And the difference between smaller firms and larger firms. By Marc Rosenberg Author of How to Bring in New Partners Maybe you’ve noticed this too: Many midsize and larger firms retire partners at one times annual fees or less, while smaller firms are often sold for well over that. How can you reconcile those two very different valuations? The answer, of course, is in the math. Here are the nine essential calculations…
Dealing with dysfunctional partners: The six-step process. By August Aquila Creating the Effective Partnership As much as you would like to, you cannot ignore them; nor can you accept them as they are. Doing that would be unfaithful to your core principles and ultimately cause more harm to the firm than any one of them is worth. That leaves us with three options: rehabilitate them, fire them or place them outside of the firm. But first, be sure it’s not you.
And the two methods used by the smartest firms. By Marc Rosenberg Author of How to Bring in New Partners Regardless of whether it is a corporation or a partnership, there is a substantial amount of accrual basis capital in a CPA firm. All the partners “own” some portion of that capital. There are at least three methods for determining how much capital each individual partner “owns.” One of them should be avoided like the plague.
Five issues that should never be part of the calculation. By Marc Rosenberg Author of How to Bring in New Partners Contrary to popular wisdom, the most successful CPA firms are finding that the fundamental and critical tactic in bringing in new partners begins with severing, as much as possible, the link between the ownership percentage and these five issues:
Today’s 5 essentials. When CPAs are invited into a firm’s partnership, their natural first question is, what’s in it for me? Marc Rosenberg, author of How to Bring in New Partners, reveals how the best firms are responding with five key deal points.
The old formulas don’t work anymore. By Marc Rosenberg Author of How to Bring in New Partners At one time, calculating and structuring the buy-in for a new CPA firm partner was fairly simple and uniform across the profession. But things have changed. Until recently, you’d start with the total value of the firm, defined as accrual basis capital, and then add goodwill, commonly expressed as a percentage of fees. So, let’s run the numbers and see why firms are looking for alternatives and what they’re finding. We’ll look at trends in personal risk profiles, ownership percentages, how the buy-in is paid, guarantees to banks, the number of years to pay the buy-in, who the buy-in is paid to, and last, but not least, sweat […]
Goals alone won’t won’t get you there. By Robert J. Lees and August J. Aquila Creating the Effective Partnership Many leaders believe that people remain focused and committed to their performance goals if the goals are clear and compelling. However, that’s not our experience with accounting firms. According to Franklin Covey’s “The 4 Disciplines of Execution: Achieving Your Wildly Important Goals,” team engagement and accountability are necessary to maintain commitment to goals and we are firmly in this camp.
By Marc Rosenberg CPA Firm Management & Governance No organization can flourish over the long term without effective communication among the leaders. CPA firms are no exception. Here are four signs your firm probably has good communication among partners: