Time to Wake Up and Face North!

My father has this term he occasionally employs as sort of a rude wake-up call for those needing to get back to the real word.

He calls it “windshield reality.”

The roots of this axiom are predicated on the sobering image of crashing through the windshield of a car during a head-on collision. He used it on yours truly and my younger brother on a number of memorable occasions – most notably when I learned that I would not have a career in any professional sport and several years later when I applied to an Ivy League school only to receive my application back a week later marked “return to sender.”

But I digress.

After 18 months in my current capacity, I’ve come across more than a few CPA firm owners in desperate need of a dose of windshield reality.

I’ve often chronicled the lack of reality exhibited by a number of CPA firms, especially when it comes to facing succession issues. This week, I visited a 174-year-old owner of a firm (well, not 174 but you get the idea) who

steadfastly refuses to recognize that he has bubbling transition crisis on his hands (i.e. no one on the bench slotted to take over and no one promising enough on the horizon) yet still insists on continuing an ill-fated strategy of acquiring other firms.

So unless he hits the Powerball Jackpot by merging in a firm with young CPAs with good books of business, he’s a sure fire candidate not too far down the line to receive a much-needed dose of windshield reality.

Another example that I’ve run into far too frequently are smaller and under-resourced practices looking to become the successor to larger CPA firms.

Case in point: last week a buyer grossing $350K in annual revenues requested that I send him the summary sheet on a $1.5 million practice that just became available. Ditto for a $400K buyer client who said he wanted to look at firms grossing up to $1 million.

Excuse me?

Did they actually believe that the principals of a larger firm would even entertain thoughts of speaking with a practice roughly one-quarter their size? I’m sure there would be more than a few questions regarding the ability to receive their eventual buy-outs.

Again, two folks badly in need of windshield reality.

My last blog outlined the four C’s of any successful affiliation – chemistry, capacity, continuity and culture. At this point, I’d like to add a 5^th C to that – “Common” sense.

I’m continually amazed at how sometimes that fifth C is in such short supply.

This is perhaps why you can never have a surplus of windshield reality.