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Value Comparison of Acquiring Fees vs.Investing in 10x
So you’re looking to grow your firm. In these times of economic uncertainty, it pays to weigh up all of the options before making a decision you may later regret.
This report examines three distinct options open to you, examining the pros and cons of each.
We will consider:
- Acquiring another accounting firm (or a block of fees)
- Acquiring or starting a financial planning division
- Bolting on a specialist business coaching division through the acquisition of a 10x franchise.
Clearly in reading this report you only get our bias but we hope that by the time you get to the end of the opinion, you’ll appreciate the different arguments and discussions put forward and that we’ve given you some more insights that will help you make the right choice to move your business to the next level. We also aim to provide you with some value that you can implement straight away, no matter where you are at with your growth plans.
We’ll start our discussion by taking a look at a position we have heard a lot of recently. There is a lot of merger and acquisition activity in the accounting industry currently with speculation that consolidation is about to be stepped up with a significant reduction in the number of firms over the next ten years. As a result, many firms are contemplating acquisition as a means to grow.
Before we get into our analysis of each alternative, let’s review the state of play in the profession.
Partners in many public accounting firms are making more money than they ever have before. Australia’s complex tax system and frequent changes to legislation continues to place increasing burden on small to medium sized businesses. The accountant, as the most trusted advisor, is the professional to whom business owners turn for help and advice. As such, accountants have an abundance of work. Servicing, rather than finding new work, is the challenge.
This started with the introduction of GST in Australia in 2000. As expected, this was – and continues to be – a goldmine for accounting firms. Unfortunately, it has taken eight years for the profession to realise that all that glistens is not gold, as many firms find themselves now more mired ...
