Archive for the ‘Mergers’ Category
Monday, February 11th, 2013
What’s going to happen to your firm in the long run? What’s going to happen to you, as a business professional, in the long run?
Marketing guru, Seth Godin, tells us, “….the long run keeps getting shorter and that the short run has always been short and getting shorter still. In the long run, you get caught, in the long run, kindness wins out, in the long run, we learn about who you really are.”
I bet you and your partners have danced around that “what happens in the long run” topic for years. Some of you are “cashing in your chips” – another name for merging up. Still, many of you are working diligently at creating a firm that can live on. Not an easy task.
In the long run, can your firm continue to compete with the big boys? I believe there is a place for accounting firms of all sizes. Sure, the business world needs the big firms, but a big firm might not be the best fit for small business owners trying to build something for their families.
I feel this, too. I’m not one of the big boys and girls. Many consultants and advisors come across as more powerful, more persistent, someone who can drive those darn partners into submission. Sometimes you need them to do that for you.
Yet, I have advantages. My competitors are great people (just like yours) but most have never worked inside a growing firm like I did for 30 years. If they did work inside a firm, it was decades ago and they were not the person responsible for managing the firm. My other advantage is that I believe in kindness.
As Godin says, “In the long run, kindness wins out and we learn about who we really are.”
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Character, in the long run, is the decisive factor in the life of an individual and of nations alike.
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Theodore Roosevelt
Tuesday, May 15th, 2012
Today’s title is a take off on the old rhyme we used as children, “Water, water every where but not a drop to drink.”*
It’s what comes to mind when I read all of the news and articles about mergers in the CPA profession. Seems like every week I read about two or three mergers/acquisitions in the public accounting profession. And yes, in my opinion, you can call them mergers but they really are acquisitions in that there is always a “top dog.”
As I facilitate owner retreats, the “M” word is often on the owners’ minds, mostly because they have not done a good job at dealing with the “S” word (succession). Simple advice here: If you want to pass your firm along to the next generation inside the firm, you have to build a strong culture and operate a “well-run” firm. That means active management, not waiting on something to happen and then reacting. It means a strong career development program and streamlined, efficient, fully adopted operating procedures. Considering this option? Then get busy now!
If you (the owner group) are considering merger/acquisition – do your homework. Today I want to share a very informative article written by Joel Sinkin and Terry Putney of Transition Advisors for the AICPA newsletter – The Practicing CPA. The title of the article is, The Great Mystery: How Do Billing Rates and Profitability Affect a Firm’s Worth?
Here are the topics covered in the article – follow the link above and read the entire article.
- What You Really Need to Know in an Acquisition: Net Profit
- What You Really Need to Know in a Merger: Partner Profitability
- Billing Rates: Do They Really Matter?
- Deal Terms: How to Factor in Profitability
*The line is from The Rime of the Ancient Mariner by English poet Samuel Taylor Coleridge, published in 1798:
Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
Water, water, every where
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.
In thinking about your firm’s future, are you “stuck with no motion?” Are all your boards shrinking?
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I keep sailing on in this middle passage. I am sailing into the wind and the dark. But I am doing my best to keep my boat steady and my sails full.
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Arthur Ashe
Monday, April 16th, 2012
I recently had the pleasure of becoming acquainted with Brannon Poe, CPA. Poe is the author of a book, titled Accountant’s Flight Plan - Best Practices for Today’s Firms. I found it to be a very readable, on-point guide to some of the most pressing topics in CPA firm practice management.
When Poe got into the business of helping people buy and sell their accounting firms, he started keeping a “deal journal.” It became full of notes, anecdotes, and scribblings as he talked with firm owners. He has helped over one hundred practices to be sold. Later, it dawned on him that all of this information might be worth passing along. Thus, the book.
His findings are right on target and I certainly agree that he did the right thing in writing a book that can be shared with practitioners facing the challenges of running an accounting practice.
I like the titles of his chapters. Click the link to see a preview. Here’s a few examples of the chapter titles:
- The Beauty of Balance
- The Client of Choice
- The Art of the Bill
- The Rule on Receivables
You can order the book from Poe’s site here.
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The older I get, the more I see a straight path where I want to go. If you're going to hunt elephants, don't get off the trail for a rabbit.
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T. Boone Pickens
Tuesday, January 10th, 2012
In Aquila Global Advisors‘ January newsletter, August Aquila offers this advice:
- Beef up your sales and marketing efforts.
- Look for new niches.
- Think merger.
- Add new services.
Read his explanation of each one and the entire article. As he notes – - Don’t play defense. Make it happen in 2012.
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Conformity is the jailer of freedom and the enemy of growth.
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John F. Kennedy
Friday, July 29th, 2011
During these times of enhanced M&A activity in the CPA profession, firm leaders ask a lot of questions about the value of their firm. There is certainly not one answer to this question and not the point to this blog post.
What I want to stress today is the fact that IF you want your firm to be acquired “someday” you better get busy “today.” The acquiring firms want firms that have sound leadership and are well-managed.
