Firm Value – Perception vs. Reality

Perception vs reality

How many times have you been convinced you knew the truth about a topic, only to discover you were wrong?

Over the past 19 years, I have had numerous CPAs tell me they did not believe their firms had any value or that anyone would actually be willing to purchase their business. I have had CPAs tell me the only terms a firm could be sold under was 20% per year over 5 years, based totally on the collections of the business.

After selling hundreds of CPA firms and tax practices, I can attest to the true facts of how these practices have been and can be sold. A high quality firm with stable revenues, a good reputation, and in a good location can bring a great price, and in many cases the owner can receive significant cash at closing!

A few other misunderstood ideas about the sale of a CPA firm or tax practice we have found to be true include:

  • The transition of the clients, when handled properly, is usually very successful.
  • Employees usually handle the change in ownership without much issue.
  • SBA lenders are eager to loan a large portion of the purchase price to a qualified buyer.
  • Contact us to discuss this and any other questions you may have about your firm and a possible sale.

About the Author

Picture of Kathy Brents
Kathy Brents
Kathy is a life-long resident of Central Arkansas, where she received her undergraduate degree in accounting from the University of Central Arkansas. Upon graduation, Kathy worked for CPA firms in the Central Arkansas area prior to starting her own CPA firm in Conway, Arkansas in 1986. While practicing public accounting, Kathy had many opportunities to provide guidance to her clients as they were involved in the purchase and sale of many businesses. Kathy sold her own CPA firm in 2006. In 2004, Kathy began her 2nd career in the field of business brokerage. Kathy is also a Certified Business Intermediary (CBI) and a member of the International Business Brokers Association (IBBA).

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