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valuing an accounting firm for sale

plus: a powerful equation.

by joel sinkin
transition advisors

when i teach a cpe class on how to value an accounting firm, the first question people ask is what is the multiple? as you likely know, an accounting firm is traditionally sold on a multiple of revenues.

the multiple is just one part of the equation and not a place to end – let alone start – the valuation process. the overall terms must include factors such as how much money if any up front, how profitable is the acquisition, how long is the retention period that impacts the seller’s balance due based on client retention and how long is the payout period? read more →

mergers & acquisitions

the 4 c’s of m&a success for accounting firms

start planning years, not months, ahead.

by joel sinkin
transition advisors

every week we hear about another merger or acquisition.

there are many reasons firms consider merging.

the most common objectives follow:

  1. talent is in short supply in today’s marketplace. many firms are using mergers to add talent for growth and/or a tool to build an internal succession team for the long-term security of the firm.
  2. cross-selling niche services: we are seeing firms entertain mergers that create strong cross-selling opportunities.
  3. growth from having a larger platform of services, increased capacity and through the addition of the clients a merger brings.
  4. marketplace refers to mergers that provide the successor firm a flag in a new harbor.
  5. succession: a strong percentage of accounting firm owners are seeking to reduce their time commitment to their firm so succession remains the number one driving force of most small firm mergers. read more →