How many CPAs do you know who sit on a great idea, maybe for years – a marketplace idea they’re certain would succeed if they ever got the chance to pursue it? John Lauer knows how it feels to take the next step, leveraging a solid idea to create a niche that’s boosted firm profits and reputation while providing needed accounting services.
What makes John’s experience valuable is not simply that he succeeded, but that he did it by the book, using proven best practices. This article highlights what he did and the principles he used.
Time for a Change
John joined Tucson’s Hammel & Co. in 1987. Today, the firm has three principles, a staff of 30 and revenue of just over $3 million. By 1996, John had become Hammel’s chief audit partner but, eager for a change, signed on as CFO of the printing giant AlphaGraphics.
Today, AlphaGraphics comprises nearly 300 stores in 10 countries. Its primarily single-owner franchises boast the highest average volume per unit of any franchises in the sector. Company policy requires each franchise to submit a set of monthly financial statements. Because most store owners are not financial professionals, they usually seek out local CPAs to prepare the monthly submissions. John quickly noticed that in many cases the quality of the statements was lacking.
A Niche Is Born
By 2002, John decided to return to the Hammel firm. But he didn’t come back empty-handed. He arrived with an idea which grew into a full-blown business plan to provide a set of accounting-related services tailored to the needs of AlphaGraphics franchisees.
|Best practice #1: Build from what you know. John knew printing and, specifically, AlphaGraphics, like nobody else.|
|Best practice #2: Identify your market need. John understood the needs of this group of business owners. He confirmed the need by conferring with franchisees as described below.|
Put It to the Test
John’s plan focused on offering financial statement preparation and related consulting services. For example, knowing the normal gross margin among the franchises, John was in an excellent position to advise a franchisee on ways to improve gross margins that are unusually low.
Once his business plan was developed, John sought out a few early adopters willing to test his vision. These were franchisees John knew, which meant he’d already establish trust. He did something else I strongly recommend – he partnered with the early adopters to develop his offerings and methodology.
At the same time he was proving his design, John began to establish his credentials with other potential buyers, informing them of what he was working on, and creating interest.
|Best management practice #3: Line up a select number of early adopters to test your vision, collaborate to develop the offering and gain buy-in. Concurrently, establish credentials with other potential buyers.|
John’s next step was reaching out to a set of people who could help him get to his target market – AlphaGraphics field support staff. He knew these “gatekeepers” could be influential in identifying likely buyers so that he could establish credentials while developing his offering. He was right.
Once he had some experience with his early adopters, John kept in touch with his colleagues at AlphaGraphics and secured a strategically important invitation to the corporation’s annual conference as a sanctioned vendor. He asked his early adopters to proactively support his efforts at the conference – through visibility and active discussions with other franchisees. He also listed their names on a banner at his display table. John left the conference with 15 new clients, an impressive yield.
Although the numbers were encouraging, John realized that the early stages were not about the money. He invested a full year, from notion to niche, setting aside immediate profits in favor of “getting it right.” Profits, he correctly anticipated, would come.
Today, John has more than 60 clients and a well-filled pipeline. He is perceived within AlphaGraphics as a preferred provider and his practice is set to take off! Even as this niche solidifies, John is already developing the next service offering for this receptive market.
John Lauer’s success, whether he chooses to develop as a “franchise” niche, or a “printing” niche, is well under way. His goal? A cool $2 million by 2008. His chances? Excellent!