If you want to build a successful Client Advisory Services practice, trying to serve every kind of business may not be the best strategy.
The numbers provide a compelling reason to specialize.
According to the 2024 CPA.com and AICPA PCPS Client Advisory Services Benchmark Survey, CAS practices that generated more than half of their revenue from defined industry niches reported 38% higher median CAS revenue and 51% higher net revenue per client than respondents overall.
Why can specialization make such a significant difference?
Because good advisory isn’t just about understanding accounting.
It’s about understanding the business behind the numbers.
Accounting Principles May Be Universal. Business Problems Aren’t.
A dollar of revenue is a dollar of revenue regardless of the company producing it.
But the way that revenue is generated can be completely different from one industry to another.
Consider a restaurant and a construction company.
A restaurant owner may be particularly concerned with food costs, labor percentages, average check size, table turnover, and profitability across different menu items.
A contractor might be more concerned with job costing, project margins, labor utilization, change orders, work in progress, and the cash flow implications of long project cycles.
The financial statements may look similar.
The conversations you need to have with those owners won’t.
That’s one reason industry expertise becomes so important in Client Advisory Services.
Specialization Helps You Understand the Right KPIs
One of an advisor’s most important responsibilities is helping a business owner identify which numbers actually matter.
Every business can monitor revenue and profit.
But specialized advisors can go deeper.
If you primarily work with SaaS companies, you might become familiar with metrics such as customer acquisition cost, churn, recurring revenue, and customer lifetime value.
If you work with professional service firms, you may pay closer attention to utilization, billable rates, client acquisition, labor costs, and revenue per employee.
The more businesses you advise within an industry, the more patterns you begin to recognize.
You can start asking better questions because you’ve seen similar problems before.
Instead of saying:
“Your expenses increased this quarter. Why?”
You may be able to ask:
“Your labor cost as a percentage of revenue has increased for three consecutive months. What’s changed operationally?”
That’s a very different conversation.
It’s also much closer to the role of a trusted business advisor.
Industry Knowledge Gives the Numbers Context
Numbers become significantly more useful when you have something meaningful to compare them against.
Imagine telling a client:
“Your gross margin is 32%.”
The owner’s next question should be:
“Is that good?”
A generalist may be able to explain how the margin has changed over time.
A specialist may be better positioned to discuss how that result relates to the economics and common challenges of the client’s industry.
That context can make advisory significantly more valuable.
Instead of simply reporting results, you can help clients understand what those results mean.
The CPA.com CAS research reflects this movement toward specialization. The 2024 benchmark found construction, professional services, nonprofit organizations, and retail among the prominent niches served by participating CAS practices.
You don’t necessarily need to serve every industry.
You need to become exceptionally useful to the clients you choose to serve.
Specialization Can Make Your Firm More Efficient
There is another side to specialization that clients may never see.
Your firm can become easier to operate.
Imagine serving 30 advisory clients across 30 completely different industries.
Each engagement may require different software, different KPIs, different reports, different processes, and different research.
Now imagine serving 30 clients concentrated in two or three industries.
You may be able to standardize much more of the work.
You can develop industry-specific meeting agendas.
You can create repeatable KPI dashboards.
You can build standardized onboarding processes.
You can become familiar with the software commonly used in that industry.
You can develop advisory packages around problems you’ve already learned how to solve.
Instead of reinventing your advisory process with every client, you create a system.
That repeatability is one of the reasons CPA.com has emphasized industry verticalization as a way for CAS practices to improve standardization and efficiency.
Specialization Makes Marketing Easier
Consider these two marketing messages:
“We provide advisory services for small businesses.”
Or:
“We help construction companies understand job profitability, improve cash flow, and build more profitable businesses.”
Which one immediately tells a contractor that you understand their problems?
Specialization makes it easier for prospective clients to recognize themselves in your marketing.
Your website can discuss their challenges.
Your articles can address questions specific to their businesses.
Your sales conversations can focus on problems you’ve solved before.
Your client testimonials can come from businesses that look like theirs.
Over time, your firm can develop a reputation within that market.
Instead of competing to be one of thousands of accountants offering advisory services, you can work toward becoming the advisor people within a particular industry recommend to one another.
Specialization Can Improve the Advisory Sales Conversation
Industry expertise also changes the way you sell.
You don’t have to begin every discovery meeting from zero.
If you’ve advised similar businesses, you already know many of the questions worth asking.
For example:
“How are you currently measuring profitability by project?”
“What percentage of your revenue comes from your three largest clients?”
“How quickly are customers paying you?”
“Which service line generates your strongest margins?”
The exact questions depend on the niche.
That’s the point.
The prospect begins to realize that you don’t just understand accounting.
You understand businesses like theirs.
That can accelerate the transition from accountant to trusted advisor.
Use PGE Training to Build a Specialized Advisory Offering
Choosing an industry is only the beginning.
You also need a repeatable process for helping businesses within that industry.
That’s where Universal Accounting Center’s Profit & Growth Expert (PGE) training can provide a foundation.
PGE is designed to help accounting professionals move beyond traditional accounting work and provide consultative services to business owners.
Several elements of the training can become particularly useful when developing an industry specialization.
Cash Flow Management
Cash flow is a challenge across industries, but the causes can be very different.
A seasonal business may experience predictable swings throughout the year.
A contractor may have cash tied up while waiting for project payments.
A rapidly growing service company may struggle because payroll expands before receivables arrive.
PGE training emphasizes cash flow management and gives professionals a framework they can adapt to the specific cash-flow patterns of their chosen niche.
Profit First
PGE also includes instruction around applying Profit First principles with business owners.
Again, specialization can add context.
Once you understand the typical revenue cycles, expenses, margins, and cash needs within an industry, you can have much more relevant conversations about profitability and cash allocation.
You’re applying a financial framework to a business model you understand.
Value Builder
PGE training also introduces the Value Builder framework and its eight drivers of business value.
That can broaden the advisory conversation beyond this month’s financial statements.
A specialized advisor can examine how those drivers apply within a particular industry and help owners think about building a stronger, more valuable company over time.
Level 5 Advisory
UAC’s advisory training also incorporates the Level 5 Service Framework, which is designed to move accounting professionals from traditional hindsight-focused services toward ongoing, forward-looking advisory.
The framework provides tools that can be applied across businesses while still allowing an advisor to customize the conversation for a particular niche.
That combination is important.
Your advisory process can be standardized, while your expertise becomes increasingly specialized.
Marketing and Sales Training
Finally, PGE doesn’t focus solely on delivering advisory.
UAC also incorporates training around marketing and selling professional services.
Once you’ve identified a niche, those skills can help you define your ideal client, communicate the problems you solve, generate leads, and move prospects through a sales process.
Instead of marketing yourself as an accountant who can work with anybody, you can develop a much clearer proposition:
“This is who I help. These are the problems I understand. This is how I help solve them.”
How Do You Choose an Advisory Niche?
You don’t necessarily need to pick an unfamiliar industry simply because you believe it could be profitable.
Start with what you already know.
Look at your existing clients.
Do several operate within the same industry?
Which clients do you enjoy working with?
Where have you already developed expertise?
Which businesses have problems that fit naturally with the advisory services you want to provide?
You can also consider your professional background, personal interests, local market, existing network, and industries where you already understand the terminology and economics.
Then go deeper.
Learn the industry’s KPIs. Study its business models. Understand its technology. Follow its trade publications. Talk with owners. Learn where companies commonly lose money and where successful companies tend to excel.
That’s how a niche gradually becomes expertise.
Don’t Just Become an Advisor. Become Their Advisor.
Client Advisory Services are built around understanding a business well enough to help its owner make better decisions.
Industry specialization can take that understanding considerably further.
You aren’t simply looking at financial statements.
You understand why certain numbers matter.
You recognize common problems.
You know which questions to ask.
And you can build repeatable systems around helping similar businesses improve.
The CAS benchmark data suggests firms are already seeing the economic benefits of doing exactly that.
For accounting professionals interested in making the transition, Universal Accounting Center’s Profit & Growth Expert training can provide the advisory frameworks, cash-flow and profitability tools, marketing strategies, and sales processes needed to begin developing those services.
Then you can add something that can’t simply be taught in a generic accounting textbook:
Deep expertise in the businesses you choose to serve.
