them gets better and better.
By doing that, it probably seems more seamless to the client experience too.
The clients get better service, which is the only reason that they would see the value to pay the higher fee.
Can you share a story with us about when you took on a client that you wished you hadn’t? Maybe there was this time you bent out of your niche and rules of taking on a client and you’re like, “I wish I hadn’t.” Share what are some of the lessons learned and a little bit about that.
There are so many.
Pick the best one that we can all learn from.
A client that I fired which I haven’t had to do too much. It’s not like a big a-ha story. We took on this guy who ran a medical equipment business. He’s in town and his wife ran another business out of the same building in the same industry but different businesses. That was a little odd, to begin with. They wanted to meet with us face-to-face, which is something we don’t normally do. We want to do video calls or phone calls. From the very beginning, we’re getting out of our standard communication cycle. They came to our office and we went to their office, the stuff that we don’t even do now.
There seemed to be tension between them and I was spending all kinds of time that I wasn’t getting paid for. At the same time, they were a potential financial planning client. We were trying to create another niche that wasn’t a good fit for us and see if they’d be a good financial planning client. We made a bunch of exceptions for this client. This was a client who very much wanted a person in town whom they could call about anything anytime. You’re their guy and they call you. It’s your fault if it doesn’t work. It came to be that this person who very unresponsive with email. They’re the, “I didn’t get that email,” type of guy. Legitimately say, “I didn’t get that email.”
On April 15th, the individual tax filing deadline and he chewed out one of my CPAs on the phone for the fact that we had to wait until April 15th to file his tax return even though it was 100% his fault and 0% our fault that it took that long. We’ve been hitting him up for months trying to get his stuff. He gave them this finger-wagging, “Don’t you ever do this to me again. Do you understand me,” conversation. I’m not going to put up with that. I can’t have my staff coming to work stressed out and chewed out, especially when it’s not their fault.
I don’t think people have the right to talk to other people that way. I fired him. His fees were low and he was always complaining. He would give me the line, “How much am I paying you,” as he forgot. It was not a high fee. I broke a bunch of rules that I should have not broken and ignored. I FedExed him a letter so that he couldn’t say that he didn’t get the email and I called him.
Well done on that. I understand when it comes to breaking a lot of the rules, this is the consequences that we have to pay. By having your niche, be it an industry, revenue of a business you want to work with, a certain type of client or for you, one of your other rules was you only meet with people on video or via phone. You wasted all this time that you didn’t even get paid for. It’s important for others reading to learn from this and also how can you be the best service to your clients if we start bending our rules.
I don’t know if you can share a story maybe from the beginning when you started your firm like you needed revenue because you quit this job and going all in on your business like, “How am I going to pay my team and everything and still have funds for the family?” You have that mindset too going on. How did you deal with that in those beginning years?
I had a more open mind then because, at some point, you have to have some cash. The thing is when you have a solid marketing engine going, you don’t have to worry about where your next client is coming from. The lead gen is happening. Your main concern is what do I do with the lead once I get it? How do I process the work efficiently? How do I make the most out of client engagement? Instead of getting to this mindset of, “I have no idea if I’ll ever get another client,” if you have a good marketing system, you can be confident you will get another client. You can figure out what to do once you get that phone call or get the email. That was a lesson to learn.When you have a solid marketing engine going, you don't really have to worry about where your next client is coming from. Click To Tweet
I sunk up a lot of money into marketing and struggled with that at first, especially because we didn’t have a lot coming in but I remember they told me at one point, “You have to stop worrying about that,” because I asked questions like, “Do we need to do this or that?” I took their advice and said, “I’m not going to worry about it.” If they tell me to spend money on something, I’ll do it. If they tell me to do something, I’ll do it. You got to be ready to take advice. There are certainly clients I took on that I fit in to get things going. That happens. It’s not the end of the world. One of those clients turned out to be a good client. Others, we divested ourselves up later and that’s okay. I moved them to another firm where they get a better fit. Things are going to change.
How have you honed in on your niche over the years? You’ve had your business for several years. Can you tell us and share with us may be the evolution of what it was before and where it is now or if it’s the same?
At first, it was like, “I’ll work with any service-based business.” It then became, “I want to work with service-based businesses who are using QuickBooks.” It then became, “I want you to be in QuickBooks online or let us move you to QuickBooks online.” I didn’t start working virtually because I didn’t know to do that. That’s something that developed over time. It became dentists and medical professionals, which are not exclusively whom we take on or people who fit our communication system, who will work with us electronically and do things that we tell them to do.
We have a huge niche in the dental industry. We go to trade shows and do all kinds of stuff but focus on high-end tax planning clients. Who’s a good fit for that? If we can work with them from a tax planning standpoint and they can fit into our communication system, they’re more valuable than the monthly clients that we were getting before. It has changed. We’ll even take on maybe sometimes clients who are below our normal revenue amount if we see long-term potential and if they’re people we want to work with. We can be a little flexible and say, “I have a good feeling about this client.” You get used to that.
One thing we won’t make an exception on is whether or not they will use our electronic communication system. If they’re going to fight that, complain about fees, not ever check their email, not watch any videos that we send them, not schedule calls with us and then blame us for not talking, we won’t put up with that at all. It puts us in a bad situation. We’ve gotten better about knowing what we can be flexible on and can’t be flexible on.
