Archive for the ‘Mergers’ Category

Thursday, August 13th, 2020

The End of Your Firm

“The end is near when organizations don’t develop people.” – Dan Rockwell

Do you foresee the end of your firm?

The quote, above, describes what has happened to public accounting firms. The quote, above, is the reason that M&A frenzy has survived for so many years.

Years ago, I remember Allan Koltin sharing a list of CPA firms that used to be in existence. They were nationally known firms and they disappeared for various reasons – poor management, reputations lost, scandal, and sometimes for growth. The list wasn’t extremely long.

Here’s an example from 1990: Laventhol & Horwath, the nation’s seventh-largest accounting firm, filed for bankruptcy protection this week under the weight of lawsuits seeking damages for allegedly faulty audits.

When we entered the new millennium, the pace of firms disappearing picked up pace and has been in a rapid race ever since. I have a long list of firms I once knew and worked with that no longer exist.

Owners aged over the last 20 years and they wanted something for their years of hard work. They readily admitted (and moaned about it) – “We don’t have anyone who can replace us!” I heard this statement numerous times and my reply: “Whose fault is that?”

Read the quote again. Will your firm end because you haven’t developed people?

  • Every ending is a beginning. We just don't know it at the time.
  • Mitch Albom

Monday, August 10th, 2020

Learn More About M&A Trends

“Moving doesn’t change who you are. It only changes the view outside your window.” – Rachel Hollis

M&A is always a hot topic when you are talking with a group of CPAs. There are many aspects to M&A and each M&A opportunity is different from another.

This Wednesday, August 12th, Gary Adamson of Adamson Advisory will be conducting an informative webinar for CPA Leadership Institute about the CPA M&A landscape.

He will focus on the trends in valuations and the terms, and why the terms drive the multiples that we all hear so much about.

Learn more about the webinar here.

  • If you want to fly, you have to give up what weighs you down.
  • Roy T. Bennett

Tuesday, May 5th, 2020

Practice Management Webinars

“Losers live in the past. Winners learn from the past and enjoy working in the present toward the future.” – Denis Waitley

On May 6th and May 7th, Gary Adamson, President of Adamson Advisory will be hosting two webinars for CPA firm leaders. The sessions are sponsored by CPA Leadership Institute.

May 6th – Valuation is Driven by Terms of CPA Mergers – And Other Keys to Success

  • Date/Time: May 6, 2020 @ 1-1:50pm ET

During this session, you will receive an overview of the M&A frenzy in the profession today and give you tools to help you, whether you are a potential buyer or seller. Adamson will discuss the trends in valuations and the terms, and why the terms drive the multiples that we all hear about.

For more information and to register, click here.

  • May 7th – How to Maximize Performance of Best Practices in Partner Admission, Transition, and Buyout

Date/Time: May 7, 2020 @ 1-1:50pm ET

This session focuses on partner admission, transition and buyout. Adamson will discuss the 25 best practices in both admitting a new partner, buying out a parter and the transition issues associated with the buyout.

For more information and to register, click here.

  • Any fool can know. The point is to understand.
  • Albert Einstein

Friday, February 21st, 2020

Your Future Will Be Limited

I follow John C. Maxwell on Twitter. Yesterday, he posted the following tweet:

If you’re not identifying the leaders of tomorrow whom you will train up, your potential and your future will always be limited. 

It a simple, short message that speaks volumes to CPAs working in public accounting.  Owners of firms should have heeded this advice many years ago.

Here’s another recent tweet from Maxwell that hits home with CPAs:

No matter what it costs you, the return you receive will eclipse the price. Developing leaders is the most impacting and rewarding thing you can do as a leader.

Baby Boomer CPAs, nearing retirement, have been warned over and over again but few have acted upon the advice and now, their futures are limited. For some, it is merge-up or close-up.

  • Don't let what's uncertain be what defeats you. Instead, let it be what motivates you to keep reaching toward what's possible.
  • John C. Maxwell

Thursday, January 30th, 2020

If I Retire What Will I Do?

“Farming looks mighty easy when your plow is a pencil and you’re a thousand miles from the cornfield.” – Dwight D. Eisenhower

The Baby Boomer partners in accounting firms are facing a dilemma. The big question is what to do once they retire.

This challenge causes many to simply ignore retirement and just continue working. Many actually have a great fear of retiring. They picture retirement as spending time around the house and irritating their spouse. The spouses fear this, too! You can only play so much golf.

Because they have put in so many long hours at work during the last 35 years, they haven’t developed many hobbies or other interests outside of the CPA profession.

Stop and think about it. Most CPAs nearing retirement have been involved in numerous community and charitable organizations throughout their careers. They have become very interested in, and actually developed a great passion for, some of those organizations. Devoting time to causes you care about can be an opportunity for many productive years ahead.

WalterLynnJr.LR_-1-720x400I have a wonderful example. One of my former clients and a good friend, Walter Lynn merged his successful CPA practice into another firm a few years ago. While he did stay involved for the appropriate amount of time, he began furthering his strong interest in agriculture and ranching into a great passion – soil! Yes, soil and how the health of our country’s soil should be a greater concern to all of us.

He met numerous, high-profile researchers and experts and his involvement continued to grow and keep him busy doing something he thoroughly enjoyed.

