Right Merger Strategy

RedZone_StrategicOver the last 10 years, there has been an unprecedented number of small to medium-sized firms combining their practices with larger firms. More recently, these mergers have been an integral part of the firm’s long-term strategic approach, rather than as a remedy for short-term succession planning issues. The strategic approach to merging has added substantiation to what we have been observing in the marketplace—there is relentless pressure on leaders of small to medium-sized accounting firms to grow their firms in a very competitive market for new clients while simultaneously competing for limited quality staff.

Increasing pressure from larger firms with comprehensive service offerings and significant internal marketing and HR resources keeps partners at small and medium-sized firms awake at night. For many of these firms, the most effective strategy to retain their best clients and grow their practices is to partner with the right larger firm. However, many are unclear about that direction, culture changes, and control issues that come with this difficult decision.

There are a few important considerations in evaluating and determining the best firm to combine with:

  • Determining the strategic goals and objectives that have the best potential of maximizing revenues and profitability in the local marketplace and targeting firms that can make an immediate impact in achieving the intended results.
  • Obtaining valuable skills, competencies, expertise, and advisory capabilities to better service existing and prospective clients.
  • Adding financial stability to the long-term future of the firm.
  • Addressing succession planning issues, both in terms of firm leadership and transitioning of clients.
  • Achieving the best possible cultural match.
  • The availability of comprehensive resources for marketing, practice development, and lead generation to attain greater competitiveness and achieving higher levels of growth.
  • Obtaining the necessary HR resources needed for growth, succession, recruiting, retention, and staff development.

Developing a merger strategy to select the best firm to partner and combine with is crucial to a successful future. Determining the best criteria to achieve a successful merger is imperative to making the right decision at the right time.