Why CPA Firms Aren't Growing Faster

Source: The Marc Rosenberg Blog

The following includes excerpts, reproduced with permission, from a blog entry by Marc Rosenberg. 

We were initially surprised and stumped that in a continually improving economy, the 2014 CPA firm growth rate (including mergers) remained the same as in 2013, 6.7 percent. Firms are projecting much of the same for 2015. As always, the best way to understand this type of phenomenon is to ask the firms in the trenches what they have to say:

• Many CPA industry observers have viewed aging Baby Boomers almost entirely from the perspective of partners in CPA firms and succession planning. But CPA firms are telling us that their Baby Boomer clients are aging as well. As a result, firms have been rapidly losing long-standing, significant clients who are selling their businesses.
• Firms have been so active in the merger market and the ensuing efforts to absorb the sellers that their attention is being diverted from the focus necessary to achieve organic growth.
• Firm after firm tells us that the endemic staff shortage is holding back capacity. When this happens, partners invariably curtail their practice development efforts.
• Partners at typical local firms are increasingly delaying retirement past the traditional retirement age of 65 or 66. They love what they do, love the money and enjoy a mutual love affair with their clients. They are not eager to give this up. So as a result, they are working longer and longer, with 68 to 70 now being a targeted retirement age for some. Unfortunately, this can negatively impact the firm.
• The economy isn't as strong as some think and certainly isn't booming for all types and sizes of businesses.

For the complete entry, read “What's Holding Back CPA Firm Growth?”

From The Marc Rosenberg Blog, September 15, 2015, blog.rosenbergassoc.com.