it’s time to be realistic.
by marc rosenberg
cpa firm mergers: your complete guide
an aging seller who has no successors on staff has four possible exit strategies:
1. persist in eternally searching for smaller firms with bright young owners to merge in and eventually take over the firm. but ask yourself: why in the world would a young, successful firm want to merge with a firm that’s older than dirt? besides, every firm in the country wants to merge in a talented young firm. the competition is formidable.
more: cherry-pick your merger partner | 34 steps to implement a merger | where mergers go wrong | what your merger letter of intent needs | 61 things buyers should explore with sellers | thirteen ways to woo potential firm buyers | one times fees isn’t the only way
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2. continue the endless search for that young manager at a bigger firm who is disenchanted working at such a large firm and would jump at the opportunity to become a partner at your firm. ask yourself: why in the world would such a manager want to work for a small firm of old guys instead of joining a more vital, sophisticated firm with much more to offer?
3. milk your firm for as long as you can. you don’t ever want to retire and you don’t want to give up control of your firm. you reason that you are better off staying independent, enjoying the freedom and the income and continuing to work until you are unable to. then you will sell your firm. of course, at that point there may not be much to sell. but you are prepared to accept that fate.
4. go out on top. merge with a great buyer and spend the last five to eight years of your distinguished career working for a firm that enables you to do the following:
- continue working for an agreed number of years, doing the work you enjoy the most with clients you love.
- take advantage of bigger-firm benefits: more diverse services, better staff, advanced technology, skilled management, efficient systems and processes and much more.
- have at your fingertips other partners who have expertise and experience you may not have. they will also provide backup if you become ill. put another way, you’ll have collegiality.
- find a home for your clients and staff. most sellers i’ve talked with over the years tell me that’s one of their biggest concerns about the future. if sellers keep milking their firm, how is that taking care of the people who are so important to them?
- get rid of the administrative hassle of owning a tiny firm that requires you to do everything. give up the work you dread and focus on your most satisfying work: taking care of your clients.
- stop your masochistic search for staff willing to work for a small firm with old owners, which usually results in the hiring of mediocre people. instead, let the buyer take care of recruiting and training staff.
- lock in your buyout.
it will come as no surprise that this consultant recommends going out on top!