Selecting Vertical Markets for a Digital FirmThomas R. Gawne, CPA, Director of Professional

Services, CPA.com

Thomas Gawne, CPADirector, CPA.com

28 years in the tax and accounting technology sector

Speaker, Facilitator, Consultant

AICPA & CPA.com

Transforming how firms deliver Client Accounting Services as

they transition their practices to be more efficient and productive by

leveraging innovative new technologies and services.

Empowering CPA’s and businesses for the digital age

Practice

Workflow

Professional

Services

CPA.com

Services

AICPA Store

LMS

Mobile Apps

Audit

Confirmations

Payroll

General

Ledger

Bill Pay

CPA.com Firm Solutions Portfolio

Training

Professional Services

Guiding your journey

to meet the unique

needs of your firm:• Training

• Consulting

• Change Management

• Firm Tested Processes

• Firm Centric

• Client Centric

• Client Implementations • Webcasts

• Live Workshops

• Onsite Consulting

Vertical Focus

Agenda

Vertical Selection

Right Tools in the Toolbox

Vertical Expansion

Putting it in Action

Wikipediavertical market (plural vertical markets)

1.(marketing) A market made up of similar businesses

and customers with particular specialized needs.

2.A vertical market is a market in which vendors

(Accounting Professionals) offer goods and services

specific to an industry, trade, profession, or other group

of customers with specialized needs.

Geoffrey Moore

Whitepaper Releasedhttp://www.cpa.com/conference

Why Target Market Focus?

Clients aggregate into market segmentsCommunities with shared interests

Self-organized around industry, geography, & profession

Who talk to each other before making buying decisions

Two lessons from Marketing 101Cost-effective growth is impossible without target market focus

Tipping point dynamics accelerate your success

Target marketing success factorsParticipate in the segment’s relationship network

Develop domain expertise relevant to the segment

Over-deliver to create strong reference accounts

Encourage word-of-mouth referrals

More Specialization = More Value!

Medical Practices

Orthopedic clinics

Pediatricians

Chiropractors

Construction

Electrical Companies

Plumbing Companies

Non-Profit

401(c3)

401(c6)

401(c7)

Service opportunities grow

HR/Staffing decisions

Software consultation

Business expansion decisions

Business analytics/comparisons

Insurance decisions

Deeper more impactful client relationships!

How the Restaurant Niche Got Started for One

Firm . . .

Passionate about the food service industry Existing clients

•Accounting Cleanup

•Disparate Systems

• Inaccurate Data

•Out-of-balance accounting

•Tax Compliance

•Employer Tip Credit

•Cost Segregation

•Opening new locations

Client Needs

•Management reporting

•Uniformed, standardized accounting system and structure

• Internal Controls

Restaurant Industry

Niche

Wh

y th

e R

esta

ura

nt In

du

str

y?

To Transform Restaurant Accounting

Restaurant Group

Consistent Processes

Cash Control

Consolidated Financials

Multi-Entity Reporting

Full Financial Visibility

Cloud Based Systems

Today: Disconnected Systems Ideal: Connected/Holistic

QuickBooks POS Payroll

Manual Processes

RestaurantManagers

Many checkbooks

Several locations

Bookkeeper Inventory

Digital CPA

Client Accounting Services

Virtual Controllership

Collaborative Advisory Services –

Virtual CFO

Bookkeeping

Business Process Outsourcing

Advisory

Transactional

Specialize in Client Industry Verticals

Healthcare

Not-For-Profit

Technology

Professional Services

Property Management

Government Contractors

Retail

Franchises

Selection

It Starts with Why

Golden Circle:

“Start with Why”

Critical to Firm Success

Source: Simon Sinek

Vertical Selection – The “Why” Fit

Passion, Mission – the “why”

What is your firm most passionate about?

Tie in to Firm or Personal “Mission”

Existing Expertise Fit

Is there already expertise in this vertical?

Do you have existing clients in this vertical?

Untapped expertise within your firm?

Market Assessment Fit

Big enough to matter

Small enough to lead

Marketplace penetration

Room for growth?

Can we make money at it?

Need overall market analysis

Client Needs Assessment

What is the key information they need for

success?

Develop “core” then expand down to key KPI’s

Attain a deep knowledge of client best practicesPeriodicals

Trade Associations

Web Chat, Blogs, etc.

Vertical Selection – Culture FitDoes the firm culture fit the vertical?

Getting Vertical through the Cloud

Business

Intelligence

Reporting

Real-Time

Client

Collaboration

Standardized

Workflows

Client Accounting Capability

driven through

cloud computing

• Professional Services – 90%

• Construction – 76%

• Retail – 75%

• Not-for-Profit – 73%

• Manufacturing – 65%

• Wholesale Distribution – 61%

• Technology Companies – 59%

• Transportation – 48%

• Hospitality – 45%

• Franchises – 40%

• Government – 29%

Most Popular Client Verticals

for Outsourced Accounting Services

Tools

Tools

Key PrinciplesAll Digital, all in the cloud

Designed for timely “prospective” insight

Collaborative

Tools – Core Elements

A/P – Bill Pay

A/R – POS

Payroll

Inventory Control

Accounting – G/L

Document Management

Tax System

Other Industry Specific

Bill.com

Industry Specific

Paychex, ADP

Industry Specific

Intacct, Xero, QuickBooks

Sharefile, Box, etc.

CCH, Thomson, Etc.

As needed

Signature Functions Applications

Tools – Workflow Effects

Digital Core Transaction Capture

Information & Insight Delivered Prospectively

Intelligent, Timely Business Decisions Made

Tools - Collaboration

Video Conferencing – Skype, Zoom, etc.

Web Conferencing – WebEx, GoTo Meeting, etc.

Social Media – Linked In groups, Twitter feeds

Tools – Management Tracking

Workflow Management – XCM

Contact Management – CRM

Internal KPI trackers

Expansion

Expansion – Within Existing Vertical

On going services

Additional Need

Identified

Services scope

expanded

Expansion - like parallel verticals

Review “like” parallel verticals for need &

processDentists vs. Optometrists

Differing types of Restaurants

Auto Repair vs. Body Shops

Expansion – New Start Ups

Create new start-ups among different verticals

Template appropriate process steps

Concluding Thoughts

Selection key concepts

Tools of the vertical trade

Expansion past that first vertical

Make it happen!

Resources

Reference Material

“Start with Why” by Simon Sinek

Ted talk “The Golden Circle” video

“The Power of Real Time Financial Data & Analytics to

Penetrate the Restaurant Niche Market”

A case study whitepaper by Dixie McCurley of Trusted

CFO Solutions available at CPA.com

“Leveraging the Cloud to Start or Grow a Vertical Niche

Practice”

A Whitepaper by C. Keith Willis CPA.CITP, Cohen &

Company available at CPA.com

Your Title Goes Here

Staying Connected

@CPAcom

@ThomasGawneCPA

@PetePotsosCPA

@pwhitmo

Thank You

Enjoy the remainder of the

Conference!