Buying a CPA Practice? Two Key Questions
Two Powerful Questions to ask when thinking about buying a CPA practice:
1. Do I want to?
About 14 years ago, I read
The 7 Habits of Highly Effective People by Stephen R. Covey. (If you’ve never read this book, consider adding it to your Christmas list.) I was 30 years old at the time. Looking back, one particular exercise in the book had a major impact for me. I wrote down all of my lifetime business and personal goals. At the time, I didn’t recognize how impactful this would be. (Even though the book describes a very interesting and compelling lifetime study of the results of a group of college students who were asked to write down their goals many decades ago.) It’s now very interesting to look back at what I wrote 14 years ago. One of my personal goals was to be able to take at least 2 full weeks of vacation time with my family each and every year to go somewhere fun. At the time, I was working a lot and that seemed like a big stretch. I’ve done that each year for the past 10 years and our family is much closer as a result. We’ve been on some great trips!
But back to the key question…Do I want to? The big impact of goal setting is that it helps you create a mental target…a vision if you will. This vision serves a very useful purpose. When opportunities cross your line of sight, you will have a far easier time answering whether you want to or not.
Having a clear vision allows you to say yes AND no much faster when considering opportunities. A lot of this thinking happens in the background. For me, I knew I wanted to be self-employed, have a good work-life balance and do work that required continuous learning, creativity, and had a lot of interaction with people. I looked at many opportunities and when they didn’t fit that criteria, I quickly passed.
Having clear goals has helped me be patient and say no when an opportunity wasn’t right, and has helped me ask the right questions and act quickly and decisively when an opportunity has been aligned with my goals.
2. Can I succeed?
This is the more difficult question of the two. Sometimes the only way to know is to try, and no one ever gets to be 100% sure. The best approach is to either go in with a high degree of confidence or go in a with very low level of personal financial risk (or both). Below are two questions that you can ask yourself that might help you evaluate this question more carefully. Let your answers be creative and try to create a long list for both.
1. HOW can I succeed?
2. How might I fail?