{"id":97679,"date":"2022-05-20t14:30:08","date_gmt":"2022-05-20t18:30:08","guid":{"rendered":"\/\/www.g005e.com\/?p=97679"},"modified":"2022-12-22t00:40:08","modified_gmt":"2022-12-22t05:40:08","slug":"merging-up-from-the-sellers-perspective","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/05\/20\/merging-up-from-the-sellers-perspective\/","title":{"rendered":"13 reasons to merge up"},"content":{"rendered":"

\"woman<\/a>and sellers’ 13 top worries.<\/strong><\/p>\n

by marc rosenberg<\/i>
\ncpa firm mergers: your complete guide<\/i><\/a><\/p>\n

merging up or selling a firm is one of the biggest life milestones that a cpa firm goes through.<\/p>\n

more:<\/b><\/strong> merger? the 100 data points you need first<\/a> | one times fees isn\u2019t the only way<\/a> | thinking merger? first ask why.<\/a> | why do you want to merge? be honest.<\/a> | four reasons to fear a merger<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

you\u2019ve toiled long and hard to build your firm. it\u2019s your life\u2019s work. adding to the anxiety is the element of facing your own mortality. when people contemplate big personal or business decisions, it\u2019s common to need to move through several stages mentally. merging your firm is no exception.<\/p>\n

<\/p>\n

stage #1. not sure.<\/strong> the vast majority of sellers at this stage end up either consciously or unknowingly putting off a merger decision. it\u2019s too scary. mentally, the seller simply is not ready. the irony is that there\u2019s no better time to merge than at this first stage.<\/p>\n

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  1. the firm will command a higher selling price from buyers because their clients and staff are younger and they will be around longer for transition.<\/li>\n
  2. the buyer\u2019s management know-how will increase the seller\u2019s income during the first five years or so, meaning the seller will financially benefit from the merger before the buyout kicks in.<\/li>\n
  3. the seller has an enviable negotiating advantage because it can approach the deal with the mindset \u201ci don\u2019t have<\/strong> to do this deal.\u201d<\/li>\n<\/ol>\n

    stage #2. seller has danced before but still isn\u2019t ready.<\/strong> at this stage, the seller is about 58-65 years old. he or she decides it\u2019s time to revisit the merger option and meet with one or more firms on a very informal basis, maybe even getting a few offers. nothing comes of it because the seller still<\/strong> isn\u2019t ready. but at least the seller has confirmed that buyers are interested, learned what deal terms might be and has an idea of what life might look like as a member of a larger firm.<\/p>\n

    when we meet with firms at this stage, a common refrain is \u201ci wish i had met you five years ago.\u201d we have just (1) shown them how low their billing rates and fees are compared to similar firms and thus, how much money they left on the table and (2) shared with them the attractive deal terms that buyers are willing to give. but if they\u2019re still not ready to pull the merger trigger, we persuade them to make their firm more attractive for a future sale by raising rates, tightening up their time records, collecting old receivables, upgrading personnel and firing clients that should have been dismissed years ago.<\/p>\n

    stage #3. let\u2019s get this done.<\/strong> after going through the first two stages, the seller is mentally ready to do a deal. the partners are at least in their early to mid-60s, and their office lease likely has less than two years left. while it\u2019s still possible to get good deal terms, at this stage the seller is most vulnerable because (1) the seller needs<\/strong> to do the deal and can\u2019t afford to walk away, (2) the attractiveness of the seller\u2019s firm has diminished from its peak value of five to eight years ago and (3) it\u2019s unlikely that the seller will participate to any great extent in the improved profits made possible by the buyer\u2019s superior management knowhow and diverse services.<\/p>\n

    a word about negotiations<\/h3>\n

    there are always two factors that greatly influence the negotiation of merger terms:<\/p>\n