Defining Your CAS Client Avatar

Read Time: 5:00 minutes

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One common challenge accounting firm owners face when diving into CAS is determining which clients are the right fit. I often hear questions like, "How do I price CAS for smaller businesses?" or "Should I niche down, and if so, how do I choose the right one?" These are fair questions, and the answers can shape the trajectory of your CAS offering.

Let's discuss defining your "client avatar"—the ideal client profile for your CAS practice. Choosing the right clients ensures your services are profitable and impactful. Conversely, working with the wrong clients can leave you overworked, underpaid, and frustrated.

Why CAS for Small Businesses is a Tough Sell

Performing CAS for a company generating $300K in annual revenue or less is a tough gig. Here's why: using a gut-check pricing metric of 1% of revenue, you're looking at a fee of around $250 per month. That's a small budget for comprehensive services like bookkeeping, reporting, and advisory work. It's hard to deliver meaningful value at that price point without feeling like you're spinning your wheels.

The chart below is a helpful guide to understanding where businesses fall in their growth journey. For CAS, businesses in the "Steady Operation" stage are where pricing starts to make sense but can still feel like a stretch. Once you reach the "Local Success Story" level, the economics begin to work in your favor, with CAS fees hovering around $850–$4,200 per month at that same 1% rate.

CAS providers can deliver significant value when a business hits the "Managed Organization" stage, often serving as an outsourced controller or fractional CFO. At the "Mature Company" level ($20M+), businesses typically need full-time in-house roles for bookkeeping, controllership, and CFO functions.

The beauty of CAS is that you can tailor it to fit your strengths and goals. My firm’s sweet spot for coaching and fractional CFO services is businesses with revenue of $1 million to $10 million, where I can provide impactful support without competing with in-house teams. On the other hand, I know a large and successful fractional CFO firm whose sweet spot is the “Mature Company” level, helping businesses with more complex needs at $20M+.

The key is to define your client avatar, identify where you add the most value, and build your CAS offering around it. Make it your own, and success will follow.

📢Announcement: Based on the number of responses, I will be building a CAS-only community (The Kick C@$ Community). If you are interested in joining, please complete this quick form and provide feedback. 

Should You Niche?

Niching is one of the common strategies for growing a CAS practice. A niche allows you to:

• Refine your processes for efficiency.

• Dial in your marketing to target specific clients.

• Specialize your technology for industry-specific needs.

You can become the go-to expert in a particular industry, streamline your services, and build a reputation that attracts ideal clients.

But the wrong niche? That can be devastating. Think about industries that faced existential crises:

• Sit-down restaurants during COVID: Lockdowns and in-person restrictions decimated this industry.

• Real estate during the 2008 financial crisis: The housing market collapse hit real estate firms hard.

• Tech startups during the dot-com crash: Many vanished overnight, leaving their accountants high and dry.

The lesson here is that niching comes with risk. Before diving in, assess the long-term stability of the industries you're considering. How did they perform during past downturns? What does their future look like? Diversifying within a niche—like expanding from sit-down restaurants to include food trucks or caterers—can also help hedge against unexpected downturns.

I keep my firm’s ideal client base broad by specializing in trade and professional service companies. I can be broad because I love consulting on pricing and employee compensation. Almost every service-based company trades time for money, and labor is their number one cost.

Although my client avatar is broad, I can give referral sources a general idea of the clients I can help by sending them an email like the one below. Now, if I were looking to scale my firm, I would hone in on one or two industries. That would allow me to do more direct targeting rather than rely mainly on referrals and peer-to-peer networking.

Final Thoughts

Defining your client avatar is vital for building a sustainable CAS practice. It ensures you're working with clients who value your services, align with your expertise, and contribute to your firm's profitability.

Smaller businesses might not have the budget to justify your CAS offerings, while companies at $1M–$20M are often the sweet spot. Once businesses grow past $20M, your role shifts from performing CAS to helping them build internal accounting teams.

If you're considering a niche, choose carefully. The right niche can transform your practice, but the wrong one can leave you scrambling when an industry experiences turbulence.

Thanks for reading, Luke Templin!

P.S. There are two ways I can help you grow your CAS offerings when you are ready:

1. Join my How to Start Offering Advisory Services Cohort. The next one starts in January.

2. Cannot wait until January? Check out the pre-recorded version here.