Mergers Expected to Increase in 2008

Source: Accounting Today

Most accounting firms have not trained successors, so they will eventually have to merge, even though they find the prospect of merging distasteful. According to some observers, it is a buyer’s market. And many firms are opting to build from within rather than buy firms. It costs less to build than to buy.

On the other hand, some believe buyers exceed sellers by a wide margin. But more practices will be put on the market as boomers get closer to retirement.

Sole practitioners will have a difficult time not only because it is more difficult for them to find staff, but because they are going to find it necessary to develop specialties. On the other, hand sole practitioners can use technology and the Internet to compete. Sole practitioners may also be helped by a slowing economy since laid off workers often start new businesses. Finally, sole practitioners often find the financial services niche to be rewarding.

Firms in the $2 million to $5 million range may prefer to merge up rather than make the necessary investments in recruiting, technology, training programs, marketing, etc.

Firms without an entrepreneurial environment will be seeking merger. Founding members of first-generation firms are often more entrepreneurial than the succeeding generations.

For the complete article, click here and select The Perpetual Merger Machine.

From Accounting Today, January 28, 2008, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.

Measuring CPA Leadership Effectiveness

Full Service Real Estate Investment and Mortgage Finance.