Whether you're a CPA starting a firm, an operations manager, or a managing partner looking at succession options, understanding what actually drives firm valuation in today's intense M&A market is critical.

In this episode of Growing Your Firm, host David Cristello sits down with Mike Payne, a veteran M&A consultant who has spent nearly two decades facilitating accounting firm mergers, acquisitions, and private equity investments. Mike pulls back the curtain on transactions ranging from $1M to over $100M to explain exactly how buyers evaluate practices and why the traditional metrics you read about are often just hearsay.

In this episode, we explore:

The Revenue vs. EBITDA Shift: Why the accounting world has fundamentally shifted from gross revenue multiples to Adjusted EBITDA valuations.
The Private Equity (PE) Reality: How the massive influx of outside capital is reshaping deal structures, increasing cash at the table, and forcing traditional firms to change.
The CAS and Tax Premium: Why a strong Client Accounting Services (CAS) department and recurring, sticky tax revenue can instantly add multiples to your firm's value.
The "Airport Test" for Culture: Why early-stage deal-making fails without alignment on culture, leadership, and operational tech stacks.
Stress-Testing Internal Succession: Real-world tactical advice for firm owners who want to successfully pass the baton to the next generation of junior partners.
The Fiercely Independent Path: Why selling isn't your only choice, and how to build a highly profitable, independent firm by playing defense against consolidation.

Key Benchmarks Mentioned:

Healthy Profitability: Why 30% to 35% bottom-line profit (pre-owner compensation) is the gold standard benchmark for an attractive firm.
Partner Billable Hours: The hidden red flag of high partner-level billable hours that can tank your valuation during due diligence.

Featured Guest: Mike Payne

How to Build and Sell a 2M CPA and Law Firm | Mike Payne

Growing Your Firm | Strategies for Accountants, CPA's, Bookkeepers , and Tax Professionals

How to Build and Sell a 2M CPA and Law Firm | Mike Payne