Portland, Ore. (Dec. 5, 2002) -- Business Transitions, the firm that created FP Transitions, the online forum for buying and selling independent financial planning practices, plans to do the same thing for CPAs with CPA Transitions.
"We saw that independent reps had no way to sell their book of business," said principal Bill Grable, who is also a CPA. "Our plan was to become business brokers for independent reps and ultimately do the same thing for CPAs and insurance firms because we saw the three industries converging. We're different than regular business brokers because we…work for both the buyer and the seller."
Here's how it works: sellers list their practice on the site by answering a number of questions, such as the demographics of their client base, where their practice is located, what percentage of their fees come from audit and compilation work, and their overhead percentages. Buyers may also post ads. Currently, listings are free.
CPA Transitions sends a blind email (the seller's name isn't disclosed) to all buyers in that geographic location. Interested buyers respond directly to the seller. The seller decides whether to respond based on the information supplied by the buyer. The seller's identity is only disclosed if they choose to meet with the buyer. If the deal goes through, CPA Transitions gets paid a 7 percent commission, split evenly between buyer and seller. CPA Transitions provides all of the contracts.
The company works with independent contractor Stewart Title, a national title and escrow company, which helps facilitate deals and holds money in escrow.
Grable estimated as many as 5,000 potential transactions involving independent CPA firms in any one year. He added that a substantial number of buyers on the FP Transitions Web site are financial planning practices that are interested in CPA practices and CPA firms that want to buy financial planning practices.
-- Melissa Klein
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