Curious about CPA firm owners
Right now I am toying with going the accounting route in hopes of one day starting my own CPA firm. I was just wondering if anyone knows the hours, pay, etc. of partners in small CPA firms. For example, at my university three big alumni donors (who donated buildings and more) were all partners or founding members at small CPA firms. But what are the odds of hitting it big like that?
Thanks.
The odds are slim as it takes years to build your firm's reputation/image which is everything in accounting. It wouldn't hurt if you had a large amount of business contacts that you could call on. I worked with a very successful smaller firm as an intern and it was pretty grueling. During busy season, we would work 70+ hours a week and we were turning work away. I will say that you will get a great exposure to several smaller in nature projects that you would never deal with in a larger firm. The main partner was very well respected and it seemed like he knew everyone. It was in a large city, too. He also specialized in valuation, which didn't hurt. He had already built one firm from the ground up already and sold it. If you do go this route, you'll probably be doing whatever work comes through the door at first and a lot of taxes. My firm was just in the beginning stages of audits b/c smaller businesses don't have the statutory need (unless they're maybe trying to get a loan) or cashflow for an external auditor. It's all about becoming big enough to land that first big client (an audit), bust ass, gain some notoriety and other large clients will follow. That's a very tricky transition, though, b/c you may not have the man power which means you have to hire more (taking more risk). We also did payroll, built financials, and ran the books for clients. Hope this helps.
My dad owns a successful CPA firm. He didn't buy the previous owner out till really late in his career(started at 50). I get the impression that the previous owners are very well off. They both started/took over the firm around the age of 30. If I had to estimate both partners probably made 200k salaries per year then whatever passthrough from the partnership for almost 25 years. Once you get a decent client base it can be lucrative. Unlike law, accounting firms generally keep most the same clients.
Like Genetic said you will mostly be performing compilations and reviews, tax returns(corps, s corps, 1040,1041, pships), tax planning, bookkeeping, valuations, and ad hoc projects. From what I have seen most smaller firms try to avoid audits. if they have clients that need/want audits they will do them but don't actively seek out new ones. Your biggest cost is going to be the payroll there is not much overhead so the margins are probably quite good.
Probably the best route would be when you are ready to strike out on your own is to find a firm whose owners are trying to get out/retire. It will cost you to buy them out but that way you are not starting from scratch and have some stream of revenue to build off. I think it really just depends on how good you are which will determine how far you take it.
This is all based on what I have seen from my dad who is located in a smaller city could be very different if you are in nyc or something.
Would you guys rather be a CFA firm owner, or work in Wealth Management? That is the essential question of life at this point...
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