CPA firm buyers in their 20’s and 30’s who have multiplied their results.
In just the past few months – by a stroke of pure luck – I’ve had the pleasure of reconnecting with four past buyers who bought CPA firms through us when they were in their 20’s and early 30’s. One of these buyers was just 25 when he purchased, two were 28 and one was 30.
First of all-the results!
In what I don’t think was just coincidence, each one of these buyers has done extraordinarily well. Two buyers have multiplied their practice revenue well over 10 times throughout a ten year period. One buyer is able to work only about 6 months a year in the original firm he purchased, and another has grown about 5 times since 2011.
So what has driven this?
It’s hard to say exactly. I have a few theories and without a larger sample that’s the best we can do for now. This is something we are going to watch and dig into more. Stay tuned for more on this topic though. We recorded a podcast with one of these buyers that will come out in February and we also did a joint column that will soon be published by the AICPA’s CPA Insider.
Theories:
Clients like their energy and enthusiasm.
Whatever these younger CPA buyers lacked in experience, they more than made up for with energy and enthusiasm. The first time we ever sold to a younger buyer, I remember me and the seller both being concerned about how clients would take to these younger CPAs. We coached our buyer to remember these words…”I don’t know, but I can find out.” It worked. Clients were perhaps a little more forgiving of timelines and even mistakes. Attitude though is absolutely essential.
They are naturally more willing to take risks.
They don’t have the pain of negative experiences holding them back. They also have fewer pre-conceived notions about how things should be. This seems to have freed them up from conventional wisdom and allowed them to experiment in ways that have paid-off well.
They are able to reinvest their earnings.
None of these buyers had families when they first purchased. They were able to devote themselves fully to their firms and plow their profits back into the business.
Entrepreneurial CPAs are more likely to emerge at this age.
People who are naturally highly entrepreneurial are likely to find out sooner rather than later. They all seem to be driven by the desire for freedom and at this point I can’t imagine any of them working for someone else. Each one of these 4 buyers were “naturals” in a sense. Buying didn’t really even seem that risky to them.
