247 Pros & Cons of Buying A Firm in 2024
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- Опубліковано 5 вер 2024
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At time 30:00, Patrick's comments about not retaining clients - when a family member sold his business, and we heard that the new owner's ability to 'connect' with existing clients was lacking, I took it as a lesson - if you ever buy a business, keep in mind "I can't buy the clients" because although my family member was fully paid when he sold the business, I wonder how the buyer felt about the fallout.
It seems like a big risk to buy a business when you're (A) buying it for its revenue, but (B) you actually can't fully predict how the revenue will stick around post-sale
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Patrick, congrats at getting back at the acquisitions! I just sent off about 1600 pieces of mail and I’m talking with four people right now. Nothing serious yet but dang acquisitions are attractive! From the outside! lol.
We bought one book last year and after that I thought I may be done… I guess not… lol
Which practice management system does Patrick use?
Canopy!
@@pdichter Thank you. I’m evaluating different systems to find which would work best for us. Overwhelmed with information.
Any old school firms are run by one person making 1 million or more in gross revenue, and hace one secretary and one or two low level accountants ...... would these be undesirable to buy?
If you did find a firm like that, you're just buying a job unless it's a super unique situation where the current owner still wants to do technical work but wants out of the "business owner" side of things. That kind of firm is going to have a MASSIVE amount of work and responsibility on one single point.
33mins
Patrick and/or Jason
Small firm owner I’m a small firm owner in SWFL. Wanted to get your feedback on your salary structures and/or production per person metrics.
Heard Patrick say 3.2mm with 35employees. So less than 100k in production per person.
Would love some feedback or dialogue on this and whether or not I’m burning my people out.
I know a firm that does $4.5 million and only has 6 accountants (including owner). And then 3 full time admin and 1 part time admin. And nobody is burnt out. Utilize technology to streamline and outsourcing for the bulk of the tedious work. It lacks organization and is messy but they are working on that. All firms are vastly different, but I think the traditional model is terrible.
You mentioned a manager has 30-40 clients being managed. How does that work and how much work is each client? If you have one client with 30 tax entities in the group, what is this considered? One client or 30 clients
We hire ahead a lot and most our staff accountants work 25-30 hours/week, so full time equivalent is probably closer to 30. Some guidelines that you should aim for : $100-150k revenue per FT employee, labor around 25-35% of revenue, and your team members earning in the upper 25% of the Robert Half survey. Production pay solves the burnout issue a lot because they get to choose if they want to take on more work, and if they do they make more money.
@@pdichter That’s helpful. Simple and makes total sense. I would be curious how you structure production pay. Is everyone eligible for production pay? Is that determined by hours worked, or by clients managed, or tax returns completed? My thoughts are to set aside 10% of net profits for bonuses, and the bonuses would be based on a few different metrics. But production pay has me curious.
Hi Patrick, what's your recruiting process like? I'm in Boston, labors are very expensive, we tried to hire remotely from other states but haven't had much success. Are you using recruiters? How do I make sure the new hires will be a good cultural fit?
This was the best marketing for PASBA that I've come across! I've been interested in this organization but haven't seen anything that has made me want to pull the trigger on becoming a member. Has anyone here had experience with PASBA? I'm interested in hearing your thoughts about it.
I joined in the fall, it opened my eyes and everyone is super open about sharing. Definitely recommend it.
Hey there! U on this thread because u r thinking about buying another firm like Patrick?
@@Freedom_folio already did, potentially another firm this year.
@@saadabbas3034 That's great to hear from a newly joined member. What has been the biggest change/help?
Will Patrick be offering partner role to anyone like a CPA?
Doubtful. I'd also argue our managers get most of the benefits partners do right away - they get a revenue share so they can make great income and don't have to buy in or play partner politics.
@@pdichter issue to many is how does this manager build something that he can take with him in case things change? Like why build something for someone else and not know of one day you will be fired?
@@MoetheCPA They don't build a book like a partner would. We handle all the sales, marketing, hiring, etc for them.
To Patrick: how do you navigate the CPA firm regulations in New Hampshire? Their website states that ownership has to be majority CPA. I am a CPA in Alabama and we have similar rules. Do you cease to operate as a CPA firm after acquisition? If so, how is that perceived by the client base and the general public? @pdichter