Today's Features
MARKETING & SALES

Eleven Possible Pitfalls of Mergers

illustration of merger: four jigsaw puzzle pieces, each held by a different person's hand

What is driving the sale? Is your firm ready?

By August J. Aquila
Price It Right: How to Value Accounting Services

The trend for small and midsized CPA firms to merge is accelerating as the competitive environment becomes even more demanding. While hundreds of firms merge every year, history continually shows that at some point in the future, things don’t always work out. Like marriage, some mergers are successful while a great majority fail. Many of the reasons for failure can be avoided if firms do their homework at the front end before entering the merger.

MORE: Dodge the Four Curses of a Production Orientation | Clients Buy Solutions, Not Features | Make Sure You Know What You Will Get from Your Marketing | Three Pillars Support a Successful Accounting Firm | Clients Have Six Reasons for Needing You | Six Ways to Market Your Technology Consulting Practice | Sixteen Marketing Activities to Try | The Four Steps of Your Personal Marketing Process | How Does Your Firm Measure Up? | Six Questions Before Asking for All the Referrals You Deserve | Five Rules for a Marketing Orientation | Ten Keys to Marketing Success
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The merger and acquisition drivers are constantly changing. Some of the drivers we see today are a constantly changing marketplace, the creation of megafirms beyond the Big 4, the sophistication of clients, the high demand for qualified people, technology, the cost of acquiring new clients, and finally, the accounting industry being in a mature market.

As we will see, most mergers fail because of non-financial reasons. Unlike the sale of the manufacturing company, mergers of accounting firms are a lot more difficult to accomplish.
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MARKETING & SALES

Change Is Inevitable, Even in Marketing

Sometimes it’s improvement. Sometimes it isn’t. What role will you play?

By Bruce Marcus
Professional Services Marketing 3.0

EDITOR’S NOTE: CPA Trendlines was privileged to have a long relationship with Bruce W. Marcus, who was ahead of his time in his thinking and practice in marketing for accounting. We are publishing some of the late expert’s evergreen work, which retains wisdom for the present.

Speaking of change, as we have been, in the several months it took me to write my book and to choose from the hundreds – maybe thousands – of articles I’ve written over the years, a great deal has changed. And not just trivial stuff.

MORE: Do You Want More Publicity? Or BETTER Publicity? | How to Write Media Releases That Capture an Editor’s Attention | Why Accountants Should Be Nice to Journalists | Ten Keys to Crafting Ads | Four Things to Know About Social Media | Internal Communications Are Underrated | Four Things Better Than a Company Song | Let’s Lose the Word ‘Image’ | The Risk In Not Understanding Risk | What Your Marketing Program Can and Can’t Do | Nine Reasons That Prospects Say Yes | How Marketing Evolved to 3.0 | Accountants Don’t Sell Soap.
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The movement to replace the hourly billing with value billing has accelerated. Firm mergers, consolidations, new boutique firms that bear little resemblance to the historical professional firms, new technology that makes obsolete technology that was itself only months old. It seems that observations (I don’t make predictions) that I made decades ago about the need to go outside the firm for new sources of capital to finance growth have turned out to be accurate. New professional/marketers partnerships are springing up. Professional Services Marketing 3.0 is in full swing.
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MARKETING & SALES

Five Business Development Mistakes to Avoid

Businessman working on laptop with wall of symbols scribbled behind him

Don’t have a skill? Hire someone who does.

By Sandi Leyva
The Complete Guide to Marketing for Tax & Accounting Firms

If you’re a sole practitioner or small-firm operator, you’re probably very good at what you do – or you wouldn’t be in business today. But when it comes to marketing and selling yourself, well, many of us didn’t voluntarily sign up for that part.

MORE: Twelve Ways Your Business Card Can Hurt You | How to Use ChatGPT to Create Images | How to Leverage ChatGPT During This Crazy Tax Season | Got FOMO When It Comes to AI and ChatGPT? You Should: Here’s What You’re Missing | Create a Bad Website in Ten Easy Steps | Eight Steps to Getting Started with AI: A Guide for Tax Professionals | How to Weather Any Economic Storm | Leverage Your Strengths to Beat Stress
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As a matter of fact, some of us are resisting – kicking and screaming – marketing ourselves. So no wonder, for some of us, business is slow or not growing at the rate we’d like.
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ABOUT US

Bissett Bullet: The Mindset Curve

Today’s Bissett Bullet: “How long does it take for a technical professional such as an accountant to move out of their comfort zone and build business development habits?”

By Martin Bissett

As a rule – nine months. The journey begins with discomfort and bewilderment, but if you practice consistently then not only will you become used to proactively building your pipeline, you will reap the rewards and become eager to do more of the same.

Start by taking every opportunity to tell people the impact of what you do, on your clients. Reach out to them on LinkedIn, speak to them at events, post helpful content on social media. Positive feedback from prospective clients provides external validation, convinces you of your own value and helps you to ascend the mindset curve.

Today’s To-Do:

Start now. Find a space in your diary in the next two weeks, decide on a means to communicate with your target audience and schedule it in. Will you write a blog? Attend a networking event? Record a video with some top tips to post on your social media? The choice is yours.

See more Bissett Bullets here

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PRO Member Exclusive

Help! A Partner Wants to Retire Really Early

six shocked coworkers

How big should the buyout be?

