Multiple products, niches or markets

The general advice from marketeers and others is to niche for maximum profit and minimum effort. But what if you have multiple niches?

I have three core products: I speak, I write and I provide what I broadly describe as consultancy (including coaching and an online training course). These all interlink as hearing me speak may lead to people buying my book. Reading my book or other articles that I’ve written may lead to people signing up for me to coach them or for one of my online courses or a piece of ad hoc consultancy. There may be multiple products/services but they are all for a very similar market.

Except that I also continue to provide all this (writing the book is my next project) for generic businesses as I used to as the advisory part of my practice. So now I have at least three products that I provide to two different markets. I also have a couple of part time FD roles where I am employed for my strategic, as well as financial, knowledge and experience.

Real life is never as simple as those beautifully theoretical business books.

There are different decisions to be made even for a company and you may choose a mixture of these ideas.

  • Drop one of the markets to focus on the most lucrative. You will have one set of marketing and one set of systems.
  • One brand with two different pages on the same web site, one for each market. This is the cheapest and simplest. You may have one set of systems but one-two sets of marketing. Consider two sets of business cards or whether you can have one side relevant for each market. Also consider one business card with company details on the front and both markets mentioned on the back
  • Two brands but one company. This would avoid confusion over people coming across the wrong literature/marketing material. You would have two websites with two different brands/trading names of the same limited company. You would still run your business with one set of systems.
  • Two completely separate companies. For accountants this would require two sets of accounts, two lots of admin and two practising certificates, PI insurance, AML systems and HMRC agent set ups. Although you would have to have two sets of systems it may well be the same systems copied and pasted. There is a chance that the markets/products would be sufficiently different to allow you to have one company VAT registered and the other not but I would recommend taking expert advice on this. Even as profession which is good at admin I can’t see much point in creating a second company unless you plan to sell off one side or the other in the future.

As you can see I’ve opted for the second but may well create two separate brands at a future date if there is no clear driver for one market or the other. Some of my products may take a back seat allowing me to refine my marketing further. What you choose to do will depend on your individual circumstances.

If your business is at an early stage then you may take a wait and see approach but, if you are more developed then you should spend time with a professional marketing consultant (I’m happy to recommend one)

How do I set my prices?

When you first start up it is often hard to know where to pitch your prices

There are three main ways of setting your prices and a number of variations on each

Hourly billing

The traditional model is 1/salary, 1/3 overhead contribution and 1/3 profit. This should be a minimum if you want a sustainable and saleable business. If you are self-employed with no staff then you should still charge a comparable amounts as you are doing the work as well as running the business. You should also allow for your non-chargeable admin and marketing time.  If you want to grow in future you will need to cover employee wages plus a profit margin for yourself without changing your prices too much.

Fixed pricing

Fixed pricing is more normal these days although, for bookkeeping, you may want to offer three months on an hourly rate before fixing. This means that you have more time to cover any teething problems or initial backlog plus you get to work out your likely ongoing hours. 

Once clients are on fixed rate you can use repeating monthly invoices and they can pay you on standing order so you will save admin and credit control time as well as improving cashflow. Most clients also prefer regular outgoings.

The price can be fixed using on a cost plus model based on estimated hours or on value pricing.

Value pricing

This is often confused with fixed pricing but it is based on the value to the client irrespective of the cost.

I once wrote a single letter to HMRC which took no particular research and saved a client £2,400 in tax. The admin that I had to complete, in line with ICAEW guidelines, in order to take on the client actually took longer than writing the letter.

So what do you think I should have charged?

  1. £100 as the notional cost of my time to write the letter
  2. £300 as the cost of my time to speak to the client, carry out all the necessary new client admin including money laundering checks for HMRC and then the time to write the actual letter (this was a one-off piece of work)
  3. £800 as the client would still be better off by £1,600 if the appeal was successful
  4. Not a fixed fee but 50% of any tax saving

There’s a whole chapter on pricing in my book and even that is just the tip of the iceberg.

The Numbers Business – update

Friends will be pleased to know that ‘The Numbers Business: how to build a successful cloud accountancy practice’ is now completed.

I’m particularly excited because Gary Turner, head honcho of Xero UK, has written a very kind and flattering foreward.

The final draft has been approved by my publisher, Sue Richardson Associates, and is now with them to produce covers, copy-edit, typeset and print ready for publication on 10 September.

If you would like to be notified of when the book is available to order then please let me know via the contact form.

Next projects:

  • My next book will be on building a more generic business intended to help non-accountants to set up their own business.
  • I will be writing an online course for Directors including one along the lines of finance for non-financial managers. Please use the contact form if you wish to be notified when this is available

Never throw away a good idea

I love ideas

When my son was small I’d praise him because he was full of ideas. And some of them were good ones. At the time of writing I’ve recently helped to judge a dragons’ den afternoon at a local primary school. Kids are so uninhibited in their thinking which is always great fun. (OK, perhaps not always fun as a parent digging your child out of scrapes but we usually laugh afterwards.)

As such I keep all my half decent ideas in a folder of post it notes, magazine articles, an ideas list and more detailed notes on my phone.

Even this article started off being typed on my phone as the thoughts just came to me between meetings.

For some time now I’ve been planning to write a book using the materials from my business articles, blogs, Money Matters talks and training workshops such as our Strategic Planning Day and Budget Day as well as our Directors’ Webinars. This was almost a pipe dream as it was so far behind growing a successful business myself (that’s taken a few years!) and then my June 20117 ironman attempt required 6 months of intensive training.

After my iron distance triathlon I knew that I’d need a new project to keep my interest so I spent my recovery week eating, sleeping and looking for something that excited me.

The following week I found myself putting together the outline of a business book. A mixture of business theories, my own practical experiences and stories of clients and friends. I also received my first payment for an article and a further two  commissions which means that I am now a professional writer.

The framework of my first two books (one for accountants and the other for general business owners) came together quickly because I’ve been saving ideas and material for a long time. In the process I also found enough ideas for two further books although they will require more research and content. The first book ‘The Numbers Business: building a successful cloud accountancy practice’ is due for publication 10 September 2018

This is quite an exciting time but it also emphasises that you should never throw away a good idea. Even our quarterly Money Matters events came out of a file of ideas pulled together with the help of Evolution PR (thanks, Kerry) and a few guest speakers (thanks you lovely lot)

So get yourself a notebook, paper or electronic, to capture all the ideas that you have. Even if you’re not likely to use them for years.