Succession is the Number One Issue Facing CPAs Today

A gap exists between the number of senior partners in firms and qualified future partners. Part of this gap is a due to partner buy-in requirements, but the main contributor is a lack of qualified incoming partners. They are technically competent, but so many have never sold anything or any referral network. How do you sell with your payout dependent on that staff that cannot sell? Runoff will occur.

That Gap Flows Downstream Into the Manager Pool

Compounding that problem is the lack of financial ability and desire to own. They do not want the financial risk and selecting lifestyle over ownership. If the manger pool is not learning how to sell, and that does not mean going to a class or academy, but selling in the field, your gap will grow and options will be limited. We can help you assess your gap and discuss your options.

Every Firm Should Be Sales Ready

Buyers want premium annuity work. Even if you are not wanting to sell, the practice should be sales ready so it commands a great price. If so, that means while you are operating it, it is becoming or continuing to add high achieving profits to your bottom-line. Let us help. Go to our Firm Value page.

Some Key Points to Consider

  1. Buyers Want Assets. They could be revenues, personnel, locations, or other intangibles. What other firms sell for may not be apply to your firm.
  2. Reality May Be Hard to Accept. A firm with a heavy 1040 practice may be difficult to sell. If rates are lower, this devalues the firm and may make it impossible to sell.
  3. Your Needs. The price you “need” is irrelevant. The buyer/acquirer is concerned about their benefits and not what you need to retire. They will pay what they feel it is worth if the buy at all.
  4. Dictating Terms. Guarantees on payout, keeping all the staff, not increasing fees or whatever the terms are will chase good buyer/acquirers away.
  5. Are You Ready to Exit? It might be hard to understand you will no longer be in charge. If you think you can still lead after you sell, you need to re-evaluate if you are ready to take this step.
  6. The Succession “Fantasy”. The fantasy of finding the young professional to groom. If they are already not an employee, your odds are very low of finding a qualified succession partner.

Let Us Help You Create a Succession Plan

One that helps you determine if it makes sense to acquire or merge a firm. Or, in some cases, does it makes sense to merge upward? What training might be needed and for who? If succession is not an option, what steps can you take to increase your value and make your practice easier to sell? The key is not to defer taking action. Time may be needed to help make your practice more attractive.

(800) 995-9186

Growth does not just happen. It is the result of collaboration and working together. We are the only growth company in the CPA profession that provides growth through M&A and organic growth support taking leadership or supplementing the business development function.