Valuing Intangible Assets During a Business Sale
When selling a business, you need a proper valuation to ensure that you receive a fair price for the years you have spent building your company. This will include valuing tangible assets such as your equipment, inventory, and real estate, as well as intangible assets such as goodwill and intellectual property. As challenging as it […]
How Do You Value a CPA or Accounting Practice?
Most CPA’s and Accountants have a general understanding that accounting practices are valued at one-times gross revenue. While the “average” selling price for a practice is near one-times gross revenue, this is only the average. Accounting and CPA practices typically sell between .75 and 1.5 of gross revenue. In order to properly price an accounting practice, […]
Strategies to Help Your Business Weather Inflation
As the US economy looks to put the Covid-19 pandemic behind it, another serious threat has been emerging inflation. In 2021, inflation totaled 6.7%, the highest level since the early 80s. Prices for some key items are up significantly more than the overall inflation rate. For example, energy prices were up 33.3% last year, the […]
Getting the Most for Your Accounting Practice
Accounting Practice and CPA Valuation vs Fair Market Value Every CPA and accounting practice for sale is different. In addition, each potential buyer of accounting practices enters the discussion with their own set of variables that hold importance in their business plan and to them personally. This is why the true definition of “Fair Market […]
How Much is My Business Worth
Most business owners reach a point when they want to move on to the next phase in their lives. At that point, the question “what is my business worth?” becomes of paramount importance. Even if they are not looking to sell right away, it is good to know the value when the time comes. Businesses […]
The Demand for Accounting Services
In today’s increasingly digital and mobile age, business trends are changing more rapidly than at any other time in history. Some services that appeared to be in a perpetual growth trajectory just a couple decades ago are now at or near the point of obsolescence. One prime example is the video rental business. The impact […]
CPA or Accounting Firm Valuation
When trying to find the worth of your business, remember there is no magic formula to “finding your accounting firm valuation in 5 minutes or less”. However, steps can be taken to help approximate the value of your business. Valuation of a business is derived from how much money your business will make in the […]
Why Large Accountancy Firms Carry Higher Valuation Multiples
I often get asked questions on valuation methodology for accountancy firms or CPA practices. There are many variables that get considered in a valuation, attrition averages, operating margins, cash flow margins, work quality, book demographics such as AGI, work complexity, and average age but the size of the firm (the gross recurring revenue) needs to […]
