Greetings from the Finger Lakes. The RV is parked on the east shore of Lake Seneca where we will be touring several wineries in the area. This is our third time visiting the Finger Lakes … because you never know where a new best Riesling will be found.
I hope you found our last conversation about growing your practice with speaking gigs to be useful. Several of you said you would keep my four questions in mind when crafting your next presentation. And many of you liked the four performance tips I passed on – especially the “workhorse presentation” idea.
On to this week. Speaking of feedback. I received an email from someone who talked about the incredible financial success they had because they specialized in an industry niche. And they also wanted to know my thoughts about the impact of AI on our profession. See the email below.
And if you’re new here, welcome aboard. This is what we do!
It is easier and more profitable to demonstrate that you are different …
Than to say you are better.
So here is the email I received.
Thoughts on specialization
$3 million in annual revenue from specializing – in veterinarian practices of all things. Who woulda thunk it? I would have!
I have been preaching the benefits of specialization for a long time. It is a theme, if not a mantra, of mine. Specialization doesn’t limit you – it focuses you.
Will the transition from generalist to specialist be scary? Of course it will be! Just remember, you get there over time, not over night. And many people have done it before you, including this person.
Hey, can everyone make $3 million in/from their specialty? It’s a combination of pricing and leverage … and 1:many products that you may be able sell to your audience as a result of your expertise.
Side note: I found it interesting that this person chose to specialize in veterinarians. There is a great case study in Jay Baer’s Youtility for Accountants about a Texas accounting firm that has all the work it can handle as a result of specializing in this same niche.
Thoughts on AI
As far as data science/AI go I think there are several factors in play.
#1, BVFLS is such a small niche. I wonder if the players will invest the time and money to create AI tools to penetrate the niche for what I imagine will be a small(ish) ROI. I also know from hearing Chris Mercer speak that he thinks this way, too.
#2, that said, I certainly think we are seeing these tools make inroads into the Reporting and Regulatory tiers of our service matrix (see below). Our practices will become more challenging/less profitable in those tiers as undifferentiated appraiser competition increases and DIY websites offer free or near-free valuation solutions to a growing and more-accepting client base.
Source: Ron Everett, CVA, CBA | Business Valuation Center
#3, for the shorter term (say at least the next 5 years), I think “traditional” BVFLS practices will survive/thrive in the litigation, consulting, and transactional tiers of our service matrix … primarily because the action steps/decision-making process in these tiers are not standardized or easily replicable. And it is those kinds of tasks where AI is supposed to make the biggest splash first. And again, go back to #1. But after, say, 2025 I think all bets are off. It’s hard to believe valuations will continue at such a labor-intensive pace. I feel the same way about income tax preparation services.
#4 is an extension of #3. I think we need to watch out for our referral sources. For example, if, as they say, many legal tasks will be machine-learned out of existence, that means many lawyers and law practices could go out of existence. I think the same could happen to wealth planners, financial advisors, and insurance people. If we are getting a large portion of our work from these sources, we need to be ready to pivot if/when the fallout happens.
#5 is an extension of #4. The people in the BVFLS profession fall all over themselves to get referral work from attorneys (it almost makes you feel sorry for the attorneys because they are such an important gatekeeper for all kinds of services and so all kinds of service providers want to get in bed with them). In the latest BVR Firm Economics and Best Practices Guide, attorneys were (again) listed as the #1 source for landing work. I think a better lead generation strategy, in light of #4, is to more closely align ourselves with the business owners in our niche and the industry associates/trade organizations that support them so we can create a different kind/source of word-of-mouth referrals.
Many practitioners try to be all things to all people.
They are available to everyone who COULD hire them.
But that’s not how buyers choose an expert … and it’s not how you choose an expert either.
Don’t be afraid to specialize and be the kind of expert you would want to hire.
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