IAPA International Logo

Member Activity

Ask the Coach – June 2021

Q. My Partners Can’t Agree on Criteria for Acquiring other Firms

Our partnership has been approached by several retiring professional service providers who are looking for the best possible buyout for their firms lately – the conversations are getting “heated” for sure … Can you help?

A. This is not surprising since there is a large generation of retirees out there who have pushed up their retirement plans due to the Coronavirus Pandemic

Keep reading for some useful tips to consider so you can avoid common pitfalls:

Clientele Analysis is Important (Niche or Industry Segment) – It is important to know what kind of clients you are buying to ensure there is a good fit between experience / knowledge base of your professionals; expanding certain segments or service lines that already exist will help you build and expand your expertise and brand/reputation in this area. Processes and workflows should be easier to adopt when brining on new similar clients as well.  Note: Your “sweet spot” clients require three things:

1.  Experience in serving this type of client (the more the merrier)

2.  Desire and satisfaction (dare I say “joy”) when working with these types of clients

3.  Support by the marketplace for this industry (in other words, the future is bright for this type of client in your area).

Think Outside the Box on this Purchase – Nothing says you must buy the whole practice and all the clients – or, for that matter, all their current staff. 80% of something is better than 100% of nothing and honestly evaluating how many of the clients you will want to serve up front can change the parameters of the deal; consider buying the clients and staggering payment to sellers over time – and put staff on probation. After all, there are never any guarantees here – remember, no matter what contracts / agreements you have in place, the client can choose to do business with whomever they want.

Understand the Compensation Structure of the New Staff – Know who else is planning on retiring and when (staff and clients as well) and plan accordingly. Compare the billing structures and realization rates so that you can create as close as possible an “apples to apples” comparison of how the transition will go.

Explore the Technology – If there are different software systems, find out how easily they can be “bridged” into one another – be an open-minded here when analyzing these things so you can objectively assess which systems and other processes work best at which firm.  

Be Careful of Announcements – If there needs to be any kind of announcement (does there, really?) be careful as to how to make this change sound seamless to anyone who hears it. Most clients never pay attention  to who has signed their tax return – they are looking at their bottom line, remember. And it’s a best practice to always have someone else in line for communications, right?

Look at the Culture – An honest, open assessment of what works (and hasn’t) as well as keeping your finger on the pulse of an ever-changing work environment is key here – whether you are exploring acquisitions or not. Acquisitions require an innovative big-picture futuristic mindset. I realize that many shared personality traits for auditors and tax attorneys, etc. include being careful, guarded, and seeing the glass half-empty – resist the urge to curb your enthusiasm and try to see further down the road; be open to all the possibilities that this expansion can offer you and your partners – your whole firm. Remember, we live in a world of duality and there are pros and cons to literally ever situation – try to focus on the positive – you’ll have e better day, I assure you!

——————————————————————————————

If you have any questions about this content or would like to schedule a complimentary coaching session, please e-mail lisatierney@comcast.net Lisa Tierney, CLSC is a certified life strategies coach and a marketing strategist who has empowered professional service providers in the accounting and law professions for over twenty years. She is founder & President of TIERNEY Coaching & Consulting, Inc. which offers a unique and highly effective blend of traditional consulting in tandem with professional coaching to address all the nuances of success – including mind, body & spirit. The professionals who work with TIERNEY coaches enjoy increased self-confidence and higher self-esteem, adopt a more relaxed, yet authoritative demeanor, start asking power questions, treat their clients with a more consultative approach – and benefit from a natural growth in their practice or service area. They usually report a significant increase in their overall satisfaction of their professional experience.