Creating a niche providing comprehensive accounting services to self-employed, high income (SEHI) professionals is not a new idea. What is new is the size and scope of the opportunity to do so for your firm. With the growth of the economy driven by the self-employment market in many areas, there are more and more opportunities to serve professional services providers who can afford and want to pay for your firm’s expertise in accounting, tax, bookkeeping, spend management and payroll services.
The sweet spot in the SEHI professional services market often lies in high-earning niches such as:
- Real estate
- Legal services
- Property Management
- Investment brokers
Working with individuals who own businesses in these fields can be lucrative and rewarding. However you need to understand who they are and why they would engage you and your firm before you can leverage the opportunities available. Using this knowledge will help you to identify potential prospects, and create service offerings that will help them maximize their earning potential and understand their financial position while reducing the time, hassle and stress spent managing day-to-day accounting functions when they could be booking more business.
We’ll explore this niche and the legal profession in greater depth, along with marketing strategies to reach them on the June 17 webinar: Marketing to Real Estate & Legal Professionals: Understanding Their Unique Needs & How to Get Their Attention. Register now.
Creating profitable partnerships and service packages for SEHI professionals
Most professionals, and business owners especially, focus on developing clients and improving skills, often to the detriment of their personal and business financial management. Common pitfalls include the neglect of tax planning, retirement contributions, payroll efficiencies and office management. These problems are exceedingly common for these clients, presenting opportunities for accounting professionals to fill those gaps.
Drilling down to look at some key characteristics of SEHI practitioners in these space illustrates some of the key characteristics and concerns of these clients. Using insights like these, your firm can develop profitable partnerships and standardized service packages. The real estate niche provides the perfect example of this strategy, so let’s take a closer look:
Real Estate Professionals—This is a sizeable niche with lots of revenue potential for firms. Consider there are more than 100,000 real estate brokerages in the United States including about 2,000,000 individual licensees and 20-25% are broker/owners. Keep in mind that the accounting needs are similar across this segment, regardless of the size of a brokerage because agents are always independent contractors. This represents the opportunity to create standardized service packages.
Who They Are
- Agents, Brokers, Owner, Property Managers, Investors
- Self-Employed, Independent Contractors (Agents)
- Two-Types – High earners, Type A go-getters and part-timers, who want a second income.
- Median gross income @$50,000/year (many licensees are part time or inactive).
- Average length of stay at a firm is 4 years
- 64% are female
Common Characteristics
- Erratic, non-guaranteed income
- Large “paycheck” vas no “paycheck”
- Social, fast-paced, always looking for the next deal in a highly competitive, cut throat industry
- Substantial ethical, legal and educational demands to meet
- They often invest in real estate, unaware of other options, tax issues, IRA options, etc.
Accounting Firm Service Opportunities Based on the Needs of:
Broker/Owners
- Taxation issues based on entity choices
- Payroll/commission payments
- Inventory management for firm’s listings
- Management of in-house expenses/bookkeeping – agents’ fees and other operating costs
- Corporate taxes and personal quarterly filings
- Retirement Planning/Succession Planning
- Insurance Needs – P&C, Health, Disability, Buy/Sell Agreements, etc.
Independent Contractor Agents
- Quarterly Tax Filings
- Retirement Planning/Savings – management based on sporadic “paychecks”
- Expenses/Write-Offs
- Real Estate Investments/Use in IRA’s, 1031 Exchanges
- Bookkeeping
- Income protection and disability insurance
As this example shows, there is significant profit potential to realize serving these professionals, if you know how to reach and serve them effectively. The opportunity exists to become a trusted partner and to create a specialized, standardized service offering that meets the needs of real estate professionals outlined above.
We’ll explore this niche and the legal profession in greater depth, along with marketing strategies to reach them on the June 17 webinar: Marketing to Real Estate & Legal Professionals: Understanding Their Unique Needs & How to Get Their Attention. Register now.