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Who want to Merge (Accounting Practice)?

Updated: Dec 25, 2020

Let's start with the Objective -- Merge and Grow Big.


Then, Let’s continue with the "Why Not" …

Why mergers fail?

· Ego or the unwillingness of partners to adapt to new changes

· A poorly though out and communicated firm name

· Introduction of change too quickly can scare off staff and clients.

· Failing to have a succession plan, particularly for exiting partners

· Don’t have proper transition for staff

· Failure to integrate technology

· Impatience


But does that deter us to stop thinking about Merge & Grow ? No… So,


 

Why merge?


Based on statistics from MIA, more than 90% of accounting firms in Malaysia are sole proprietor practices. [June 2008, Accountants Today]

For non-audit firm, in year 2014. [won't be much different in 2020 or 20221]

· Key benefits

o Transition from Accounting to Advisory

o Capacity and competency to serve niche market

o Diversity of experiences from Partners to complement each other

o Career path for the staff / employees [Staff Retention]

o To enable both parties to tapping into wider market

>> Provision of Academy

>> Wealth Advisory

>> High-Value General Advisory

>> HR Consulting

>> IT Consulting

· Long term benefit

o Exit plan – be able to sell the "enlarged" practice at superb good price, must be an attractive brand at investment grade’s size.

· Small benefits

o Fill up empty office space?

o Spread technology costs?

o Utilise excess staff?

o Share Branding budge?

When to merge?

· Intended to grow fast

· Losing business opportunity due to current size or limitation.

· Losing clients or staff?




 

More issue to be considered....


How to value the firm?

· Billing

· Profit

· Weighted Average of Billing and Profit


Management and Driver of Grow

· Ownership

o Who to drive it?

o Control vs Ownership?

· Profit allocation

o Salary

o Profit sharing


Keen to merge?

Contact us Hello@CnpsAssociates.com or

https://wa.me/601131934955


P/s -- If Chong Accounting can't find candidate to merge, may be can be the intermediary for other firms to merge.


For Reading

What is your firm worth?

https://www.accountingweb.com/practice/growth/how-to-properly-value-your-cpa-firm


More information in MIA's website https://www.mia.org.my

Home / Professional Practices and Technical https://www.mia.org.my/v2/downloads/smp/roadmap/events/2016/06/02/merger/speakers/Coverage%20of%20Key%20Issues%20&%20Action%20Required%20by%20Dato'%20Jasani.pdf


Below are the documents available in MIA website, uploaded here for quick and easy reference.

2016 MIA M&A Coverage of Key Issues & Ac
.
Download • 1.23MB

2016 MIA M&A Enhancing Value of Practice
.
Download • 6.83MB

MIA M&A Pros and Cons
.pdf
Download PDF • 2.35MB

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