CPA firm acquisition, ownership, and operations
March 30, 2025
by a searcher from University of Virginia-Darden - Darden School of Business in Simi Valley, CA, USA
Can you please share your experience as a buyer or operator of a CPA firm? What critical elements should one look for before acquiring? What are the most vital operating areas? If you prefer to share your experience privately, send me a direct message, and I will follow up. Thanks in advance.
from York University in Toronto, ON, Canada
- Extremely active space right now with a lot of CPAs looking for firms to acquire, retiring sellers, and private equity in the mix
- Definitely definitely look into what the owner *actually does* on a day-to-day basis. If the owner works 80 hours a week, what impact would it have on the business if you had to pay market-based salaries to do some/most of that work? For smaller transactions, it is a lot like buying a job which is a fine place to start so long as you know what you're getting into
- On the revenue side, I recommend looking out for customer concentration (ie. % of revenue being generated from the top 3 customers) and mix (ie. what combination of bookkeeping, personal taxes, corporate taxes, tax planning, tax advisory, etc makes up revenue). That will you understand relationship risk + potential levers of growth
- The business is professional services so the people that are part of the firm are everything. How long have team members been around? What is attrition like? Is there any layer of management or does everyone report to the owner? Who are the key people? Are they appropriately incentivized to stay long-term?
These are things that come up time and time again. I could write more but don't want to make too long a post. Hope that's helpful
from University of Virginia in Simi Valley, CA, USA