Get your FREE 7 Pricing Essentials for CPAs and EAs here:https://geraldinecarter.com/7Waiting until you’re cooked to decide it’s time to sell your practice is a guaranteed way to fetch a low price for what you’ve spent a lifetime building. If you want to optimize the sale price of your business, it takes years of advance planning. Too many CPAs miss out on money they could have earned, had they known what steps to take and what to implement in order to fetch an attractive sale price. Here to talk with me today about how to set your CPA firm up to be highly attractive when you’re ready to sell it, is Allan Koltin. Allan is the CEO of Koltin Consulting Group. In addition to receiving countless awards, accolades, and recognition for his thought-leadership in the accounting profession, Allan has facilitated more than 150 M&A deals in the accounting profession over the past decade, including more than 50% of the largest M&A deals in the profession. We cover a lot of ground in the sales and acquisition of CPA firms: THERE ARE TWO KINDS OF DEALS: 1.Owners who are ready to off-ramp. They are wondering: Can they buy us out? Can they afford to? Do they want to buy us out? These are the types of deals where the owner is looking at winding down and wants to sell their asset, because they no longer want to own the business. 2. Strategic, due to technology. I think we’d be better off being acquired The best kind of M&A deal: 50 staff, no clients. WHAT NEEDS TO BE IN PLACE: Leadership - having the right people in place Rainmaking - you need to grow enough to provide a 5% wage increase Owning the client - being the trusted advisor Technical - do the work with quality Clients they can get. The buyer wants people. The buyer is wondering When it comes time to monetize the business, the acquirer is wondering, without the owner in place, can we keep everything going? Can we deliver that kind of service?You should be thinking about succession planning from the day you start. Plan 3 - 5 year before you are done, and use their talent to transition. Six months is not a long enough time to transition your firm. So busy being busy that they can sometimes avoid planning for the future. Bigger firms are looking to find more value in the firm that the seller is providing, in the form of untapped revenue in services the existing firm may not be offering: Type 1 Services - what clients don’t want but need - tax returns, audited financial statements Type 2 Services - what clients want and need - how to grow your business Type 3 Services - what clients want and need but you don’t provide it, so you partner with others who do FACTORS THAT IMPROVE SALE PRICE Market / location High EBITDA: $750 - $1M+ 7x - 7.5x the EBITDA, 10x would be off the charts 1 - 1.5x revenue, 2x would require a lot of things going your way “Good luck with that” if you have a low-margin firm SAFEST PATH Dollar amount at closing Stay on for 3 years is a great insurance policy for the buyer WHAT IF YOUR FIRM IS OFF HOURLY BILLING AND IS VALUE BILLING In the tech space with maintenance contracts are great Annuity work can be 3x greater, because you don’t have to find new clients all the time What would it take to go over 10x EBITDA? “You would have to have something so perfected in an industry or service line and you figured it out in your market and it was leaps and bounds ahead of anything anyone else was doing, and your buyer could take it national with their resources and capital, you could command in excess of 10x. It would have to be something pretty special.” Connect with Allan: Website: https://koltin.com/ [email protected] #allankoltin https://www.linkedin.com/in/allan-koltin-24a8181/ Want some help in your CPA firm, but not sure where to start? Schedule a free discovery call with me: https://calendly.com/geraldinecarter/15min Want to find out what options you might have for working together? More about 1:1 coaching, roadmaps, and DIY courses here: https://shethinksbigcoaching.com/coaching-options Get your FREE 7 Pricing Essentials for CPAs and EAs here:https://geraldinecarter.com/7

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