what forces are really driving firm sales—and what separates the sellable from the stagnant?
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accounting influencers
with rob brown
the great reshuffle in accounting is underway.
with three-quarters of the profession approaching retirement age and m&a activity reaching historic highs, many firm owners ask the same question: what’s my practice worth?
brannon poe, cpa, founder of poe group advisors, joins the accounting influencers to offer a rare, inside look at how deals are being made, what buyers are looking for, and how firm owners can prepare for a successful exit, whether it’s five weeks or five years away.
“most people come to us with two questions,” says poe. “how much is my firm worth? and how do i make it more marketable?”
the answer, poe says, isn’t found in a formula. it’s found in the firm’s habits.
“profitability tends to follow the owner,” poe explains. “we’ve seen owners buy a firm with 65% margins and pull it down to 40% just by managing it the way they always have. it’s not just the practice—it’s the person running it.”
owner hours, pricing discipline, service mix, and client selection all shape a firm’s value, poe notes. the firms that sell fastest and for the highest multiple have streamlined operations, solid margins, and minimal reliance on the principal to keep things running.
sensing inefficiencies in many cpa practices, private equity firms are entering the market with capital, data, and a focus on operational overhaul.
“they’re not here to maintain the status quo,” says poe. “they’re here to improve margins. that means they’ll make decisions based on numbers, not relationships. that’s a big shift in a people-driven profession like accounting.”
still, private equity isn’t the only buyer in the market. poe breaks down three core categories: individual buyers looking to branch out, other firms seeking strategic acquisitions, and pe firms with growth ambitions. the right fit, he says, depends on the seller’s goals—whether that’s a clean break, a staged transition, or an accelerated growth plan.
location still matters, poe cautions. firms in rural areas may struggle to find local buyers, especially if they serve a geographically bound client base. but that changes if the firm has gone digital.
“a virtual or cloud-based firm isn’t limited by geography,” poe explains. “that opens up a much larger buyer pool—and typically leads to a faster, more competitive sale.”
poe advises owners to focus on two fully within their control levers: owner hours and profitability.
“those are the metrics that drive price and buyer interest,” he says. “if you’ve got low owner hours and high profitability, your firm will be more attractive, plain and simple.”
he also urges firms to ditch the dead weight—specifically, low-fee clients. in many practices, the bottom 20 percent of clients account for only 2–3 percent of the revenue. “those are the first accounts that buyers will cut. you might as well beat them to it.”
in an era of rising specialization, firms attempting to do it all—tax, audit, bookkeeping, and advisory—without a supporting team often leave money on the table.
“dabbling is expensive,” poe says. “if you’re stretched too thin, you’re probably losing money somewhere.”
while private equity can offer multiple deal structures—including staged exits—owners looking to walk away quickly may be better off selling to individuals or firms that can absorb the practice immediately.
“start planning early,” poe advises. “three to five years ahead gives you time to make meaningful improvements that will show up in your financials—and that’s what banks and buyers will be looking at.”
for aspiring firm owners, poe sees opportunity on the horizon.
“if you’ve got the entrepreneurial mindset, do it,” he says. “build a lean, cloud-first firm with strong pricing and a clear niche, and you’ll not only enjoy running it—you’ll be able to sell it for a premium down the road.”
when asked to look five or ten years into the future, poe predicts continued disruption—driven by consolidation, private equity, and technology—but remains optimistic.
“this is still a great industry,” he says. “there’s high demand for our services. ai will take away the rote work, but the firms that focus on advisory and build real relationships will thrive.”
9 key takeaways
- firm profitability, efficiency, and saleability are heavily influenced by the owner’s habits, especially regarding pricing, team management, and time spent in the business.
- pe firms see accounting as ripe for operational improvement and margin growth. they bring capital and data but make decisions based on numbers, not relationships, which causes concern among owners focused on client care and team culture.
- firms in small towns may struggle to find buyers. however, going virtual expands the buyer pool and improves marketability.
- generalist firms with too many service lines and insufficient depth tend to lose efficiency and profitability. niching down improves both performance and sale value.
- low owner involvement and high margins are the two most important metrics for firm valuation. these directly influence buyer interest and financing options.
- the bottom 20 percent of clients typically contribute just 2–3 percent of revenue and drag down profits. cutting or re-pricing them improves firm health and makes the practice more appealing to buyers.
- firms that prepare early—by boosting performance and cleaning up inefficiencies—command higher prices and attract better buyers. waiting until the last minute often limits options.
- many firm owners prioritize legacy, team care, and client continuity over maximum payout. in some cases, they accept a lower offer from a trusted buyer.
- multiple types of buyers exist and can include:
- private equity firms (often for growth and transformation);
- individual cpas (typically with 5-15 years’ experience, looking to own); and
- other firms (seeking strategic acquisitions).
the best buyer depends on your exit goals—whether you want a fast sale, growth capital, or a gradual transition.