Budding practice, but where next?

wrote

Sounds like you have it backwards. While there are valuable virtues to certain buyers of firms, no one is lining up to pay a buyer to take over a practice. Quite the contrary, the value lies in the clients to be bought (or not), and there is additional value in the transition (ie: the seller sticking around to help smooth the transition)

All my clients have a special place in my heart, even the PIA's (or the doc could be right about that ulcer). In any event, I've cultivated them, nurtured them, and kept the relationship, not only alive, but growing. It would pain me, not to mention be highly un-cool, to turn them over to someone that doesn't care about them much past the annual fee they can generate.

And, for most firms out there, it is a priviledge to be considered a potential buyer of their babies. You should act that way too. Get to know the potentially retiring CPA. He has to be confident that you'll do a good job for his clients. Remember, he has to sell you to his clients.

Paul -

Thanks for your thoughts. I see your point about the close ties to one's clients that have been around for years. And I completely understand that it's the relationship with the CPA (and his successor) that makes the practice valuable.

Where I think some older CPAs get off track is when they evaluate what a younger buyer brings. I've met CPAs who do little marketing (and have little growth), don't use computers with any proficiency, and are generally happy with running things as they've always been run. (I met one CPA who hand-wrote all his e-mails so his secretary could type them in and send them!)

I know that the key to a practice is top-line growth and not cost-saving measures, but for practitioners like this to insist they've got an asset I should be dying to buy is a bit optimistic. I see a practice that desparately needs a breath of life and a good house-cleaning. Not an asset without value by any stretch, but not one I'm going to pay a premium for.

wrote

So, they've over-valued their practice. That happens when there are emotions involved.

Then don't. Move on to another practice, or better yet, develop your own clients.

Better yet, maybe he should try to work for you. :)

a "book of business" is worth what some entity will pay for it...in "hard cash"...

Paul Thomas, CPA wrote: