In our line of work, we get asked about value and valuations on a daily basis. It’s only natural CPA firm owners who have worked most of their adult lives to build up a profitable practice and are now ready to take a step back want to know what they can expect to be paid for their years of sweat equity.
The answer unfortunately isn’t always so simple – there are multiple factors that go into determining a fair valuation for a firm. It’s not a basic asset sale or service where you pay a set price and in return acquire a business or sign up for cable.
I realize this is a bit far afield from accounting, but I wanted to regale you with a value-oriented vignette regarding my local newspaper.
In full disclosure I’m a print newspaper junkie. I read two papers religiously with my morning coffee- my local paper and one of the New York-based tabloids. The newspaper closer to home keeps me up to date on what’s happening in terms of news, taxes, culture and education within my zip and area codes. But like many print businesses, it’s suffered at the hands of digital publishing in terms of readers and revenue.