Firm growth: acquisition guidance to help you expand your business.

• Author: Fowler, Mark H.
• Position: Practicemanagement

from a growth perspective, acquisitions can provide a firm with a wider platform for broadening its areas of expertise, as well as its marketing and public relations capabilities. A combination of firms can be the result of either an acquisition or a merger. Though this article focuses on acquisitions, the information is applicable for mergers.

Larger clients may be attracted to the platform of a larger firm, which can be more interesting, too, for referral sources that work with larger clients. From a career development perspective, additional client needs and revenues create more opportunity for developing managers and principals into partners. And the injection of niche and specialized services from another firm can increase a firm's desirability with current and future clients.

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There are a number of reasons to choose the acquisition route: excess capacity and capability; need for additional offices and locations; expanded services and career development for new partners; a jump-start on revenue enhancement programs; and more. New players, new challenges and new clients do make a difference in your firm as it evolves. The benefits include operational, organizational and personal development.

Plan, Plan, Plan

Whether you're a sole practitioner or part of a multi-partner firm, it's imperative to create a dynamic strategic plan that is agreed upon by all key team members. If this is your first acquisition, or it's been a number of years since your last acquisition, consider getting some assistance with your plan from consultants, attorneys and other CPAs. CalCPA's Management of an Accounting Practice Committee has various resources and contacts available at www.calcpa.org/Answerline.

Keep the following in mind as you develop your plan:

* Map out criteria of your ideal acquisition--size, location, services, talent, industries served, etc.

* List what you and your firm will bring to the new arrangement, even if it's only funding or talent.

* Be realistic about how long the process takes. This is dependent upon many factors, including existing workload, upcoming or in-process tax season(s), seller's lease, seller's retirement, compensation discussions and more. The timeframe can range from several months to two years or more.

* Keep it simple, yet comprehensive. It's important to focus on both strategic and detailed tactical plans. What will this mean to our growth? What can we do to reach out to our clients and...