Finding success when looking to grow through M&A is a multi-faceted affair, with the need for proven processes both before and after the acquisition, but nothing makes it all fall apart like buying the wrong firm.
Most owners that are new to acquiring CPA firms presume you’ve got to find targets with polished systems, documented processes and every operational challenge already solved.
While this is a solid approach, what drives our interest is a bit different.
Most successful firms were built by serving clients well, developing trusted relationships and building strong teams. When these assets exist, infrastructure can be built around them.
Potential matters far more to us than perfection.
Great People Matter Most
If there’s one area we consistently prioritize, it’s people.
Recruiting experienced accounting professionals has become increasingly difficult across our industry. When we meet a firm with talented team members who genuinely care about clients and coworkers, that’s a significant asset.
A strong team can accomplish even more when supported by better systems, expanded resources, specialized expertise, and clear career opportunities. We’ve seen employees thrive when they gain access to additional training, leadership support and the infrastructure needed to grow professionally.
The strongest firms are usually built on strong people.
Opportunity Within the Client Base
Revenue matters, but we’re equally interested in the opportunities that exist within a firm’s client base. Many successful CPA firms leave money on the table because they lack capacity to deliver more comprehensive services or they don’t have a system for optimizing their clients.
Some base-level questions to ask:
- Are there business owners?
- Are clients primarily receiving tax compliance services?
- Are proactive planning conversations occurring regularly?
- Are advisory opportunities being fully utilized?
A client with a tax prep only engagement is gold. We don’t see a low-value client, but the potential to deliver additional value through proactive tax planning and advisory services.
Client Segmentation Reveals a Lot
One of the first exercises we complete during due diligence is understanding the composition of the client base.
We want visibility into business owners versus individual client types, complexity, existing service models, advisory opportunities and long-term client value.
Segmentation helps us understand where additional value can be created, where service can improve, and where investments in people and infrastructure will have the greatest impact.
Aligning with the Seller’s Goals and Transition Timing
Every firm owner envisions something different for what comes next. Some want to retire right away. Others prefer to transition out over two or three years. And some are simply tired of the burden of ownership and want to focus solely on client work.
We look for sellers whose goals and timeline allow for a thoughtful transition. Client relationships are often decades in the making, so transferring that trust requires the seller to stay involved for a period of time.
I’m especially excited about the idea of a staged acquisition. Many owners assume an acquisition means handing over the keys immediately. In reality, owners can continue leading their team, maintaining client relationships, and preserving their culture while gaining the infrastructure of a larger firm. This setup solves their operational challenges immediately, freeing up bandwidth to focus on clients and people.
M&A Creates More Value, Together
Here’s a growth constraint that will sound painfully familiar to many of you.
You’ve got a queue of prospects ready to become clients, but you don’t have the capacity to sign them. When every major process, relationship, and decision runs through ownership, it gets harder to hire and there’s no time to build infrastructure when client work already fills the day.
One comment we hear constantly from firm owners: “I could sell new services all day long but I have no choice but to say no.”
Partnering with a larger firm through M&A bolts on additional resources, leadership support and operational infrastructure that restore the ability to say yes again to new clients, new services and new growth opportunities that once felt out of reach.
For us, acquisition is ultimately a value creation strategy as nothing creates more opportunity than scale.
This is why many owners find that growing alongside a strategic partner creates more long-term value than pursuing an immediate exit. Shared infrastructure and collective growth often produce outcomes difficult to achieve alone. Sometimes the greatest opportunity comes from building together, not on your own.
