I had the pleasure this week of helping to host Mike Nall, who is the President of the Alliance of Merger & Acquisition Advisors (AM&AA), at our office in Nashville. Mike has grown his AM&AA group from 20 members to nearly one thousand since 1998 by focusing on his mission to connect companies to capital to create added value.
During our visit we had long discussions with Mike about the 300,000 business entities in the market looking for a buyer. Despite the enormous amount of capital available that is looking for opportunities, Mike tells us that 79 out of 80 deals don’t get done due to the shape the company is in when the owner is ready to sell. People with money just aren’t willing to part with it to pay business owners an often inflated price that the entrepreneur believes his company is worth.
This is a dilemma in the mid-market and Mike feels like CPAs are in the prime position to do something about it by helping these small and medium sized business owner get their house in order. Whether they decide to sell or pass on the business to the next generation, to be successful the management of the company needs to be sound.
Most accounting firms are working directly with these entrepreneurs who desperately need the help. It is imperative that as their CPAs you work to point them in the right direction. Have a look at your A and B clients and try to determine where their business is headed, brainstorm some ideas that may help, and then go visit them to unload your thoughts (and concerns if need be). Ask them questions about their goals for the business, what their plans are for retirement, and how they are developing leadership in the next generation of employees.
The CPAs ability to directly impact the economy of your community is terrific. These mid market companies are how this country’s economy was formed and grew to become the most powerful on earth. They hire most of the people, invest in most of the plant and equipment, and often are the ones that have the new, innovative ideas that are going to drive the economy forward. As a CPA, your role in this is critically important in helping them set up a management structure that will help them carry the business forward so that the people coming after them are able to reinvest in the economy of the community and move it forward.
If Mike’s role is connecting companies to capital, your role is connecting the companies’ capital to the right investment (e.g. products, systems, processes, people and equipment) that offer the greatest leverage.
The Rainmaker Companies