Benjamin Franklin once said “By failing to prepare, you are preparing to fail.” This quote applies to most anything in life including purchasing a CPA firm or tax practice.
While this 6 Step Process may not be all inclusive, it will help any buyer be well on their way to achieving success in the purchase of a firm.
Step 1-Explore your options.
Buyers, take time to think through which route is best for you. Are you better off growing a firm organically or purchasing a firm? There will be a tradeoff between the cost of purchasing an existing firm and the cost of operations while you are growing the business from scratch for a period of time until the new business is successful.
Step 2-Know what you want.
What size firm would you like to operate? What is the best location for your business? What type of services do you want to provide? Do you want to offer services to a specific industry?
Step 3-Evaluate your resources.
Evaluate your financial resources to make sure you can fund what have chosen to pursue. Evaluate your personal resources as well. Do you have the skill set to manage your own firm, employees, work flow, and clients? Finally, you need to evaluate yourself. Do you have an entrepreneurial spirit?
Step 4-Search for the right practice.
Based on the criteria you identified in Step 2, search websites and trade publications to see what firms are available that fit your criteria.
Step 5-Negotiate to win.
Once you have met with sellers and you decide which firm you want to pursue, make a reasonable offer with reasonable terms. The best deals are the ones where all parties believe it to be a good deal. Work to create a “win-win” deal with your seller. Creating goodwill between you and your seller will be instrumental in assisting in the transfer of the clients.
Step 6-Transition.
This brings me to the last step we need to address. Unless you handle this step well, nothing else you have done to this point really matters. After closing, you need to focus on getting the clients transferred to you, which includes letting them know your goal is to take great care of them. You also need to let your new employees know you value them. Make sure you listen to them as they have worked in this firm and with these clients long before you were in the picture.
Success can be yours! Just take the time to work through the process until you feel you are making the right decision and soon you will be on your way to experiencing the joys of owning your own firm!