Steve Erickson has a good post about the 5 Critical Areas That Create CPA Firm Value, here are the activities Erickson cites:
- Improve owner unity
- Execute appropriate client service strategies
- Attract and retain growing, profitable clients
- Implement efficient systems and processes
- Hire and retain talented people
Easy for me to type these. Easy for all of us to say these. Not as easy to implement and be successful at all of these. There is a lot behind each one.
I encourage you to take each one and have a meaningful conversation among your partner group. How are you doing? What can you do better? How can you actually make progress?
If you need assistance, let me know.
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Strive not to be a success, but rather to be of value.
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Albert Einstein
Wednesday, June 29th, 2011
When I think of CPA firm mergers, the lyrics to a song written and recorded by Buddy Holly and then later recorded by Linda Ronstadt comes to mind…..
It’s so easy to fall in love… It’s so easy to fall in love…. People tell me love’s for fools… Here I go breaking all the rules…
Honestly, it is NOT easy. There are definitely obstacles and many of them are unspoken.
Number one is probably “giving up control” and many firm owners tell me that it is really the #1 reason they don’t want to be acquired. Understandable, when you have been controlling your own destiny for 20 or 30 years. Other obstacles… fear of change and lack of outside interests (the fear of “what will I do if I actually retire?”).
My advice….. talk it out with your merger candidate, explore all the options openly and honestly. Talking things through and exploring all of the “what if’s” is a healthy process. Simply talking doesn’t commit you to anything – go for it.
Marc Rosenberg has a good post about his involvement in some recent mergers.
It might be “so easy to fall in love” – you never know until you explore.
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The art of love is largely the art of persistence.
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Albert Ellis
Thursday, March 3rd, 2011
Maybe someday I will get a chance to meet Scott Ginsberg. I hope so.
Scott turned wearing a name tag every day that says “Hello My Name is Scott” into an impressive career. Follow the link and see what he’s all about. He’s written 12 books, he has his own Online Training Network and he’s a sought-after speaker.
For me, I just like the way he thinks (and writes). Back in January he did a post on his blog (titled: Hello, my name is Blog) about keeping your company small.
I’ve talked to SO many people inside CPA firms who were with the firm when it was small. They had fun. Now, they are big and many are miserable. Bigger isn’t better – better is better.
Check out the 21 reasons for keeping your company (firm) small. Here’s a few:
- Small means you can respond quicker.
- Small means you can have the freedom to innovate.
- Small means you can make decisions that matter sooner.
- Small means you can actually execute your brilliant ideas.
Has your firm become too complex, too confusing, and too big to be nimble? Someone said to me once, “I never want the firm to be so big that I don’t actually know all my partners.”
Do you make decisions quickly? Is your firm nimble? Do you know all your partners?
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We should be too big to take offense and too noble to give it.
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Abraham Lincoln
Monday, February 28th, 2011
This month’s Xcentric newsletter is out and one of the articles really grabbed my attention.
During my 30-year career inside a firm, we did several mergers/acquisitions. The firm’s internal technology leader and the IT team were SO important in making the combining of two cultures and two modes of operation seamless.
Did you know that 60% of the synergies created by mergers and acquisitions are related to IT? Examples of synergies: Lower IT infrastructure costs, reduced IT head count and increased volume discounts for IT procurement.
Check out this article by Roy Keely: Mergers & Acquisitions: The big Picture Opportunity + The Big Picture Problem.
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If you are not willing to risk the unusual, you will have to settle for the ordinary.
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Jim Rohn
Wednesday, January 26th, 2011
Dave Sibits, President, CBIZ Financial Services - Is that you with Rita?
Last week at WIE, I had the chance to catch-up with my old friend, Dave Sibits. Sibits was at the conference to participate on a panel of leaders from large firms who shared their experiences and secrets of successful (and some not-so-successful) CPA firm mergers. (Check back later this week when I share lots of good information on successful mergers.)
I met Dave years ago when he was managing partner of Hausser & Taylor, a Cleveland firm that grew to be among the top 35 accounting firms in the U.S. He’s one of those guys who you immediately like and are drawn to. He reaches out to people and is always willing to share knowledge, best practices and his friendship.
As we were chatting, Dave said, “Guess what I did yesterday??” – excitement in his voice. “I rang the opening bell on Wall Street!” His excitement and humbleness came through loud and clear.
I have never known anyone who “rang the bell.” Now, I do. Even I feel the thrill.
Tuesday, November 30th, 2010
Did you ever notice that when CPA firm leaders are talking about merging-in another firm it’s the best thing since sliced bread?
Did you ever notice that when CPA firm leaders are talking about being merged-in/acquired, it’s sad, it has a tone of being defeated?
Being acquired, by the right firm, can be a positive, life-changing thing for the firm owners.
Here’s why this came to mind this morning…..
I was reading an article in Bloomberg Businessweek titled, So Google’s Buying Your Startup. Now What? One entrepreneur’s comment sounded familiar. He wanted to simply focus on building the best, simple-to-use product to help his end-users. Yet, he was continually distracted because he found himself focused on paying the bills (sound familiar?). Now, he says he “can worry about revenue at the right time to worry about revenue.”
Perhaps being acquired could give you and your entire team the freedom to focus on the joy of serving clients. Again, I stress… being acquired by the right firm – it is a win not a defeat.