By Marc Rosenberg
The Rosenberg Practice Management Library

Question from a reader: We didn’t contemplate an owner leaving before normal retirement age unless it was because of death or disability or we had to fire them. However, as we were discussing hypotheticals at a recent partner meeting, we came to the uncomfortable conclusion that, currently, there’s nothing to stop owners from accumulating large buyout balances and just walking in one day and offering up their resignation pursuant to our partner agreement, thus entitling them to receive substantial buyouts as long as they give us a one-year notice. Our vesting provision has a very limited penalty for early retirement: the buyout is reduced by 2 percent a year for every year before 60 they leave.

MORE: Thirteen Traits of Partners You’ll Want to Keep | Six Rules for Keeping Partners Happy and Productive | Five Ways to Separate Accounting Winners from Losers | Core Values: Why Your Firm Needs Them | Voting on Ownership Basis? Three Better Methods | Fifteen Big Questions for Your Next Strategy Session
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No matter what, we need to modify our agreement so that if someone wants to leave early, they can do so, but they must know there will be a stiff penalty. We don’t want our partners to see their vested buyouts as large savings accounts that can be withdrawn at any time. Instead, we want them to see our buyout as a true retirement plan, one that is redeemed close to or at a normal retirement age. My current thinking is that we restrict it in a similar way to an employer-funded retirement plan. The first day you can withdraw is the day you reach 55½, subject to vesting provisions and stiff penalties for early withdrawal. We think there should be a minimum number of years as a partner in order to receive any buyout.
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MANAGEMENT

Firm Not Thriving? Five Fixes

Plant seedlings growing out of coin stacks , both increasing in size

Taking steps “little and often” works, but you have to get started.

By Martin Bissett
Passport to Partnership

A big concern in recent years has been how the incoming partners will purchase equity or fund the capital account and exit of a retiring partner.

Much has been written that examines the mathematical complexities of this topic but the bottom line is simple. Would-be partners in the age demographic of 28-42 are part of a generation who are already heavily borrowed in the form of credit card debt, mortgage debt and other forms of personal loans.

MORE: Five Questions About Facing Challenges | The Real Math Behind the Sales Pipeline | Keep Business Development Going During Busy Season | Walk the Commitment Walk | Two Steps Toward Mastering Selling | Thirteen Ways to Show Commitment | Clients Can’t Grow without You | Seven Mistakes in Winning New Fees | How to Develop Your Communication Abilities | Five Questions for Measuring Partner Potential
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Their capacity to borrow in the current economy is extremely limited and it would appear that this will be the environment for the foreseeable future. In turn, banks’ willingness to lend has also been largely withdrawn in recent years.

This has produced a cash impasse that has forced partners to consider gifting equity, especially on the basis of time served in the firm. There is not scope within this piece to give full examination of best practice within this area except to highlight that 72 percent of partners surveyed highlighted that a senior manager’s ability to “buy in” to the firm and assume responsibility for funding the retirement plans of exiting partners was among their top three concerns about passing their practice on to existing employees.
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PRO Member Exclusive

AI Named the Highest-Paying In-Demand Tech Skill for 2024

Are your skills up to snuff? 

By Rick Richardson
Technology This Week

According to a January 2024 Deloitte study of 100 business executives, nearly half, or 45 percent, of high-level executives indicate they are aggressively upskilling and training their work force in artificial intelligence. Approximately the same percentage, 44 percent, state they are hiring for it.

MORE: AI Generates Revolutionary New Battery Design | ChatGPT Is Getting Humanlike Memory | Lenovo Readies New ThinkBook Laptop with a Transparent Display | Breakthrough Implant Uses Excess Blood Sugar to Generate Electricity | One State Is Now America’s Clean Energy Paradise | Microsoft Moves Further into Nuclear Development with New Director | Nuclear Battery Could Keep Your Future Phone Running for 50 Years | Did Ancient Romans Find a Solution for Climate Change? | Tack One Launches New Location Tracker for Children and Seniors
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Therefore, it should not be shocking that generative AI ranks first among the highest-paid IT skills. This is supported by a recent study from the job search firm Indeed, which determined that computer abilities have the largest impact on pay. According to Indeed, a job’s salary was 47 percent higher when generative AI was listed as a required talent.
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MANAGEMENT

Busy Season Is Over, So It’s Time for Some Resolutions

Twelve things to do before you get busy again.

EDITOR’S NOTE: The end of every busy season means a new beginning for practitioners, which is why we thought this Q-and-A was particularly timely.

By Ed Mendlowitz
202 Questions and Answers: Managing an Accounting Practice

Question: Do you have any suggestions for the New Year?

MORE: Hold Staff Accountable If You Want Them to Listen to You | When Selling a Firm to Staffers Is Tricky | Courting a Client? Don’t Give Too Much Away for Free | Nine Tips for a Healthier Tax Season | Fifteen Strategies for First-Time Supervisors | Measure Knowledge Gaps (Then Close Them) | Should You Offer Financial Services? | Ready to Retire? Selling Your Practice Is No Strategy | 20 Things You Need for a Business Valuation
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Answer: Checklist of things to do in the New Year:

  1. Stop marking SALY next to your New Year’s resolutions. Make one or two big-time life goals resolutions that you will do.
  2. Check your personal insurance coverage. Make sure you have adequate uninsured motorist, umbrella, workers compensation at your home and life insurance.

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