november2021 - 9

Here's an example of the
rough difference between
selling just your client base
vs. a great firm with solid
processes and people:
PURCHASE:
YOUR CLIENT BASE
ACQUISITION COST:
0.75-1.2 x top-line
annual revenue
PURCHASE:
YOUR FIRM WITH STRONG
PROCESSES AND SOLID
PEOPLE
ACQUISITION COST:
1.5-2.5 x top-line
annual revenue
are well-trained will drive up your
value. If you have good processes
and strong workflows, your value
will bump up even more.
Here's an example of the rough
difference between selling just
your client base vs. a great firm
with solid processes and people:
Purchase: Your client base
Acquisition cost: 0.75-1.2 x topline
annual revenue
Purchase: Your firm with strong
processes and solid people
Acquisition cost: 1.5-2.5 x topline
annual revenue
Having a strong team and workflow
makes a measurable difference,
which is why a culture fit and defining
the roles for your people should
be important in your plans.
3
WHAT'S IN IT FOR
YOUR CLIENTS?
The reality is, when you sell
your firm, your clients may
want to shop around for a different
service provider, so take the time to
understand and inform your clients
why this sale is good for your clients.
Ask yourself:
* Are there going to be complementary
services for your clients to receive a
more holistic experience?
* Will the new buying firm provide a
service that your firm doesn't offer
to help fill the gaps for your clients'
outcomes?
At the end of the day, your firm's
people aren't just your employees;
your clients are people, too, so make
sure you're not rewarding their business
and loyalty with a firm that isn't
aligned with yours.
4
YOUR BOTTOM LINE
Ultimately, the price needs
to be right. As I said previously,
firms with solid processes
and strong teams generally
sell for more than the firms selling
revenue only.
Think about it from the buying
firm's perspective. If that firm has
to spend time and money on sorting
out your processes and training
your team, it's not just going to cost
the firm that time and money. It
will cause stress, and likely require
the firm to divert resources away
from growth activities, such as
cross-selling.
Basically, if your firm runs
smoothly, then it's worth buying. So
it's in your best interests to ensure
your processes are streamlined,
your team is high-performing, and
your metrics are tight.
When you can do this, two
things will happen:
* Your firm's value will increase.
* You can afford to be picky about
who you sell to, ensuring the right
culture fit, upward mobility of your
team, and better outcomes for your
clients.
Don't just make a sale; make
the right sale.
Finding the right firm to sell
your accounting practice to isn't
just a matter of finding the highest
bidder.
NOVEMBER 2021 ■ www.CPAPracticeAdvisor.com
9
Unless you want your years of
hard work in building your client
base, developing your team and
processes to result in a quick sale
that doesn't sit well with you as
a person, then selling to the first
bidder might not be the right path
to take.
However, if you're interested in
maximizing your sale price, while
also safeguarding your firm's legacy,
team's future, and client outcomes,
then it's important to do your due
diligence in setting your firm up to
generate the best valuation. Yes,
that's a bottom line, but it's dependent
on your culture and people. ■
As director of services for Karbon, Joe
Carufe's primary role is to ensure accounting
firms have a successful onboarding to
Karbon. With 10+ years in the accounting
industry as an accounting firm owner and
leader, Joe understands how to build scaling
firms, the challenges firms face, and
how to solve those challenges.
http://www.CPAPracticeAdvisor.com

november2021

Table of Contents for the Digital Edition of november2021

From the Editor: CPE for Free at Ensuring Success
Quick Networking Tips Your Can Implement Today
Technology: A Critical Driver of M&A Synergy
How to Better Manage and Track Your CPE Credits
How to Find the Right Buyer for an Accounting Firm
Modernizing Outdated Areas of Your Accounting Firm
Marketing Your Firm: How to Create a Press Kit if Your Firm Acquires or Merges into Another
From the Trenches: Continuous Education to Meet Technology Changes
The ProAdvisor Spotlight: Productivity Innovations Announced at QuickBooks Connect 2021
The Leadership Advisor: Self-Care for Busy Accountants
The Labor Law Advisor: The Pandemic: Unforseen Events and Unforced Errors
The Millennial Advisor: Every Action Matters
The Staffing & HR Advisor: Staying Ahead of the Curve: What's New in Accounting for 2022?
Apps We Love: Lifestyle Apps
Trust & Empowerment: Two Keys to Emerging Unscathed from the Great Resignation
AICPA News: A round up of recent association news and events
Bridging the Gap: 5 Growth Trends for 2022
november2021 - 1
november2021 - 2
november2021 - 3
november2021 - From the Editor: CPE for Free at Ensuring Success
november2021 - Quick Networking Tips Your Can Implement Today
november2021 - Technology: A Critical Driver of M&A Synergy
november2021 - How to Better Manage and Track Your CPE Credits
november2021 - How to Find the Right Buyer for an Accounting Firm
november2021 - 9
november2021 - Modernizing Outdated Areas of Your Accounting Firm
november2021 - Marketing Your Firm: How to Create a Press Kit if Your Firm Acquires or Merges into Another
november2021 - From the Trenches: Continuous Education to Meet Technology Changes
november2021 - 13
november2021 - The ProAdvisor Spotlight: Productivity Innovations Announced at QuickBooks Connect 2021
november2021 - The Leadership Advisor: Self-Care for Busy Accountants
november2021 - The Labor Law Advisor: The Pandemic: Unforseen Events and Unforced Errors
november2021 - The Millennial Advisor: Every Action Matters
november2021 - The Staffing & HR Advisor: Staying Ahead of the Curve: What's New in Accounting for 2022?
november2021 - Apps We Love: Lifestyle Apps
november2021 - Trust & Empowerment: Two Keys to Emerging Unscathed from the Great Resignation
november2021 - 21
november2021 - AICPA News: A round up of recent association news and events
november2021 - Bridging the Gap: 5 Growth Trends for 2022
november2021 - 24
https://www.nxtbook.com/endeavor/cpapracticeadvisor/august2022
https://www.nxtbook.com/endeavor/cpapracticeadvisor/june2022
https://www.nxtbook.com/endeavor/cpapracticeadvisor/april2022
https://www.nxtbook.com/endeavor/cpapracticeadvisor/december2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/november2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/october2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/september2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/august2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/july2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/june2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/may2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/april2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/march2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/february2021
https://www.nxtbook.com/endeavor/cpapracticeadvisor/december2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/CPA_Practice_Advisor_November_2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/october2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/september2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/august2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/CPA_Practice_Advisor_July_2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/CPA_Practice_Advisor_June_2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/may2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/CPA_Practice_Advisor_April_2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/CPA_Practice_Advisor_March_2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/february2020
https://www.nxtbook.com/endeavor/cpapracticeadvisor/december2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/november2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/october2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/september2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/august2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/july2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/june2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/may2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/april2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/march2019
https://www.nxtbook.com/endeavor/cpapracticeadvisor/february2019
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