Choose Your Own Adventure: Investors or Independence

Geoffrey Brown, CAE President and CEO, Illinois CPA Society
Insights From Your President and CEO

Given the hyperfocus on mergers and acquisitions (M&A) and private equity (PE) investments driving growth and innovation across the industry, it may not always seem like there are other ways for certified public accounting (CPA) firms to keep up!

Traditional M&A activity has long been a foundational element of the business and a means for not only growth but also succession planning. Today, PE investments are creating similar opportunities for firms to accelerate their growth and position partners and emerging leaders for the future. However, taking a PE investment or pursuing a merger or acquisition may not be right for every CPA firm, and I want to say that’s OK.

My reminder to CPA firms that want to remain independent and focus on organic growth in today’s fast-consolidating landscape is that they need to be bold, strategic, and deeply intentional. They must put an inordinate amount of focus on firm governance, strategy, and technology.

Why?

Firms with sound governance retain talent and consistently deliver high-quality client experiences, which positions them for long-term, sustainable success. This creates a more attractive firm and a more attractive opportunity for the next generation of talent to step up and consider paths to leadership.

Firms that focus on strategy and their vision for the future are better equipped to capitalize on new trends, technologies, and adapt to market demands, which again helps ensure their sustainability and resilience. Maintaining a strategic mindset and focused vision unlocks innovation, drives effective resource allocation, and spurs investments that unlock growth potential.

Firms that embrace technology can’t get left behind. With technology transforming so quickly, nearly every aspect of how CPA firms operate is being impacted. Staying abreast of the latest developments and adapting to these changes is essential for firms to not only operate efficiently but also to remain competitive in today’s environment.

I hear from member firms daily that uncertainty about the future given our current economic environment gives them pause. Naturally in business, uncertainty about the future leads to instability and risk. In a profession like ours, where client and public trust are imperatives, the stakes feel even higher. What I can say to you is that it takes time and concerted effort to invest in good governance, develop a strategic roadmap, and embrace technology. These aren’t short-term initiatives; they’re long-term strategic steps that’ll be well worth the return on investment down the line. Most importantly, that concerted effort can preserve something that’s on the verge of becoming increasingly rare in our industry: independence.

Related Content:

• Eyes on the Prize: M&As, Leadership Changes Present Growth Opportunities: Merger and acquisition (M&A) activity among CPA firms has been on a wild run over the past few years. While these deals are often great for leaders at the top, what about the rest? Experienced M&A leaders offer suggestions on how staff can use these transitional changes to their advantage.
• The Hand of Private Equity in Accounting Firms: Private equity is reaching into the accounting world, but why—and what’s the trade-off for CPA firms?