How To Buy An Accounting Practice
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- เผยแพร่เมื่อ 12 ก.ย. 2024
- There are many reasons to buy an accounting firm instead of investing your time in a startup cpa firm.
✅A pre-existing client base.
✅Trained employees, ready to work.
✅No pressure to immediately start closing sales.
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Hey Tyler, my name is Jelani. I'm currently coming out of the military as a 100% disabled veteran and a Logistics engineer my original (and current) profession. I'm in college to get my BA in logistics and then try to get a master's in whatever makes sense. I have an unbelievable amount of college credit from the military. Should I get my degree in accounting and get my CPA before I even think about purchasing a firm will l be able to invest? Thank you for the time man and keep up the great work.
Hey Jelani,
First, thank you for your service.
To answer your question, I am not a big believer of buying into an accounting firm with little to no practical experience, barring a very choice practice is available but they will be quite expensive (have a well trained staff as a part of the acquisition, typically sell for 2X rev)
I think it makes more sense to get the degree, get the experience, then open up shop and get your first 30-100K of business through your network/own efforts. This will help you know if you truly want to run a business or not.
If you do like it and want to keep doing it, then you have more leverage and cash flow to help finance the acquisition plus the technical skills and the designation that the market cares the most about (CPA).
Good luck to you and we need more awesome people in accounting like you!
Question. I am a data analyst. 28 considering a masters in accounting (bridge program) since my work is flexible. All this in order to eventually purchase a firm. My question is 2 fold. 1) how many years of experience should I have as a CPA before purchasing a firm. 2) is this beneficial financially? (Work pays for school so I’d only pay 7K out of pocket)
Another great video with accurate information, well done Tyler
Much appreciated Bruce! =)
Question for you. Do you think you would have been as successful as you are, or at the point where you are, if you didn't have a parent who was already in the industry?
Hey J T,
While I do believe we are masters of our own destiny, to claim that my parents didn't have an enormous impact on my would be ludicrous.
The same could be said of my grandfather and his impact on my father, who ran his own accounting firm as well, employing my father as his sales rep as my father did with me. We are all standing on the shoulders of giants in some way, shape, or form.
Their cumulative insights has been invaluable to me and certainly have contributed to my overall success but they didn't force me to listen, they didn't force me to be a part of their entrepreneurial journeys, and they didn't force me to go out on my own and further improve upon their beliefs and teachings. It's something I choose for myself.
Would I have been less successful without them? Undeniably so, but their impact was on my formative years, well before the advent of on demand education from world class trainers for free.
Now you can choose who to learn from whenever you want, whereas I only had access to them, so it's hard to say how things could have turned out differently without them and replacing their lessons with the litany of available coaches/mentors online, but I'm infinitely grateful to them and now get to supplant that base of familial knowledge with the knowledge of other experts I've never known.
TLDR: No, I wouldn't be as successful without them but if you supplanted their knowledge with some portion of the infinite knowledge at our fingertips today, who knows how things turn out?
@@DreamFirms Well said. Respect.
Is it 1x revenue or net profit ?
Revenues (typically) sometimes it's less but this is a good general number to base a practice valuation off of.
If there's a good staff in place and 30%+ profit margins, you can expect 2X/3X annual revenue (if PE is looking at it)
I need a broker that is not a scammer
Thanks for your comment! It's important to find a reliable broker when you're looking to buy an accounting practice. Be sure to do your research and ensure that they have a good track record. There are a lot of good ones out there.
@@DreamFirms who are the good ones?
@@leebstill I mention two good ones in the video, but Todd Steinberg is another one that I didn't mention.
Cc m