Great Case Study of Growth Through Acquisition

I wanted to share an interesting story from a conversation I had today with a CPA friend. I sought his opinion on a deal I'm considering due to his experience in selling multiple firms. Please excuse the background noise – my kids are on holiday vacation.

He has successfully sold several CPA practices, and I'm currently in the process of selling one. I valued his insights on the positioning of the business.

During our discussion, he touched on a topic that wasn't the main purpose of our meeting. I inquired about why more CPAs and entrepreneurs, in general, don't explore growth through acquisition. It's a guaranteed way to grow, albeit with challenges. Unlike the constant grind of investing in marketing, sales, and infrastructure, which can be equally expensive with no assured ROI. It often involves a hope-versus-real investing scenario where the outcome is uncertain.

Interestingly, he shared a personal experience from one of his previous firms before he sold it. The primary catalyst for the firm's substantial growth and a higher valuation upon selling was an acquisition. What stood out was not just the revenue generated from the acquisition (a relatively modest quarter-million-dollar deal) but the additional value derived from cross-selling. They enhanced services for clients who were not receiving the desired consulting support, turning it into the most lucrative move for his business.

This case serves as a testament to the power of growth through acquisition. It's not solely about acquiring revenue; it's about obtaining something complementary to your existing services. This strategic move allows for exponential growth beyond the acquired revenue. Banks often offer favorable terms to strategic acquirers. I encourage more small business owners to consider this powerful and comparatively easy means of growth, often less exhausting and expensive than organic growth.

I share this real-life case study to illustrate the potential of growth through acquisition. It's a method worth exploring, given its ease in terms of bank support and the potential for significant business expansion. If you'd like more guidance or have questions, feel free to reach out. Thanks for your time.