If You Can’t Beat ‘Em…….

There’s an old story which tells of a youngster who sported a pretty decent pitching arm for his age and in sandlot games he regularly struck out the side.

More often than not his team won.

One day he came home obviously moping when his mother asked what was wrong.

He replied sheepishly – “I had a no hitter going until the big kids came home from school.”

I’m sure a lot of us have felt that way at one time or another – in an athletic contest or otherwise.

The same “bigger is better” logic could also be applied to CPA firms.

With quantum changes pending in the marketplace - particularly in technologies such as AI, blockchain and robotics which threaten to automate much of the Type 1 work  – the smaller firms may soon find themselves unable to compete with their larger counterparts in  terms of resources, platform of services and perhaps most of all – human capital.

This is not your father’s accounting firm, but it never ceases to amaze me how many firm owners still adhere to that antiquated strategy. You can run a firm in 2019 like you did in 1985 and those that do face a Sisyphean task in attempting to do so. The results are obvious – lost clients, no succession plan and an inability to mine new business.

So, as things go farther and farther south those firms often find themselves at an unpleasant crossroads – scramble to find a merger partner or soap the windows and padlock the door.

Conversely, they could proactively consider moving upstream and join forces with a larger firm – thereby “going big” in colloquial terms where they would avail themselves of the resources and niches that they currently can’t offer their clients.

Trouble is, too many owners are of the mindset that merging up is akin to a battlefield surrender whereas nothing could be further from the truth. In quick order following an upstream affiliation they would expose their clients to an expanded roster of services, free themselves from the burden of administration therefore allowing themselves to pursue new business development.

During our CPE courses we have a saying that “bigger isn’t necessarily better – better is better.”

And in many cases, that’s certainly true. But if you want to keep the no hitter going into the later innings it may be time to yield to another adage – “if you can’t beat ‘em join ‘em.