The Fastest-Growing Niche Markets for Accountants

Many accounting firms offer services to a wide range of businesses and individuals. It makes sense. After all, every business and business owner needs accounting and tax work.

The problem is, different industries have different problems, opportunities, best practices, and key performance indicators (KPIs). It’s impossible to become an expert in every industry, and it’s ineffective to provide one-size-fits-all advice and general accounting services to every client. That’s why so many accountants and CPA firms select niches.

When you become an expert in one (or a handful of) niche areas, you start speaking your clients’ language. You understand their business on a much deeper level than a generalist ever could and you know instinctively what’s keeping them up at night.

That positions you as the go-to firm for clients in that industry and seriously increases your profit potential.

5 Profitable Accounting Niche Markets

For many accountants, the challenge is selecting the right niche. To help you out, we put together a list of the fastest-growing niche markets for accounting professionals.

1. Medical Practices

Healthcare is one of the fastest-growing sectors worldwide. In the U.S. in particular, according to the Bureau of Labor Statistics’ Occupational Outlook Handbook, employment in healthcare is projected to grow by 15% from 2019 to 2025—much faster than the average for all occupations.

The pandemic brought about rapid investment and modernization across the healthcare sector. Lawmakers and healthcare providers alike are looking for opportunities to move away from fee-for-service reimbursement toward value-based models that drive costs lower and result in higher-quality outcomes.

This is creating a lot of opportunities for accountants who serve physicians and medical practices. Independent physicians, hospital-based physician groups, and other medical practice owners are often so busy serving patients that they don’t have the time to properly maintain their accounting. Few have the expertise to manage it well, either.

Besides traditional accounting, tax, and assurance work, other areas of opportunity include:

• Overhead analysis
• Advisory services to increase profitability and improve cash flow
• Valuing medical practices for sale
• Medical billing oversight and analysis
• Managed care contract review, analysis, and negotiation
• Providing strategic and succession planning
• Estate planning and wealth management services for individual physicians
• Interim and fractional CFO services
• Internal controls and forensic accounting work

2. SaaS (Software-as-a-Service)

SaaS is growing at a rapid pace with no signs of slowing down. According to Gartner, worldwide SaaS revenues are forecast to grow to nearly $121 billion by the end of 2021 and $141 billion by the end of 2022.

Accounting for SaaS is anything but simple, and many startup founders don’t prioritize accounting when they’re getting the business up and running. This can cause a lot of stress and mess down the road for SaaS companies that want to go public.

Because SaaS companies typically operate as subscription businesses, they need unique accounting, advisory, and tax services.

Potential services for this fast-growing niche market include:

• Business plan creation
• Advising on revenue recognition
• Pricing and tier optimization consulting
• Tracking research and development (R&D) costs to claim the R&D credit
• Managing cash flow and projecting working capital
• Managing equity compensation
• Establishing internal controls over financial reporting
• Navigating sales taxes in multiple jurisdictions
• Preparing for an IPO or acquisition
• Personal tax planning and wealth management for company executives

Tech-focused accountants who understand the accounting and tax challenges that technology firms face will never run out of work.

When you become an expert in one (or a handful of) niche areas, you start speaking your clients’ language.

3. Construction

The construction sector was hit hard by shutdowns in the early days of the pandemic. But it’s now experiencing a quick recovery thanks to the high demand for housing and homeowners using their equity to fund home improvement projects. Experts expect growth to continue in the coming years, due to government plans to increase investments in infrastructure.

Construction accounting is complex. The industry is contract-driven, so job costing, cost allocation, and revenue recognition are major concerns.

Other opportunities in construction niche services include:

• Accounting software setup and training
• Federal, state, and local tax planning
• Sales and use taxes
• Payroll tax services
• Cash flow management
• Succession planning
• Project KPIs
• Budgeting and financial modeling
• Assisting with IRS audits
• Internal control setup and assessments

Construction is a huge industry, so accounting firms may want to consider specializing in a particular type of construction business, such as homebuilders, commercial contractors, road and heavy construction, or subcontractors and specialty trades.

4. Real Estate

Many people purchased vacation homes during the pandemic to have a safe place to stay on weekends. Sites like Airbnb, HomeAway, and Vrbo make it easy for property owners to rent out their vacation homes while not in use.

But dealing with the tax issues of short-term rentals is anything but easy. Federal tax rules are complicated and many state and local governments are cracking down on property owners who skirt their lodging tax or occupancy tax obligations.

Real estate can be a fast-growing niche market for accountants because your clientele can include investors (both domestic and international), brokerage firms, and property management firms.

Some of the services you can provide include:

• Federal and state, or provincial tax planning and preparation
• Lodging tax or occupancy tax services
• Financial reporting
• Tracking income and expenses
• Asset protection planning
• Cost segregation studies
• Deal structuring
• Assisting with financing
• 1031 exchange strategies (U.S.)
• Cash flow analysis
• Lease analysis and review

This can be a very profitable accounting niche—especially for accounting firms located in popular tourist destinations.

