Episode 80

What Makes an Accounting Practice Valuable & Sellable?

In this insightful episode, Rob Brown delves into the world of accounting firm valuations and sales with Brannon Poe. They discuss the current trend of consolidation within the industry, driven by the influx of private equity money and the large number of accounting professionals nearing retirement age.

Brannon shares his expertise on the key factors that make an accounting practice valuable and sellable, including profitability, owner hours, location, and specialization.

The conversation explores the various types of buyers for accounting firms, such as individual buyers, private equity firms, and strategic acquisitions by other firms. 

Brannon emphasizes the importance of understanding a buyer's motivations and ensuring a good fit, as selling a firm involves more than just financial considerations – it's about preserving client relationships and taking care of staff.

In addition, he also offers practical advice for firm owners looking to maximize their firm's value before a sale, including purging unprofitable clients, raising prices, and focusing on specific service lines. He encourages accountants with an entrepreneurial spirit to consider starting their own niche boutique firm, as it can provide greater control over building a sellable asset.

Key Takeaways:

  • Location, profitability, and owner hours are crucial factors in determining an accounting firm's value and saleability.
  • Specialization and avoiding being a generalist firm increase efficiency and profitability, making a firm more attractive to buyers.
  • Understanding the motivations and fit of potential buyers (individual, private equity, or strategic acquisition) is essential for a successful sale.
  • Purging unprofitable clients, raising prices, and focusing on specific service lines can significantly increase a firm's value before a sale.
  • Starting a niche boutique firm can be a viable option for entrepreneurial accountants, allowing them to build a sellable asset tailored to their vision.

Quotes:

"If you've got low owner hours and high profitability, you're going to command a more premium price for your firm, and it's probably going to sell faster." - Brannon Poe

"If you're wired a certain way, you're going to do (DO WHAT?)it anyway. So just go ahead and do it sooner rather than later." - Brannon Poe

View this episode in video on YouTube here:

https://youtu.be/MZwyyxsbkUs

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The Accounting Influencers Podcast, hosted by Rob Brown, is one of the world's leading shows for accounting leaders, professionals, finance specialists, software vendors, tech providers and influencers. To participate in our international virtual speed networking events for the accounting community, book your place at the next gathering. Great for building your personal brand and making valuable industry connections in return for a small donation to charity: https://accountinginfluencers.com/events

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Thanks to our sponsors:

ADVANCETRACK OUTSOURCING. Transform your accounting firm with AdvanceTrack. Our top-tier offshoring solutions free your team from mundane tasks, allowing you to focus on growth and client engagement. Experience seamless scalability and expert support. Visit advancetrack.com and elevate your practice today. https://www.advancetrack.com

ACCOUNTEX. Bringing the accounting world together with UK and international events for the accounting and tech world. https://www.accountex.co.uk

If you'd like to sponsor the show and elevate your brand with our audience, reach out to show host Rob Brown on LinkedIn and his team will reach out to fix up a chat to explore.

https://www.linkedin.com/in/therobbrown

You can also check out all shows on the Accounting Influencers YouTube Channel:

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About the Podcast

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Accounting Voices Podcast
Accounting Voices helps people in the accounting world stay relevant visible and vocal. Host Rob Brown interprets trends reshaping the profession and gives listeners insight to build authority influence and a stronger voice in firms and markets.

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About your host

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Rob Brown

Rob Brown is the founder and host of the Accounting Voices Podcast, the flagship solo show of the Accounting Voices Network. Each episode offers sharp analysis and commentary on the trends, ideas and people shaping the global accounting profession.

Through this Accounting Voices Podcast, Rob helps accounting firm leaders, decision makers and professionals stay relevant and make sense of disruption in areas like AI, automation, M&A, private equity and soft skills beyond the tech. His perspective blends clarity, insight and curiosity, making complex issues relevant and practical for professionals and decision makers across accounting and finance.

He also leads two monthly panel shows, Accounting M&A and Accounting AI, which bring together senior voices to explore consolidation, strategy and the impact of technology on firms and people.

Rob is the author of the bestselling book Build Your Reputation (Wiley) and a TEDx speaker whose talk The Personal Brand of You has more than 400,000 views. Over his career he has hosted and moderated more than 1,000 conversations with accounting and fintech leaders worldwide.

Based in Nottingham UK, Rob is a stroke survivor living with epilepsy, a black belt in kickboxing, a decent chess player and an average player of four musical instruments.