That’s important. It’s interesting to share that you had an evolution of your niche. For each person reading this, you’re going to have an evolution over time and you kept adding on a layer once you probably saw, “This is working well. I like this. I enjoy my work. I’m not stressed out all the time.”
There are some things that we thought would work that didn’t.
What’s one thing that you tried that didn’t work?
One thing that I thought would be a big deal that and ended didn’t end up being a big deal was CFO-type services where we go over a financial dashboard, help clients understand their numbers and do a forecast with them. We have an analyst on board to do all this stuff. We could not get traction on that. The tool we were using and the service were great but the reality is clients weren’t interested enough to spend the amount of time that it took to do a good job to get them a good product.
We’d be developing a forecast with virtually no input. That’s useless. They didn’t want to log into the tool and check it. We spent years pushing this. It would excite clients because they liked the idea of it like, “I got this dashboard and all these numbers going.” In truth, when the rubber meets the road, they didn’t have time to look at it, didn’t want to look at it and didn’t want to schedule a time to look at it. They would sign up and start paying a higher fee for it but then they wouldn’t use the service and then would get frustrated and let us go. In terms of honing down your niche, my advice is you got to go with what works and eventually if something’s not working, stop doing it. We had to decide, “This is not working and we’ve been pushing it for way too long. We’re not going to do it anymore.”
If you look at that mistake for example, did you ever quantify how much time, effort and resources maybe you spent on that mistake so others reading can learn from it or maybe 1 or 2 red flags other than what you shared? If you’re trying something for a long time in your firm and offering another service and it’s not working, when do you stop?
People are going to have to use their professional judgment on when they push through versus when they stop. At one point, have many dozen clients with this tool and we’re trying to work with them. We could point to five who are talking to us and using it. We’re paying all these software fees and it’s like, “What’s the point?” You have to decide when enough is enough and what you’re going to replace it with. I use my internal level of frustration. I didn’t become self-employed to be frustrated and push a service that nobody wants. Eventually, it wasn’t worth it to me to keep pushing it. I thought I’m going to find something else that they do wantYou have to decide when enough is enough and what you're going to replace it with. Click To Tweet
You’re going to gauge it by your internal level frustration meter. Take Luke’s advice.
That’s one meter but if you’re frustrated with something, reevaluate. If it’s not working, then is it you, the system or the client? You can only spend so much time in a day measuring and navel-gazing and creating dashboards. You have to make a decision. Here’s another cliché. “Perfect is the enemy of good.” I’ve seen a lot of people try to make everything perfect and not sign up any clients until things are exactly dialed in and they’re always in the prep mode but not quite rolling stuff out. Eventually, you have to roll something out, adjust it as it needs to be adjusted and make it work because it’s never going to be perfect so that’s one thing we learned too.
There are a lot of people, especially solopreneurs, entrepreneurs, accounting entrepreneurs or whatever you want to call it all deal with this thing of perfection. “I can’t do this until I have this in place.” I’m like you. Perfect is always going to be the enemy of good. Start or try something and see because you never know what’s going to happen.
Thanks for sharing, Luke. I have one thing that I like to close out every single show with. You’re going to have to dig deep for this one. What advice would you tell your younger self from a business point of view? Given all of the lessons that you’ve learned, the money you’ve wasted and where you’ve gotten your business and practice, what’s the one thing you would tell younger Luke that was in his job before that you’d tell him?
Right when I started the business or my younger self altogether?
We’ll do both.
The main advice I would give myself is to enjoy the process a little bit more and not get so stressed out about the things that aren’t working and the clients that left that you didn’t expect to leave. Have confidence that the process is working and enjoy it. Always question whether or not you’re doing the right thing and whether it’s working. Look at the macro level and say, “Overall, from year to year, I see things growing, we’re changing. It won’t be the same as last few years because we’re doing things differently than last few years.”
Have confidence in the process and be a lot less stressed out about it. It’s pretty easy for me to dive into the stress and even though I wasn’t working for eight hours because I wasn’t willing to like some people but to be stressed out and thinking about it and wondering, “It’s tough on your health and not good for you.” I would have more confidence in what I was doing, go with it and not worry about any given month how it’s going.
Thank you so much for sharing and for being here with us on the show. Thank you for sharing your wisdom with other professionals. It was amazing to have you.
Thank you so much, Michelle, I appreciate it.
What a great episode with Luke on Should You Have a Niche as an Accountant. I frequently hear this question a lot. It’s a major concern for a lot of people and I can understand why but hopefully, this episode helped you understand how you can have an evolution in your niche and how can help not only increase the revenue but increase the happiness and abundance in your life. We all want to maybe work a little bit less, maybe make a little bit more money and help and serve our clients. What we’ve found is that by working with a lot of accounting professionals, if you want to have that happiness inside yourself and have the happiness with the clients that you’re able to help and serve every day is a gift not only for you but for your clients.
Here at The Pitch Queen, I enjoy working with accounting professionals. When I picked my niche, it fell into my lap, to be honest, but I do have a finance background and love numbers and talking to people. For me, working with a lot of people similar to you in the accounting world has been great. I love knowledgeable people. I love people with degrees and designations. I love intelligence. Picking that niche not only does help me enjoy every single day what I do but it also keeps it interesting and fun. Ultimately, it helps me create abundance in my life too. Thank you all so much for reading. If this is something you would want to explore a little bit more, I have more to share on that.
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