The predictions have come true. Interest in mid-market public accounting firms is hot! Outsiders, from distant CPA firms to private equity organizations, are peering in through the windows. And for the most part, these suitors like what they see.
If you plan to buck the trend and remain independent, what's it going to take to carve out a strategic future on your terms?
Driving growth through tech
For those who hope to resist M&A overtures, it's not just a matter of leaving money on the table. You'll need to take strategic steps that will allow you to remain independent. Among the most essential of these is investing in, and implementing, revenue-enhancing technology solutions.
Technology is eliminating the proprietary franchise on many of the services once held by individual CPA firms. Much of this work can today be performed by artificial intelligence, bots and other digital tools, and often not necessarily in accounting firms. With the potential of these technologies to significantly impact your services, what will your firm offer? What will be your unique value proposition? Will you stay market-relevant, independent and financially prosperous?
There is no shortage of naysayers who insist that merging with larger organizations is the only way to gain access to the innovation and plug-and-play resources you need to compete. I may be a lone voice in the wilderness here, but I see it differently. In my view, technology is the great leveler. Permit me to explain.
Not long ago, only the largest firms had access to data analytics, AI, bots, etc. In a relatively few years, however, the technology has become much more affordable for mid-level firms. And that's precisely why so many tech organizations are knocking at our doors. The technology is yours for the buying.
The question is, do you have the will, and the confidence in your ability to vet, acquire and deploy it? I believe you do, especially if you're open to learning, and to possibly engaging one of the qualified technology consultants in our space.
Consulting? Tech is essential
Another condition that underscores the critical role of tech for independent firms is the pivot to consulting services. Unfortunately, despite the need, many firms have not invested in data analytics, digital collaboration and other technologies that consulting requires. Instead, they have continued to focus mostly on driving efficiency, ignoring the potential for revenue through new client solutions.
I am familiar with many firms, including those I counsel, that have decided they will no longer lay hands on a 1040. They are actively pushing compliance work offshore or to a bot, focusing on honing specialized consulting offerings instead. The resulting strategic growth they've experienced has been highly profitable, efficient and sustainable.
Is a merger in the cards for your firm? Are you attracted to a vision of the future that includes ready capital, an expanded client base, a deeper talent pool, and a clear succession plan? The advantages are many. Remember, however, that in any market, remaining independent and masters of your own destiny can be an attractive and viable option. Many firms have done it, and yours could be one of them!
