3 reasons why successful CPA practices consider merging

October 22, 2015

{4 minutes to read} The value of a Certified Public Accountant (CPA) practice is approximately 50% lower than 10 years ago.

CPA firms are still much in demand, but their value has dropped due to the Baby Boomers, who are all reaching retirement age almost simultaneously. Because of this, the market has become flooded with CPA firms looking for succession. With values dropping from 2x revenue to less than 1x revenue in the past 10 years, most CPA practices are facing challenges in finding their right match to carry them into the last phase of their career.

3 reasons why successful CPA practices consider merging | Cheryl GoldenbergWhy would I ever want to merge with a larger firm?

This is the first question I am asked when I talk to a successful young CPA. “I have my own firm and my independence,” they say. “No one tells me what to do, and I’m making money.” However, you have the opportunity to make a lot more money NOW while you are working, utilizing the services, niches and back up and support of a larger firm. Because of this you can cross sell to your current clients while remaining the face to all of them and pass down work so you can use your time to develop new business. And when you retire, you will have created a strong succession plan with a firm who will buy your practice at a predetermined value that is higher now than it will be in the future.

Here are 3 reasons why a successful CPA practice should consider merging: Read the rest of this entry »

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