Richard Wortmann describes his firm as a “Non-traditional, traditional firm.” He’s focused RW Group (his firm) on a specific specialty plus is a pioneer in how CPA and accounting firms can make acquisitions. These ideas could change how you grow your accounting practice. Richard started off in other, larger CPA firms and only started his practice in 2011. It’s grown rapidly with not only acquisitions but getting referrals. His best referral source?... His OLD firm! In this interview with workflow software founder and Grow Your Firm Podcast Host, David Cristello, Richard shares his ideas on new ways to grow your firm--- touching on:
- How to get referrals from other CPA firms
- Acquire other companies with 0% risk
- The signs you need to diversify
- RW Group LLC
- Jetpack interview on acquisitions with Rob Cameron
- Client Management software Richard uses
- Build out your network: Richard has been involved in many societies and his role as a peer reviewer allows him to meet many firm owners and build relationships.
- Backgrounds: Ask around about a firm before agreeing to partner.
- Base relationship on honesty and integrity: If you feel a referral is even slightly hinting about switching from the referral firm to yours, be 100% upfront and tell the referral firm what’s going on. What you might get is “Yes, we’ve been looking to not service that client anymore, this is great news."
>How Richard structures it --- Pay out 20% in the next 5 years for all cash collected from the book of business acquired.<<This way, the seller still has skin in the game and can be a mouthpiece for: Their old clients paying on time and staying with the buyer’s firm. With this approach, the first 5 years you will see little ROI, but no cash lost. If a client leaves, you get nothing and the seller gets nothing. Structured even better, if Richard’s firm is able to charge more in fees, the 20% over 5 years is only calculated on the fee structure per client at the time of the acquisition. In addition, Richard makes sure:
- There is no acquiring of staff (unless absolutely necessary) and definitely NO partners come over.
- Have about 30 days for clients to get acclimated and aware of the acquisition, then cut the cords with the past and start again (many of the acquired companies were strictly paper-based. Within 30 days, Richard flips them all to paperless.)
- Acquire as little as possible, all you want is the Book of Business.