There are lots of reasons why a CPA firm might be ready for acquisition. Business climate changes, firm growth, or partners reaching retirement age are some of the most common.
Regardless of why you're interested in getting your CPA firm acquired, it's important to understand that the process can look different depending on your level of preparedness. This article will cover eight tips to help you prepare your firm for acquisition.
For many firms, acquisition is a last-ditch effort to keep their firm alive, and they don’t anticipate it becoming a reality for quite some time (hopefully). But given the state of the world and our economic outlook, we might see more and more CPA firm acquisitions over the next few months and into the new year. Here’s what you need to know to make it happen and save your firm’s name.
Here's an easy one!
If buyers see a great staff that's ready to work and move forward in innovative new ways, that factor could end up making the buying decision for them. It's tough to find teams that are fully-trained, ready to learn more, and happy to serve clients. If you can keep your staff skilled, happy, and effective, it might help you achieve that merger or acquisition you've been waiting for.
Delays in the mergers & acquisitions (M&A) process are never fun—and they usually spiral into even longer delays, too. You should avoid delays at all cost and work with urgency when you approach purchasing time.
Time kills deals. You need to smooth out the specifics and legalities of your situation to help make everyone comfortable and clarify which steps you should take going forward.
Culture and ego clashes are never fun—we can all probably remember them ruining entire friendships and classes in our elementary school days. How well do you think these problems play out on a large scale? If someone were to try to acquire your firm, what do you think they'd feel if they were constantly running up against culture and ego issues?
It's important to maintain a stable firm culture and communicate what that culture is clearly during the buying process. Ideally, no one should get too caught up in their own ego for their own good. We all get along best when we work in tandem—bring that idea into your firm and your acquisition.
If you want to avoid and solve culture problems (as mentioned above), you should put in some work to make sure your firm's culture is crystal clear. Your CPA firm is more likely to be acquired if you provide potential buyers with a vision of:
All of these concepts can have their own cultures attached to them. Staff culture, for example, encompasses everything from how long (and hard) staff are expected to work to office infrastructure and travel details.
When you offer insight into your firm's culture, acquisition becomes more real—and it's more likely to happen smoothly, too.
Innovative technology is one of the most evident ways to "beautify" your firm before you shoot for acquisition. However, some of that technology can run up big bills, but there are lots of beneficial pieces of tech that are affordable, too.
If you aren't sure where to start your tech makeover, consider:
Lots of traditional accounting services will be replaced (or are being replaced) with technology. If your firm serves some unique niches, it helps you stand out and positions you well for the future.
Buyers are interested in firms that are on the cutting-edge of the accounting sphere. The more you have to offer and the more that sets you apart from the competition, the higher your likelihood of being acquired.
Remember how we said to get as much sorted within your first few meetings with a buyer as possible? Remember that ego clashes are a huge no-no?
Those are roadblocks. You might encounter a lot more during acquisition, too. Your best bet is to try to avoid causing problems and confusion during this process.
There's no use in getting into talks with a buyer only to stumble when you're not sure about money. Consider:
While we’ve covered a good amount in this blog post and pointed out some helpful dos and don’ts, there’s no golden ticket to acquisition. It takes a lot of consideration, planning, and negotiation before a good deal is finalized. But if you’re sure of your decision to seek acquisition and put in the effort as described here, you’ll be in good shape and look attractive to buyers.
An extra note on how to make your firm even more attractive—and ensure a smooth transition—take an extra moment to consider your technology. Botkeeper is the platform to bring into your CPA firm if you're trying to get acquired. We help firms look more attractive for M&As, and our team of experts works with clients to assess:
If you're prepared to change direction and get acquired, Botkeeper can help. We offer the automated bookkeeping component that will further your steps in the right direction. Reach out to talk with us today and find out more about our suite of offerings.