Here’s what happened recently:

In response to an overwhelming demand for regenerative agriculture education and consulting services, Understanding Ag, LLC (UA), today announced the appointment of Walter Lynn, Jr. as its Chief Executive Officer.

Read the full press release here. I am so proud of Walter for taking on something that is so much bigger than grinding out his senior years in tax season after tax season. What are you going to do?

  • Let us not forget that the cultivation of the earth is the most important labor of man. When tillage begins, other arts will follow. The farmers, therefore, are the founders of civiliation.
  • Daniel Webster

Tuesday, December 3rd, 2019

My Ramblings About Mergers

“A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” – Colin Powell

You have observed it. In the last several years, many mid-size firms have merged-up into the Top 100 (the AICPA calls this group the Major Firms Group).

The firms in the Major Firm Group have also joined forces to form even larger CPA firms. It is an interesting time in the CPA profession. The big get bigger and many firms I have known and admired for years have disappeared.

An interesting statistic from the AICPA, almost 40% of the Major Firms Group from the year 2000, no longer exists.

This week’s announcement about Skoda Minotti joining Marcum brought all this to mind. Read the press release here. Marcum has had phenomenal growth and success under Jeffrey Weiner’s leadership.

So, mid-size firms are disappearing. However, mergers don’t always lead to a happy life once the honeymoon is over. A lot of the big mergers will result in spin-offs and smaller firms will form and thrive.

  • I always say, complacency is the kiss of death.
  • Shari Redstone

Friday, August 23rd, 2019

Flashback Friday – Mergers 2019

“A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” – Colin Powell

There are major changes ahead for M&A – read more here in this flashback post.

  • Work harder on yourself than you do on your job.
  • Jim Rohn

Wednesday, August 7th, 2019

Merging Up – Be Aware

“Beware of little expenses. A small leak will sink a great ship.” – Benjamin Franklin

As the title says, be aware. Maybe I should also add, beware!

It has always been in the back of your mind that when the time comes, you will fund your retirement by simply merging your firm “up” into a larger organization. After all, the M&A market for CPA firms has been very hot for several years. No need to worry because you have no one in your own firm that has the skills, ambition, and desire to buy you out.

Beware, because that is beginning to change dramatically. The larger firms are not so eager to acquire another compliance accounting firm. They are seeking to make their firm more diverse and to bring in companies offering complementary services such as technology consulting, technology security and data analytics.

Here’s an example from a firm I have always admired, LBMC in Nashville:

LMBC, a leading accounting and consulting firm in the US Southeast, has acquired Nashville-based Think Data Insights, a national data analytics company.

Click here to read the article.

  • Beware of false knowledge; it is more dangerous than ignorance.
  • George Bernard Shaw

Tuesday, June 11th, 2019

Merging Up? Get Ready For Some New Rules

“The measure of intelligence is the ability to change.” – Albert Einstein

Have your merged up? Are you considering merging up? Here’s something to think about and understand.

It comes from a post by @SkipPrichard about a book written by Kevin Kruse – Great Leaders Have No Rules: Contrarian Leadership Principles to Transform Your Team and Business. Read the reviews on the book. It might be one you should have on your summer reading list if you are a leader or aspire to be one.

Yes, this whole book came from a crazy Post-It Notes story. About 20 years ago I had sold my company and joined the new company as a partner, VP, and I reported to the CEO. He had me very excited and committed to the future of the new combined organization and how we would build it together. But then the CFO docked my first expense check by about four dollars. He told me they won’t reimburse my Post-It Notes because it was a wasteful expense. It was a rule—no Post It’s—that I didn’t know about. In that moment, that one rule, suddenly made it clear that this was “their” company, not mine. They were in control, not me.

Many practitioners have learned the hard way that a so-called merger is not what they thought a merger would be like. For the most part, I believe CPA firm mergers work out well. But, not always. Just be prepared for a new way of life.

  • Highly successful people take immediate action on almost every item they encounter.
  • Kevin Kruse,

Friday, May 3rd, 2019

An Opportunity Exists

“Your most unhappy customers are your greatest source of learning.” – Bill Gates

For many years CPAs working in small to mid-size firms have been delighted when a client of a big, national firm realized they were paying way too much for services that a smaller firm could provide in a more affordable manner and with more care and attention.

Sometimes the larger firms will actually refer certain clients to local and regional firms because they were just too small to fit the big firm’s profile. A too small client of a national firm is often a very large client for a local/regional firm.

This opportunity continues, but another opportunity has been created by the merger mania within the CPA profession.

When one of your local competitors merge-up, there will be clients who do not want to be part of the larger, acquiring firm. We usually see the departure of clients after the first tax season. The “new” firm just does not provide the same, intimate client relationship as the former firm. This is partly because their key contact is retiring and a new person has been introduced and partly because the larger firm has different methods and maybe those methods are just not as friendly and comfortable to the smaller firm clients.

Make sure that any client who is dissatisfied with their current firm knows about your firm – build your brand and reputation and be visible in your business community. Even more important, always be in tune with how your own clients feel about your service.

  • Spend a lot time talking to customers fact to face. You'd be amazed how many companies don't listen to their customers.
  • Ross Perot