The single most important step to protecting value is to understand how value is determined. Protection of value is achieved through a variety of methods. Before we disclose those methods lets identify current external factors producing pressure on practice value:  

• Aging of our profession. The aging of our profession is producing ever-increasing numbers of firms seeking succession and/or merger opportunities. In the next several years these numbers will continue to increase and produce downward pressure on practice values.   

With a properly designed and executed succession plan, the potentially negative impact of our profession's aging can be minimized or eliminated. It is possible to lock-in practice value, maintain control of your income, keep client relationship responsibility and choose the time and timing of your succession.  

• Increased regulatory environment. For some firms, depending on their current service portfolios, increased regulatory environment may force a decline in attractiveness (which translates in value). The regulatory environment can actually be made into an advantage for some firms with proper analysis and planning.    
• International Financial Reporting Standards (IFRS). The eventual compliance requirement for IFRS may have a negative impact on certain firms as they may not have the internal resources (or desire to acquire the knowledge or resources) to service the clients required to meet the standards. A trickle effect may be felt by many firms. 
• Outsourcing. In 2011, the CPA exam is being offered outside the US for the first time in history. Many believe this trend will accelerate and soon produce global competition for services currently performed by many local small tax and accounting firms.
  
  Many firms currently outsource tax work to other countries. When this is done, the rate for producing tax returns is literally a few dollars per return.  The small firms will feel the impact of this outsourcing in the next decade. It is going to become extremely difficult if you are competing for business with CPA firms outsourcing work beyond our borders.     

Those are just a few external challenges to value. Setting those aside for a minute, it is important to understand and acknowledge value can be completely different even when two firms are exact clones of one another. Many arbitrarily assign a multiple of revenues and declare that is the value. While multiples are often used to make a value declaration, it is how the multiple is derived that is the true manner in which value is determined.