Why Growing your CPA Practice Should be Part of your Succession Plan
1. Growing your CPA practice will help attract buyers when you go to sell.
The trend is your friend. Buyers want to see a sustainable, steady increase in revenue and profits. One year does not make a trend. It doesn’t have to be double digit growth, but nice, predictable, single-digit growth will give buyers a lot of confidence. Growth equates to good succession planning because buyers want to know that they are buying a practice that is headed in the right direction.
2. Growth allows you to keep your practice “Hair Free”.
What is “hair”? Here are a few examples – problem staff, problem clients, underperforming focus areas, and undesirable and/or “oddball” specialties. When you are growing your CPA practice, you are far less likely to hold onto things that aren’t working well. Growth tends to put you into a mindset of abundance. It provides the confidence needed make decisions that may cause temporary pain or unpleasantness. Pruning and growth go hand in hand. If your practice is stagnant, then pruning represents a permanent decline. If you are growing your CPA practice, then pruning represents a short-term bump. The bottom line is that buyers want relatively “hair-free” practices.
3. Growth helps you maintain or improve your profit margins.
Let’s face it, if you are not continually increasing your prices, you are losing ground. Increasing prices takes confidence. If you are doing it properly, you will lose a few price-sensitive clients on an ongoing basis. If your practice is constantly growing, then losses are a normal part of doing business. Growing revenue without growing margins is counter-productive. Great profit margins are desirable when you go to sell your CPA practice.
4. Growth keeps you sharp.
At any stage of your career, stagnation can set in and be very frustrating. Growth creates change and movement which requires owners to be alert. This can revive one’s career and can even extend it for many years.
• What bottlenecks need to be removed before creating growth?
• What circumstances would motivate us to grow?
• What can we let go of in order to create time to focus on growing the practice?
• What happens if we do nothing?