5. Restaurants

Restaurants faced numerous challenges in 2020 and early 2021, but the sector is expected to rebound in a big way in the coming year, according to a forecast from the National Restaurant Association. The association’s 2021 State of the Industry Report expects sales at U.S. eating and drinking establishments to jump 10.2% in 2021 as consumers return to dining out in a way they couldn’t during the pandemic. In fact, many restaurants are having a tough time hiring enough staff to keep up with demand.

Accounting for a restaurant is often compared to accounting for manufacturing because both industries turn raw materials into sellable products. But the restaurant industry faces some unusual challenges due to a restaurant’s large and fast-changing inventory with a limited shelf life and slim margins.

Accountants can provide a number of valuable services to restaurant owners, including:

• Human resources advisory
• Tax compliance advice
• Accounting and payroll
• Cash forecasting and reporting
• Gift card and gift certificate reconciliations
• Tip reporting and tip credits
• Navigating tax credits
• Tracking and measuring KPIs
• Reducing controllable expenses
• Point of sale software integration
• Accounts payable automation
• Tracking fixed assets and depreciation

The restaurant industry has a high failure rate, so accountants in this niche need to select their clients carefully. Working with restaurant owners who understand the value of accurate and timely accounting, and are open to taking advice can bring many opportunities.

Other Growth Markets

While the above industries are some of the most promising in terms of growth for independent accounting professionals serving SMB owners, it’s far from a definitive list. In 2021, IBISWorld released a list of 200 industries expected to grow most rapidly through 2026, based on compound annual growth rate (CAGR).

Some niches that could prove to be lucrative for firms looking to specialize include entertainment (event promotion, concert venues), cannabis (growing and selling), green industries like solar power, travel/tourism, and streaming services.

How to Select a Niche Market for Your Accounting Firm

We’ve identified a handful of potentially profitable accounting niche markets, but these 5 industries are far from your only options, and you don’t have to get rid of your existing clients to develop an accounting niche.

Step 1: Consider Your Existing Specializations

Take a look at what you’re already doing well. Make a list of your current clients, the businesses and industries you’re already serving, and those that are most profitable for you. Which ones do you find most interesting or like working with? Consider building on what you already have.

Step 2: Research the Market

Gather data about the industries you want to serve. What’s the outlook? What challenges are these business owners facing? Are dozens of other firms focusing on that niche, or is there an unmet demand for expertise in that industry?

Step 3: Ask Questions to Expand Your Service Offerings

Select a few clients or new prospects in a niche and set up discovery calls. These calls aren’t about selling a specific service—they’re for asking questions that go beyond traditional tax and accounting services.

Ask business owners what keeps them up at night, what challenges and opportunities they see, and what services they want that their accountant doesn’t currently provide. This will help you build out your accounting niche to offer value-added services to your client base.

Step 4: Diversify Your Niche

Selecting a niche doesn’t mean putting all your eggs in one basket. You’re better off identifying a few complementary niches to diversify your risk.

For example, you might consider specializing in medical practices, restaurants, and real estate because most restaurant owners and physicians purchase real estate for their businesses.

Spreading your services across a few industries also diversifies your risk because when one experiences a downturn, another might be booming.

5 profitable niche markets for accountants: (1) Medical practices, (2) SaaS, (3) construction, (4) real estate, (5) restaurants.

Step 5: Become a Go-To Resource for Your Niche

To grow your niche, you need to be where the clients are. Where do business owners and decision-makers in that line of business tend to network? What publications or websites do they read? Where are their peer communities?

Join industry associations, such as the Construction Financial Management Association (CFMA) for a construction-focused niche or the Healthcare Financial Management Association (HFMA) for a medical practice niche. Gain additional certifications, develop your niche-specific accounting skills, attend local networking events and conferences, and seek out speaking and writing opportunities to position yourself as a thought leader in the industry.

Step 6: Invest in Marketing for Your Accounting Niche

To build a successful practice, you need to invest in marketing. Marketing helps potential clients find you and helps cultivate a brand that speaks to your target audience.

Consider a niche-specific website or designated landing pages for each niche on your existing website. Help businesses find you with niche marketing tactics, including regularly posting content geared toward that industry.

Speaking directly to business owners in your focus sector will help you stand out from a sea of people focused on general accounting services and give you a competitive advantage.

The Secret to Success for Niche Accounting Firms

Developing a successful practice doesn’t have to mean firing your existing clients and starting a niche-focused firm from scratch. Gradually start to acquire more clients in your target niche, focus on developing your expertise and reputation in the industry, and your niche will grow over time.

The more clients you serve in your chosen niches, the more you will learn about their business, and the better you’ll be able to serve them. Before you know it, potential clients will seek you out as the go-to specialist in the industry, and your profits will grow along with your reputation.