When Buying a CPA Practice, it’s not always about the price, in Fact it’s Almost Never Really About the Price
To help you put the below in context, I spent a portion of my early career selling materials to building contractors. The owner of the business was a mentor to me and one of the early lessons was the importance of knowing what your customer values.
The following is an excerpt from On Your Own! How to Start Your Own CPA Practice, available through the AICPA at www.cpa2biz.com/oyo.
Once I had been on the road and had called on a fairly large account that I was trying to bring to the business. I had visited the key decision maker several times, and like many of my initial conversations early in my career with prospective customers; our discussion focused almost entirely on pricing…and who’s fault was that? I had created several quotes for him and had spent considerable time on these…but I was getting nowhere. I had gone as low as I could go and still make any kind of profit. I came in from the road one day and was frustrated. I said to Johnny, “I don’t understand. We’re offering him the best pricing and I’ve called on him several times. Why can’t I get the business?” Somewhat typical of him, he looked at me for a second or two, paused and then very directly and in a matter of fact tone said, “Maybe he just likes the other salesman better than you.” He then got up and walked off to leave me scratching my head. Ouch! I’ll always remember that moment of truth.
He was right, absolutely right; I was making it all about price and that wasn’t the customer’s real reason for not ordering. You have to get to the real reason! Price can be where customers try to start the conversation, but if you are only to compete on price, you probably won’t stay in business very long in public accounting. You should be steering the conversation. Are you steering discussions so that your primary focus is on the price of your services? I am not suggesting that you avoid discussing price. Quite the contrary, pricing should be discussed candidly and early with prospective clients, but you should be steering the discussion toward the value which supports your price. In any business, there will always be a “cheaper” option. You must focus on what differentiates you from everyone else. You have to figure out what it is about your service that people especially appreciate. People are not price sensitive, they are value sensitive.
About the author
Brannon Poe, CPA
An author and experienced intermediary specializing in accounting practice sales, mergers and acquisitions, Brannon has efficiently and effectively facilitated hundreds of successful practice transitions. He has a unique ability to help creatively integrate information to develop clear, focused plans. He enjoys helping clients implement these plans to achieve their most important goals.