I read (here) in an article by Michael Cohn that the American Institute of CPAs (AICPA) has released a Book on acquisition strategies for CPA firms. Mergers and acquisitions between US CPA firms are expected to continue at a strong pace this year, particularly among small to midsized regional firms.
The main drivers behind this trend include succession planning, cross-selling opportunities and market share expansion, say Joel L. Sinkin and Terrence E. Putney, CPA, co-authors of “CPA Firm Mergers & Acquisitions: How to Buy a Firm, How to Sell a Firm, and How to Make the Best Deal.”
Another overlooked factor is the search for talent, according to Sinkin and Putney. Unemployment remains low in the accounting profession, and many smaller firms find themselves in an increasingly competitive market for the next generation of leaders. As recruiting battles heat up, buying or selling a firm makes sense as a growth strategy or exit plan.
“Smart firms plan ahead,” Sinkin said in a statement. “We still see too many firms not preparing for transition, and those that wait too long may have problems finding the right fit.”
Sinkin and Putney are president and CEO, respectively, of Transition Advisors LLC, and have worked on hundreds of deal closings. In their book, they outline how firm leaders can determine the value of their practice when selling externally or to partners, avoid roadblocks in negotiation, exercise due diligence and strike a deal that offers the best value and deal structure for all parties. They also offer insight into retaining staff and clients during a transition.
The book also discusses ways to build a firm’s value before it’s time to make a deal, such as accurately assessing internal succession plans; matching a firm’s client base to its strengths; investing in technology, which can be a great tool to attract younger workers and enable more flexible work arrangements; and developing specialty practices or niche service areas to protect firm value.
I haven’t read the AICPA book yet myself but UK firms on the acquisition trail could put themselves at a serious advantage by getting hold of a copy. It probably applies to both accountants and lawyers.
He has written over 700 business publications (see Glossaries at http://onesmartplace.com/resources/glossaries/) and is editor of Better Business Focus (see http://onesmartplace.com/resources/better-business-focus-magazine). His Blog, on a wide range of subjects can be found at: http://onesmartplace.com/blog/
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