buyng a practice

darena - above you referred to me as he. I am she, just FYI. Jessica

I'm glad I didn't have to do it b/c it is not my thing at all....but you must have gained experience from somewhere, right? Can you go to lunch with your former boss? Ask for the offloads, ask for introductions to other older CPAs?

I agree with above - do not compete on price! It is short-term gain, maybe, for long-term pain. I remember the very first invoice I sent after going out on my own. It was for $660. It took me 3 days to send it off! I was sure that people were going to freak. No one freaked. If you do not value yourself, no one else will either.

Also...In the previous partnership, there was not enough work to keep me fully employed at first. I did some per diem work for other firms for a couple of years. I swallowed my pride but managed to pay my bills. Something like that might bridge the gap.

Have you become involved with any Chambers to meet people and develop their trust? That is one of the best methods of networking and gaining the crucial trust without dealing with the upsell nonsense of BNI. Being involved with Chambers has helped me A LOT, particularly as I started focusing on moving into Michigan.

You never said where in California you're located. Regardless, your clients are going to be within a certain radius of your location so get out and be seen, too. The more people see you, the likelier they are to remember you. I think the rule of thumb is someone needs to see you and hear your name like 7-8 times before they even remember you. Get out, be present, be seen, engage in discussions (even when you do not want to chat), do not be a hard seller but make it clear what you do and your ideal clients. I now walk down the street and into various businesses in Michigan, for example, and people know who I am, or they've seen me enough that their curiosity makes them stop me and ask questions. All of my growth is organic, it is controlled, and it is manageable.

The owner of a firm called me yesterday asking if I wanted to buy his entire company. It is just too large of a purchase and with the state of the profession, I think you are better off spending money on effort than a book of business where you WILL inevitably lose some of those clients. And no seller really wants to tie payout to retention because they have on idea how you will be for their clients. In 2021, I did attempt to buy a smaller firm--about $350k gross--and we could not agree on terms. A larger but still small firm came in, quickly bought up the practice, did little due diligence, and it has proven to be a disaster--they did not communicate anything to clients, many clients were not extended last year, and they have lost a ton of clients (and I have gained some of them).

A while back, yes, buying a practice would be a great way to jumpstart things. Since COVID, though, and aging out of practitioners, my opinion is spend that $35k in networking and building trust. Call financial advisors, lawyers, bank managers, etc., as they are all excellent (generally speaking) sources of referrals. Take them to lunch or for a drink or two after work.

Others have said it, I will repeat it--when you are starting out, you will want to accept basically any client that comes your way. Don't. Identify your ideal client and stick to it, otherwise you will end up at capacity with lousy clients and you will end up shedding them and effectively starting over. As JAD stated, never compete on price. Compete on what you can do for the client in an efficient manner.

I think it's a little disingenuous to believe that anyone can just throw up a nice website and have enough client revenue to replace their F/T job within a year or two. We are dealing with people's sensitive information and as such they need to get to know you, like you and trust you. That takes time organically which is why some people opt to buy a practice.

I agree. If you put doing a good job first and have the skills, you gain people's trust and you'll receive referrals, often without asking for them. I had 10 years of work experience at a CPA firm before embarking on my own with 20 clients. I became a BNI member and gained more clients. After about 5 years, I left BNI, a bit nervous about how my biz would fare. It did fine. A job well done is the best advertisement. Good clients refer you to others you'll like working with because people usually hang out with people who are like them.

darena - above you referred to me as he. I am she, just FYI. Jessica

I'm glad I didn't have to do it b/c it is not my thing at all....but you must have gained experience from somewhere, right? Can you go to lunch with your former boss? Ask for the offloads, ask for introductions to other older CPAs?

I agree with above - do not compete on price! It is short-term gain, maybe, for long-term pain. I remember the very first invoice I sent after going out on my own. It was for $660. It took me 3 days to send it off! I was sure that people were going to freak. No one freaked. If you do not value yourself, no one else will either.

Also...In the previous partnership, there was not enough work to keep me fully employed at first. I did some per diem work for other firms for a couple of years. I swallowed my pride but managed to pay my bills. Something like that might bridge the gap.

This is interesting and I wonder if most people start out just trying to build their practice up from a side hustle. Going from a F/T job to buying a practice is usually a tricky thing because you're going from steady work (likely w/ benefits) to uncertainty. Also, if you buy a practice it must be large enough not only to compensate you for your salary but also your benefits AND the hiring of staff, even if just a P/T person. How do people do that?

Also, it would seem to be most sensible to hire someone from the previous person's staff because, for lack of better words, they know where the bodies are buried.

The brokers who regularly advertise practices seem to mainly have practices available that do not embrace technology or the client base, or type of returns done, is not ideal. Add to the mix that sellers seem to be quite picky with who they decide to sell to.

The initial year(s) are the most interesting to me and I like hearing how people start out, what they had to sacrifice and whether had to do additional jobs while the practice developed.

Darena67, I PM'ed you. I mostly do financials and I would love to hand off some tax work.