Why CPA’s Buy an Accounting Practice – 5 Compelling Reasons
If growing organically is feasible, why would a CPA want to buy an accounting practice?
Our buyers have an array of different experiences, motivations and desires when they purchase. Here are the top 5 that we see again and again:
1. Buyer’s existing firm is not growing fast enough.
Purchasing an existing practice can get you the growth you have been planning, along with the staff and systems in place to handle the growth. You can get established clients and a larger referral base. You can also get awesome guidance from the seller on how they were able to grow and manage a successful practice.
2. Buyer’s want to work for themselves.
We see a lot of entrepreneurial buyers who have been working for larger firms. They have learned very good habits and skills at these firms. They have also learned that they might want to work for themselves someday. Usually they have a little money to put into a deal and a lot of great experience. When there is a good staff in place these buyers can often create some real success, and dramatically increase their personal income. A purchase for them can create an opportunity where they can really play to their strengths. Working for yourself absolutely offers the greatest freedom and income potential.
3. Need more staff capacity.
We often talk with existing firm owners who are really struggling to find quality staff people. They have the knowledge, client base and desire to grow but cannot find the right people to do the job. The acquisition of a firm that has great staff might be the answer. For firms with great clients and business development capabilities, buying a firm with experienced and talented people helps them take their firms to the next level.
This is where we see the opposite happening. Are you great at managing and training staff? Does your firm produce quality work, but business development is not your strong suit? Finding a firm with a smaller than normal staff or two partners could give you the extra client work to keep your staff at capacity. You could also use this great client base to add extra services to what you are already doing.
5. Take advantage of synergies.
Does your firm offer wealth management, or estate planning? Do you have an amazing bookkeeping and payroll shop? Buying a practice that doesn’t offer these services, but has the client base that can utilize them, can create great synergy. These are just a few examples where you can create ways to bring more to your bottom line.
About the author:
Stephanie Smith is an experienced intermediary specializing in accounting practice sales, mergers and acquisitions. Stephanie brings a strong financial background to her position at Poe Group Advisors with over 12 years of sales and marketing experience in the banking sector. This prior experience lending to and working with small business owners assists her as a skilled negotiator helping maximize value for both buyers and sellers.