Ready? Set? No! (A CPA M&A Plan)
Are You Procrastinating Your Retirement?
You know who you are. A partner or sole owner of a small or mid-sized accounting firm with a succession plan that’s somewhere between ‘Optimistic’ and ‘Nonexistent’.
You know the facts. Much has been written about Public Accounting being in a state of transition. Two-thirds of partners in firms with fees more than $2 million are over 50 years of age. For firms with fees under $2 million, nearly 75% of partners are over 50 with nearly 15% wanting to retire by 2020 and a considerably larger number wanting out over the next ten years. Of those smaller firms, more than 40% report they have no succession plan. That’s significant.
The reasons for a lack of succession planning are many. The greatest is procrastination or denial.
This ‘head-in-the-sand’ approach is often based upon a hope that things will magically fall into place when you’re ready. If it were only that easy.
The fact is it takes planning. Firms need to either hire/develop internal talent or sell/merge.
Young CPAs with a strong book of business or the critical skills necessary to be groomed for a partner position don’t grow on trees. They’re in high demand and the candidate pool is shallow. Jumping into the hiring game at the last minute is risky.
If you’re banking on selling or merging, start now! Sometimes it happens fairly quickly, but matching firms’ cultures, clients and fee structures often takes some time. It’s always better to to evaluate opportunities when you’re not under pressure. Remember, successfully transitioning clients and staff once a sale or merger has been agreed upon, is also a process done best when it’s un-rushed.
What many partners in small firms forget is that as we move forward, supply will out pace demand. More and more firms will be searching for a buyer or merger. Not every firm will find one. My recommendation – Start Now!
As Strategic Recruitment Advisors to public accounting firms, our team has working relationships with several thousand Managing Partners in every region of the US. Many are reaching out for help in finding succession candidates. More and more are asking us for assistance with merger and acquisition opportunities.
How can we help you?
If you’re among those grappling with your succession plan, contact our M&A Consulting Director, Karen Thompson at 888-492-9922 or at karent@sterlingfreeman.com. Your practice may be a match with a firm we’re working with on a sale or merger.
We’re here to help make your retirement a reality. Want to learn more about us? Visit the SterlingFreeman website.