Buying vs. Building an Accounting Firm

My Approach Doing It Over

Author

Luke Templin
June 05, 2024

Read Time: 3:45 minutes

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In the last issue, we discussed building an accounting firm. In this issue, we will discuss what I would do if I started over.

I built my consulting firm from scratch. One of the main reasons I did this was that I had built up my client base before going out alone. The last accounting firm I worked for had no non-solicitation or non-compete.

I built relationships with four of the six clients I started my firm with. I had conversations with the four before making my leap. And I waited until I put my notice in before discussing the other two with the partners who owned the relationships. Both partners recommended their clients continue working with me.

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Having clients before leaping is a game changer, but it might only be doable in a few situations. I recommend reviewing your employment contract to see what you can and cannot do.

If your contract prohibits side work or taking clients, I'd consider having an open and honest conversation with the owners. Many firm owners have navigated similar waters and might be open to an equitable arrangement.

Alternatively, a laid-back private accounting job that allows side work. Building a client base with a stable paycheck will smooth your journey to owning an accounting firm.

Consider setting aside cash while building your client base. I set aside six months' worth of salary before making my leap.

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One drawback of my initial approach was slower growth than anticipated. Reflecting on this, there are two strategies I would prioritize if I were starting over—and I'm still considering these today.

The first strategy is bringing on a partner. I contemplated this initially but struggled to find someone with the complementary skill set I needed—particularly someone passionate about operations. A partner with opposite strengths could balance the business and drive faster growth.

The second strategy is attracting an investor. An investor could provide the capital needed to hire more staff, accelerating the process of elevating and delegating tasks. While investor capital involves less personal risk than debt, it comes with the pressure to perform. However, a well-chosen investor could offer invaluable coaching and referrals, benefits that traditional debt financing cannot provide.

If I were to begin again, I would take a more strategic approach, considering partnerships and investors to accelerate growth. Each path has its unique challenges and rewards, and there isn't a one-size-fits-all answer.

Whether you build from scratch, buy an existing firm, bring on a partner, or secure investment, the key is to find what aligns best with your professional goals and personal strengths. Reflect on your circumstances and preferences to determine your best course of action.

Ultimately, building or buying an accounting firm is deeply personal. Use these insights as a guide, but trust yourself to forge the right path.

Thanks for reading, Luke Templin!

P.S. There are two ways I can help you grow your CAS offerings when you are ready: