When looking for accounting firms for sale, there are lots of things to consider. Choosing to purchase an accounting firm is a big decision that shouldn’t be rushed. What works for one buyer might not be the right situation for you.
Here are the top things to look for when purchasing an existing CPA practice.
The location of the firm should be one of the first things you consider. Are you willing to relocate, or do you want something in your area? Consider also if the practice is located in an urban, suburban, or rural location, which will likely impact your workload and the type of services you perform.
The size of an accounting firm is also an important consideration. There isn’t a right or wrong size—it’s simply a matter of personal preference. A smaller firm allows for more client interactions and can come with more growth opportunities, while a larger firm typically comes with more employees and clients and a heavier workload, but it can mean higher revenue.
If you want to specialize in a certain area of accounting, look for firms that match your interests. Many firms offer general accounting services that run the gamut depending on the needs of customers. However, other firms are more specialized and tend to focus on just a few services. The type of specialty you choose could impact the location and size of the firm. For example, a firm in an older part of town might attract an elderly clientele and do more services related to wills, trusts, and retirement. A firm in a central urban location may do more work for small businesses. You can also specialize in a number of other areas, including auditing, forensic accounting, personal financial planning, mergers and acquisitions, international tax, or a variety of other things.
When looking at accounting practices for sale, it’s important to consider the growth potential of the firm. Look at the firm’s financials to see if it has grown in recent years. You’ll also want to consider the type of clientele it brings in and if there are any competitors in the area. Match the firm’s growth potential to your own goals of where you see your career and the firm going in the next few years to make sure it is a good fit.
Financial considerations are also something to look for. Be honest with how much money you are willing to invest in an accounting firm, including the purchase price and any other growth projects or improvements you want to make. Having a realistic idea of how much you can spend can direct you to accounting firms in your budget. You’ll also want to consider the value of the firm to make sure it is priced correctly and will return a positive investment.
Look for a firm with a workload that matches your lifestyle. Some firms are incredibly busy with employees who regularly work 80-hour weeks. Some buyers thrive in that environment and love the fast-paced, busy atmosphere. Other firms take a slower pace and only expect their employees to work from 8-5 every day. Match your personal preference to the workload and culture of the firm with realistic expectations that a growing firm likely will require more than the typical 40-hour workweek.
How involved do you want to be as an owner? At some firms, the owner is simply a figurehead who comes into the office on occasion. At other firms, the owner is there every day, working alongside employees. See what has been done with the existing owners to decide if you could easily step into their shoes.
Professional Guidance for Your Purchase
These seven considerations when buying an accounting firm can help you know what to look for to find the firm that best meets your personal and professional goals. As you are considering a purchase, it’s important that you have guidance from professionals who know the industry and have experience in the sale and acquisition of accounting and CPA firms. ProHorizons has been working since 1995 to provide the professional guidance their clients need in the selling and buying process on the West Coast. Contact ProHorizons today to learn more.