Tuesday, November 28, 2017

I know this may sound crazy…

In observance of daylight savings time and the Thanksgiving holiday, I am officially setting my scales back 10 pounds. After Thursday and a traditional Italian gravy meat feast two day later, I can say with all certainty that Sports Illustrated will not be contacting me for their annual swimsuit edition.

The annual gobble-fest also marks what I like to call the final lap of our M&A season, as our deals in progress try and close out prior to the onset of a new and grueling tax season.

Many of our clients often assume the look of a contestant who is stumped on Final Jeopardy when I explain to them that the period leading up to 1040 filings is often our busiest of the year.

And on the surface it does sound counter-intuitive. Why would anyone want to place the added burden of completing a merger on top of all the season-related issues – i.e. extra staff, new regulations, software license renewals etc.?

But consider this.

Friday, November 17, 2017

Good “Buy” To You

Over the summer those who sign my paychecks enrolled me in a seven-week sales training course that purported to take a different approach to the art of selling.

I won’t regale you with all the details of the curriculum, save for a few items. For one, their pre-qualifying process was a far deeper dive than many of us were taught. Another point of differentiation is that the actual sales pitch comes at the end – not the beginning.

The jury is still out and will be in terms of my final deal numbers as to whether it was a good investment, but if anything I have been far more capable in being able to distinguish serious merger candidates from the proverbial “tire kickers.”

Even I know those interested in accounting firm M&A should not fall into the same category as a family of four debating whether to purchase a new SUV. The latter will go from lot to lot, sit for the sales pitches and then determine whether it’s in their budget.

Firms – either on the buyer or seller side should be far more focused on what they want to do.

Seller firms I allow a little more leeway on ambivalence. It’s a big decision – probably the biggest business-related decision of their lives. So naturally there’s bound to be more than a tinge of caution or even uncertainty. Buyers should be far more decided. But it’s amazing just how many are not.

Case in point.

Tuesday, November 14, 2017

When all said and done, it’s a phone!

In the classic 1970s sitcom, “The Bob Newhart Show,” the star of the series plays a Chicago-based psychologist who shares an office floor with a number of other medical and dental professionals.

When the communal coffee maker breaks down he instructs the office assistant, a ditsy six-foot red head named Carol, to order a new one. Later, when he asks her how the replacement process is going, she replies that it’s hard to decide on which model to purchase since all most of them do is make coffee.

Somewhat perplexed, Bob asks isn’t that the eventual purpose of a coffee-maker?

I recalled this long-ago forgotten vignette while watching the news a few weeks back and an on-the-street reporter was interviewing people waiting on a snaking line, many of whom I later learned had camped out the night before.

Were they waiting for Springsteen tickets?

Front row for Foo Fighters?

$50 orchestra seats to “Hamilton?”

None of the above.

Friday, November 10, 2017

Time after Time

You remember when many of you were raising children and warned them against performing certain safety-defying acts – such as not touching a hot stove?

And then think back of how many times they ignored you and decided on a live demonstration. Many tears, Band-Aids and salve applications later they got the message. Hopefully they didn’t need to learn that lesson twice.

Funny how often the same stubborn principles often apply to grownups. Not that many adults would purposely hold their hand on a white-hot burner, but rather they display their obstinance in other areas.

Take for example inertia.

It has been my experience that accountants can often lay claim to being the heavyweight champions of inertia – particularly when it comes to mergers.

Tuesday, November 7, 2017

Relaxing on the Job

Nearly 30 years ago, I began a job with a publishing company that was one of the last holdovers to have a designated smoking room. Basically it was a re-purposed conference space but for those employees who still smoked, it was a welcome alternative to having to go outside and light up – especially during the throes of a New York winter or during a raging thunderstorm.

Despite complaints from us tobacco-free folks that the second hand smoke was regularly wafting into the work area, the CEO (ironically a non-smoker himself) steadfastly refused to close it down.

Finally, someone complained to one of those workplace safety watchdogs and management was told to either padlock it or face a hefty fine. Since cost is always far easier to judge than policy, it was eventually cleaned out and the acoustic ceiling tiles which had turned an ugly shade of yellow from years of smoker abuse were mercifully replaced.

But that was then and this is now.

Friday, November 3, 2017

Know Your Limitations

Last week I was speaking with one of our clients in the New England region who was in the market to acquire a “tuck-in” practice – an industry term for a practice that can literally be tucked in to an existing firm without taking additional space.

And as luck would have it, a seller firm fitting his wish list description had come across my desk just the week before.

It was a two-partner firm within reasonable commuting distance, generating just over $1 million in revenue with each owner looking to slow down between three and five years.

On paper it looked to be what we proverbially refer to as the “round peg in the round hole.”

So when I attempted to arrange a meeting, the owner of the buyer firm said that he could only entertain meetings after the 10-15 deadline because he was “knee deep” (his term not mine) in returns.

On a scale of 1-10 with one being the worst, this was a response that at its most generous rated a 3.