CPA Trendlines

The market is vast, and opportunities abound for CPAs in both industry and public practice. But are they talking the same language?

by Rick Telberg
At Large

Have you been paying attention to finance and accounting’s biggest market – the small business enterprise?

Whether you’re building a career in business and industry, or building a practice to serve business and industry, you should probably take another look at what’s out there. CPAs working within small- and midsize businesses need to know how their company works, how it gets customers, what they want, how to find them and how to sell them what you’ve got. In the same vein, you need to know how other small business buy finance and accounting services. Are you getting what you want from your CPA firm? Need we say that CPAs in public practice need especially to know what clients really want? Why they buy, why they change firms, what they like and don’t like about their current outside accounting provider?
Small business cannot be ignored. Because there are a ton of them out there. Millions of minuscule businesses, some so small that they don’t even show their faces in the Yellow Pages. Some haven’t even hung out the proverbial shingle. At most you might see a late-night light in a garage or a fan in an attic window as some sole proprietor works on the widget the world’s been waiting for.

According to the Federal government, these “no-employee” businesses outnumber all the rest. And the slightly larger are almost as numerous. Together, they constitute a huge market for finance and accounting professionals. These plucky one-armed paperhangers are trying to pull themselves up by their own bootstraps. The last thing they have time for is balancing their books, preparing their tax returns or working up their financials for a bank.

To find and serve these small businesses, you need to understand them – what they do and how they do it. A recent survey from Small Business Trends LLC gives us some clues about their thinking, their buying, and their sales methods, much of which is applicable to CPAs. To delve deeper into the connections and disconnects between CPAs and clients, we’ve developed a special survey this week to compare the perceptions and practices of CPAs on both sides of the bargaining table – the “sell-side” (CPA firms) and the “buy-side” (CPA finance managers).

Not surprisingly, the Small Business Trends survey found that 55 percent of small businesses offer services while only 11 percent sell products. More surprisingly, it found that another 34 percent offer services and products.

In other words, 89 percent of small businesses are trying to market something that they can’t take a picture of ? or hand to a customer.

As you might guess, these businesses tend to market themselves through personal relationships. Eighty-three percent find customers via referrals. Fifty-two percent make use of networking events. Cold calls and direct mail rank third and fourth in marketing strategies. Sounds like many CPA firms operate not much differently from their small business clients in small business.

You can take advantage of this dependence on referrals and networking. The same referral and networking channels that bring business to them can bring them to you. Get into the same shake-and-schmooze channels that your clients or employer use. Relationships = marketing. So keep those relationships alive and active.

And before you make your pitch, consider this: the most common objection to buying is? you guessed it: price, or, more specifically, affordability. The owners of these businesses are spending their own money, not their boss’s. You can’t blame them for being a little tight-fisted. Again, sounds like a CPA firm, doesn’t it?

But that doesn’t mean they don’t want to spend. It means they want to get what they pay for.

Almost three-quarters of vendors to these businesses report that buyers very often just don’t perceive the benefits of the product or service. But this isn’t the buyers’ fault. It’s a shortcoming in the vendors’ message. Don’t let it happen to you. Sell the benefits, not the features, and make sure the buyer gets the message.

So don’t miss out on this largest of all markets for accounting and financial services. Find out where these micro-proprietors meet. Find out how much they might pay for your services and precisely what they want from you. Make sure they understand what you’re offering, and if that doesn’t do the trick, find out why not.

[First published by the AICPA]

Posted February 21, 2006