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Most CPA Firms Never Make it to the Second Generation – Why?

Marc Rosenberg, CPA / November 5, 2018

The short answer is that CPA firms stink at succession planning.  Firms’ entire operations are geared to maximizing short-term profits, focusing on today at the expense of tomorrow.  Evidence of this is the following: A 60 year-old sole practitioner wants to sell her firm and work eight more years.  She has revenue of $1M and…

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Succession Planning: Views From A Luminary

Marc Rosenberg, CPA / September 24, 2018

A classic TV commercial showed two businessmen talking over drinks in a noisy, wood-paneled men’s club when one says: “My broker is Smith Barney and he says…”  All of a sudden, everyone in the club leans in to hear. The message:  When a wise person talks, shut up and listen. Advice from a luminary is…

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Partnership Offers: Questions Prospective Partners And Firms Should Answer

Marc Rosenberg, CPA / September 4, 2018

This post serves two purposes: Prospective partners should ask the basic questions below to help them judge whether they are making a smart decision in accepting a partnership offer. At the same time, the existing partner group should use the questions below as a checklist to help “get their house in order” before extending a…

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Signing A Partner Buyout Agreement: A Spectacular Investment for New Partners

Marc Rosenberg, CPA / August 14, 2018

Sounds counter-intuitive, doesn’t it?  How can assuming a significant debt obligation be a great investment?  Bear with me. For years, CPA firm partner retirement/buyout plans have been controversial.  Buyout plans have been around for decades, with trillions of dollars paid to retirees during that time.  It’s a practice that works.  So why is there controversy?…

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Partners: The Issues That Keep You Up Nights

Marc Rosenberg, CPA / July 23, 2018

CPAs seem to tend towards conservatism – they dislike change. Old school practices dominate and change is hard.  But change is inevitable.  Progressive firms will tell you they thrive on change.  They are eager to adopt new school practices.  Why not you? Here are some examples of old school vs. new school practices. Bringing in New…

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Are You A ‘Best In Class’ Firm?

Marc Rosenberg, CPA / July 2, 2018

I recently spoke at a BDO Alliance conference where the theme was identifying traits of high performing firms and their leaders.  One speaker used a bell curve to describe ‘best in class’ firms, with the majority of firms falling in the middle or “bell” part of the curve and a small percentage representing firms substantially…

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Is Your Partner Agreement Deficient? 16 Must-Have Provisions

Marc Rosenberg, CPA / June 11, 2018

Properly written partner agreements contain more than 200 provisions, all important. We have reviewed hundreds of partner agreements and helped firms create or revise several dozen, and based on this experience, I’ve identified what I consider the 16 most critical provisions in CPA firm partner agreements.  The items are not listed in order of importance. …

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Beware of LUBRM: Why Is it Misleading?

Marc Rosenberg, CPA / May 28, 2018

Read David Maister’s Managing The Professional Service Firm. This is the first piece of advice I give to new managing partners and aspiring consultants.  Maister retired in 2009, but is considered the country’s most respected and go-to source EVER on managing professional service firms. With that build-up, I’m now going to be sacrilegious and dispute…

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What A Great Succession Plan Looks Like

Marc Rosenberg, CPA / May 14, 2018

The most stunning statistic today in the CPA industry is this:  80% of first generation firms never make it to the second.  Why?  They have non-existent or ineffective succession plans. What’s the one key element to a great succession plan? Effective practice management. It creates a vision that provides for the development of great people who advance…

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Acquiring Business Development Skills Critical to Succession Planning

Marc Rosenberg, CPA / April 24, 2018

CPA firms are in the midst of a succession planning crisis that will continue until the retirement of Baby Boomers joins Y2K and other issues on the ash heap of history.  A paltry 20% of first generation CPA firms make it to the second.  The primary roadblock: ineffective or non-existent succession planning and leadership development….

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