The Most Wonderful Time of the Year – For M&A!

In just a few short weeks, firms that normally would be proactive in contacting our company nine months out of the year for succession advice will suddenly view us in a similar light as a 24 hour telemarketer trying to sell you a chia pet or Ginsu knife.

Doors that swung wide open for in-office visits complete with personalized welcome mats in June are largely double bolted with “no trespassing signs” targeted at consultants and other such non-preparers by mid-February. Until the end of April I would have better luck trying to get in and see the current occupant of the Oval Office than the owners of CPA firms neck deep in 1040s.

But such is the circle of life in public accounting.

Yet as counter-intuitive as it sounds, tax season may be the ideal time in which to close on a merger.

Sound crazy?

Read on. 

Here’s why. Although we may communicate with our clients via phone calls or emails on a weekly or perhaps even a daily basis, most of our clients are only seen in person once a year – and guess when that is?

Right. Tax season.

Therefore, if you’re able to close a deal prior to tax season, it enables a rapid client-successor firm introduction and eases, almost exponentially, the transition process. By contrast, if you close a deal in June you give many of your clients nearly a year to ponder what it means to them in terms of service, cost and travel and thus it increases the risk of losing said clients.

From a client retention perspective, this is the ideal time to get your merger done. It enables you to quickly show your clients the synergies gained via the merger and tempers their concerns over the loss of the original firm. Remember it’s never packaged as the loss of your firm but rather the gain of the successor.

Other huge benefits gleaned by a tax season merger include a peak cash flow period as well as having that much needed back up and support during the 1040 frenzy.

Another option may be to close on a merger just prior to tax season but make the union effective post April 15^th. This way it frees the merged firm from having to institute wholesale changes during busy season, but still allows them take advantage of this time of year to conduct a strong transition.

If you’ve begun laying the foundation for an affiliation or have questions, we’ll, help walk you through it. Although closing a deal literally at the doorstep of tax season may sound daunting initially, imagine all the extra resources you’ll have at your disposal at a time when you’ll really need them.