It is reasonable to wonder why a CPA would want to buy an additional accounting practice if growing organically is feasible enough.
At Poe Group Advisors, our accounting firm buyers have an array of different experiences, motivations and desires when they choose to purchase a new firm. Here are the top 5 compelling reasons for CPAs to buy a new accounting firm:
- Slow Growth at Buyer’s Current CPA Firm
Purchasing an existing accounting practice can get you the growth you have been planning, along with the staff and systems in place to handle the growth. Another benefit is the gain of established clients and a larger referral base. The seller may also be open to giving guidance and tips on how they were able to grow and manage a successful practice.
- CPA’s Who Want to Work For Themselves
We see a lot of entrepreneurial buyers who have been working for larger firms learning great habits and skills they can use in their careers.. 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. An accounting firm 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.
- Account Firm’s Need for Greater Staff Capacity
We often talk with existing accounting firm owners who are really struggling to find quality staff people. These potential buyers 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.
- Accounting Firm’s Need for Larger Client Base
This is where we see an abundance of quality staff, but not enough clientele to keep staff busy and involved. 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 accounting services to the offerings and services your CPA firm is already providing.
- Take Advantage of Accounting Firm 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.
Benefits of Buying an Accounting Practice
When it comes to expanding your financial portfolio, CPA firms can be a successful and profitable addition. You may choose to start an accounting firm, however there are many benefits to acquiring an already existing firm. It can be helpful to learn more about the benefits and risks of starting vs buying a CPA firm. Poe Group Advisors accounting experts have years of experience brokering accounting firms for our clients. We take great pride in finding the best fit firm for you to help ensure the success of your new business endeavor. We can help you learn how to value a CPA firm and guide you on what to look for when considering an accounting firm purchase. Check out our current CPA practices for sale!
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.