According to Corporate Value Metrics, the value of a public company is 5 times greater than a privately held one. In the United States only 6200 businesses are publicly traded, which is far less than 1% of the 27 million that operate in the country (Forbes, July 2012). So why do virtually all US business owners lag so far behind public companies in building the value of their businesses? Given that 10,000 baby boomers are now retiring daily (many with businesses to sell), these ‘boomers’ could be in a vulnerable position if their business does not contain the value they are banking on for retirement.
Helping business owners build wealth and increase their value fits squarely in the wheelhouse of an owners ‘Most Trusted Business Advisor’, the CPA. In fact the expectation of most business owners would be that their CPA is going to help them make that happen, thus CPAs are in a solid position to assist in shaping the fortunes of small and midsize real estate and construction owners across the country. However, some CPAs have these capabilities and others may not.
When clients choose their accountant, they look for depth and expertise that allows them to receive advice, ideas, and solutions to their business that deliver the type of organizational impact that will drive wealth and create value. So often CPA firms position themselves as a generalist firm (serving dozens of industries) and they struggle to make a difference. CPAs who invest in Growing a Power Niche in the real estate and construction industry, for example, stack the deck in their favor to respond to growing numbers of business owners (aka Baby Boomers) who are searching for liquidity in their final business years. They are investing in their future and their clients’ future, through additional training for staff, development of a niche team inside their firm, and focusing, in some cases, 100% of their time working with industry clients.
You can shrink the value gap that exists when you:
- Understand and consult on the key risk areas for businesses (e.g. management, structure, strategy, systems and processes)
- Focus on delivering high value services to clients
- Build an industry team that brings more resources to clients
- Be a valuable partner in your clients’ personal and business success
Patrick Pruett ǀ President of The Rainmaker Alliances & Executive Vice President