Now that you are a qualified CPA with an established career, you are probably eager to take the next step and build a successful business. But if you have reached this point, you have a choice: buy an existing CPA practice or start your own business from scratch. Which one is right for you? Read on for an overview of the main points to consider.
Buying an Existing Accounting Firm
Buying an existing CPA firm has a lot of advantages. Because it is an existing business, it comes with clients, employees, and an established brand. You can hit the ground running and have a decent income from the moment the business is yours.
Many clients will stay with the business, even if the ownership changes. They already have an established relationship with the firm and unless all the employees leave, nothing will change for them.
You won’t need to worry about hiring staff and putting admin processes in place when you buy an established firm. All this has been sorted by the current owner. Employees will continue doing what they already do, and you can concentrate on the tasks that are important to you.
It’s a lot easier to get approved for financing when you buy an existing business, as there is less risk to the lender.
The downside of buying an existing firm is that there will be a learning curve while you get to grips with the way the business is organized and run. You also find that some employees elect to leave, or you need to terminate their contracts for various reasons. In addition, some clients may decide to move to a different firm, especially if the accountant they have a relationship with leaves.
If you are considering buying an established CPA firm, speak to a specialist like Poe Group Advisors.
Setting Up a New Firm
If you decide to start your own firm, you have the opportunity to set the business up in a way that works best for you, and you are in complete control. Whether the business thrives or dies will depend on your acumen and skills, which makes success a lot sweeter.
Although, creating a business from scratch comes with a lot of work. You need capital, first. A new business would need money to get off the ground. Then there’s the matter of setting up office space – you need to find a location; purchase desks, chairs, and boardroom tables in Brisbane (or elsewhere), among other essential physical items that you need to run your business; and integrate digital technology. Not to mention, you also need money to pay your employees and outsource any necessary work.
Another aspect of building a business from scratch is that you won’t have much of an income until you build a client base, and it can be a lot of hard work for the first few years until you have built a recognizable brand. There is also the chance that some clients you accept in the early days turn out to be difficult or a time sap, whereas as the owner of an established business, you can afford to be a lot pickier about the clients you accept.
As you can see, there are pros and cons of both routes. The more experience you have, the easier it will be to start a business from scratch, but if you lack business experience and dislike the idea of risk, it is sensible to buy an established business and put your own stamp on it.
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