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The Accounting Podcast
Modern Pricing Models Drive Higher Valuations for Accounting Firms
Apr 3, 2024
M&A advisor Charles Bedard discusses how subscription-based accounting firms command higher valuations than traditional ones, highlighting the importance of recurring revenue. He provides actionable tips for firm owners to increase their value and prepare for an exit, emphasizing strategies like aqua hire and strategic billing approaches.
31:08
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Quick takeaways
- Subscription-based firms have higher valuations due to recurring revenue attracting a broader buyer base.
- Modern digital CPA firms with subscription models can command higher valuations by aligning financial metrics with buyer preferences.
Deep dives
Subscription Firms vs. Traditional Firms: Valuation Differences
Subscription firms tend to have higher valuation multiples when compared to traditional firms due to their focus on recurring revenue. These subscription-based businesses attract multiple types of buyers beyond CPA firms, including private equity-backed firms and solution providers. This broader buyer base values the reliability of subscription revenue models, offering more buying options and potentially higher valuations.
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Discover
highlights
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