If you haven’t noticed, the biggest CPA businesses have been getting even bigger over the past decade. There’s been significant consolidation, with larger practices acquiring small independent CPAs, and the trend appears to be continuing for the foreseeable future.
It’s no big surprise. The old saying that “two can live as cheaply as one” also applies to CPA practices. Consolidation through mergers and acquisitions allows CPAs to cut the cost of doing business by combining technology, support staff, marketing and other overhead costs. Business combinations often make it easier to provide more services to existing clients, whether by adding new services or a partner with specialized expertise.
If you’re committed to staying independent, you need to perform a serious analysis of your practice’s strengths and weaknesses. After all, you’re facing increased competition from all those larger practices. You may want to seek opportunities to build referral partnerships with noncompeting CPAs in your market, or choose to focus on a business niche that others have neglected.
At the very least, it’s time to sit down with your trusted advisors and sketch out a plan for the next few years of your business. Some people may assume that only a start-up needs to create a business plan, but these plans also provide an excellent opportunity to stop and take stock of where your business is in its life cycle, where you hope to be, and how to connect the two.