Sector Consolidation – Business vs. Accounting

Sector Consolidation – Business vs. Accounting

Sector Consolidation - Business vs. Accounting

It’s no illusion that public accounting is experiencing unprecedented sector consolidation. But what is more nuanced is the major driver behind this heated M&A market, and it’s not what you might think.

Since taxes were invented, accountants have been great hustlers, striving to serve their clients with optimal efficacy and care. You have even become stigmatized as work-a-haulics (99% true), thus driving young people today away from the profession. But for small business owner accountants (under $5m in revenue), it has never really been about running a business – it has always been about adding more clients, increasing efficiencies, pricing, and maybe the scope of their offerings. This is typical – being an accountant with a mind for business.

Being a business-minded accountant is a completely different scenario, one which interchanges almost invariably with a business-minded professional with no accounting background who sees the accounting industry today as ripe with opportunity. This professional, whether they have an accounting background or not, sees accounting as a way to make money, and that is a fundamentally different nuance to an accountant who decides at some point “hey, I can probably do this far better on my own than I can working for Joe Shmo.”

Accounting is not unique as businesses go. Yes, it has its nuances, but all businesses do. Excellent client service, consistent cash-flow, underlying technology, information security, talent management, new, recurring, or project based business, stability concerns, growth prospecting, and firm politics… sound like you? Every business on the planet in every unique category is concerned with these same trends.

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This commonality underscores the opportunity that is at the heart of this newsletter. The accounting sector is ripe for change, and it is not only the accountants of tomorrow who will help bring it about, but also business savvy entrepreneurs, small and large cap private equity, and ancillary parties such as financial advisors and wealth managers who shape the sector’s tomorrow.

A surge of sellers means dynamic opportunity,

and we can’t wait to see what happens next!