Quarterly Letter

from President John Ezell

2009 started with a lot of change. There was uncertainty in the overall economy and the banking system.  The stock market crashed. And we had a new president, which, depending on your viewpoint, either brought uncertainty or excitement.

The biggest shift we have seen this year is not financing or valuations of practices, but seller motivation. Many practice owners simply decided to put off selling because their retirement plans had been negatively impacted by the stock market decline.  At the same time, we have seen increased buyer dialog due to a surge of buyers coming out of private industry or the larger public accounting firms. The decreased supply of practices available and the increase in demand from buyers has strengthened an already strong seller market.

Certainly acquisition financing has been impacted by the economy, but not to the degree most people assume.  We have active SBA and conventional lenders funding our acquisitions.  The shift we have seen is that lenders are tightening criteria to qualify a borrower and funding a smaller percentage of the purchase price.  However, very significant loans and lines of credit are available.  This good news has been bolstered recently with the SBA’s update of their goodwill lending policy.  They have revised the goodwill restriction they implemented in March 2009, which limited SBA lenders to financing only 50% of goodwill.  This revision, effective October 1, removes the goodwill restriction and enables SBA lenders to significantly increase their financing of tax and accounting acquisitions.

While these times have been challenging, the accounting industry remains a stable industry for practice owners. We are fortunate enough to have been able to expand our staff and services in order to keep pace with the growing demand from people looking to enter the accounting field or further establish their practice.

What started as a one person business 15 years ago that became a re-branded three-person business seven years ago, has grown into a 12-person national team delivering cradle-to-sale transaction services, consulting packages, and industry education. In 2008, Chuck Hayes joined Ken Berry and myself as a partner.  We added several regional consultants and built our support staff infrastructure.  Last fall, we began to rollout a series of new webinars.  The rollout continued this year when Kevin Phillips joined us to lead our Consulting Services division. Kevin developed and presents our Becoming a Rainmaker workshop; in addition, he is fine-tuning additional workshops and consulting packages to further support your business needs—I will share more with you on these in an upcoming letter.

This new website you see today is the culmination of months of work to communicate the wealth of content and expertise we offer to you, a current or future practice owner.  We invite you to explore the site, visit our blog, and review our extensive FAQ to understand how ProHorizons can support your most important business decisions.

In closing, we are firm believers that great things can begin with a single conversation.  We look forward to hearing from you—about your challenges, issues, goals and vision—and how we can help you take the next step on your horizon.

Sincerely,


John R. Ezell
President, ProHorizons Network, Inc.