Tips on Buying Small Firms
Source: CPA Technology Advisor
Bob Lewis, founder of Visionary Marketing,
v Patience is critical. You can’t pressure small firms into selling. Eventually they all need a succession plan, and if that plan means a sale of the practice, you want to be viewed as a friendly option when the time arrives.
v Don’t automatically reject a tax-oriented practice. First determine how much of the work can be handled by staff without too much partner involvement.
v The acquisition may be a financial transaction for you, but for the seller it may be a life-changing transaction. The transaction is permanent for the seller. The buyer can make decisions that improve the business even though it was not a favorable purchase.
v Don’t make acquisitions that burden partners with more billable time. A good acquisition is one in which staff can handle the client load and partners are free to continue to develop new business.
v A good price for a firm is one that is fair to both sides.
v A good acquisition from the buyer’s perspective is one that produces cash flow immediately.
v A good acquisition from the seller’s perspective is one that assures their cash realization and makes them feel comfortable.
v Start the acquisition process in May, when the difficult tax season is still remembered.
From: CPA Technology Advisor, May 2005. Click on the following link for the complete article:
http://www.cpatechnologyadvisor.com/publication/article.jsp?pubId=com.proteus.cygnus.value.Publication@d2c8c0&;id=724.