So, you're considering a merger. No doubt you've considered a great many things about how two firms will become one.

You've studied P&Ls, assessed technology systems, and reviewed compensation strategy. You've vetted succession plans and even dined with the partners.

But how much have you learned about the other firm's approach to growth? Failure to understand their abilities can cause a promising relationship to dissolve in acrimony.

The antidote is action. If growth is a priority for your firm, I recommend that you ask five key questions to help you draw your own conclusions.

1. Is there a pipeline process? It's one thing to embrace the idea of growth. But you want to see a robust pipeline process, not just a list of outstanding proposals. By that I mean a regular review of all open and active opportunities, regardless of whether a proposal has been issued.

Look for a process that's driven by the managing partner but one that gets all partners engaged. The pipeline document should be succinct and well-organized, easily highlighting the largest opportunities. If a particular opportunity gets stuck in the pipeline, it's the job of the MP and the accountable partner to "un-stick" it.

2. Are there signs of innovation? Most accounting firms, likely including your own, derive most of their revenue from garden-variety audit and tax work. But a growth-oriented firm will also demonstrate some degree of innovation.

This can take many forms -- from a unique way of branding and packaging a service to an innovative use of technology or a creative billing method -- i.e., by the project, rather than hourly.

Innovation may not be easily visible, so you may have to ask for a list of recently added services. Are their core offerings long in the tooth? Is there a mentality of contin- ual innovation?

3. What's the process for building client relationships? An indicator that a firm is serious about growth is its way of developing client relationships. Is the firm pretty laissez-faire about this? For example, does the managing partner target an annual percentage of growth and leave the rest to the individual partners to figure out?

I prefer a collaborative approach in which firm partners sit down regularly with service line and industry leaders to strategize a growth plan for each significant client. All partners contribute ideas; think "our client" not "my client."

This is done by asking questions about the status of the relationship, what needs are being met or unmet, and how to close the gap. When this is done properly, the relationship transforms -- the CPA is no longer a service provider but a trusted advisor.

4. Is there a sustainable strategy for service and industry-specific growth? My growth model is built around three interlocking circles that represent the essential elements of strategic growth. These are services, channels of distribution and targeted buyer groups (for example, industries) that are most likely to purchase what you have to sell.

Whether or not the firm you're considering has a fully formed growth strategy is less important than being on the path.

5. Is anyone segmenting revenue? If a firm is serious about growth, it knows the source of its revenues. And the only reliable way to do that is via a process of revenue segmentation. It's best done by building a grid -- services down the left and industries or buyer groups across the top.

Segmenting in this way makes growth tangible and gives it a strategic direction. Once those sources are known, a firm can project growth targets and allocate resources.

If the firm tells you that its systems cannot generate this type of data, be concerned. You want a firm that will do whatever it takes -- including using a pencil and paper - to understand this essential information.

As you consider a firm for merger, don't forget to think about growth. Do your due diligence before saying "I do."

Gale Crosley, CPA, is founder and principal of Crosley+Co., providing revenue growth consulting and coaching to CPA firms. Reach her at

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