- Tax services represent half of gross revenue, providing a clear and material recurring practice base.
- The firm generates $15 million of gross revenue, which is a meaningful scale for a five-partner practice.
- Billable hours total 75,000, indicating substantial annual production capacity across the firm.
- Audit and consulting each contribute 25% of revenue, showing a diversified mix beyond tax alone.
- The practice includes defined niches in real estate, professional services, M&D, HNW, and trusts & estates, which supports multiple service lines.
- EBOC of 40% indicates a relatively thin earnings margin on $15,000,000 of revenue, which can compress a buyer’s multiple.
- With 50% of revenue from tax work and only 25% from audit, the service mix is concentrated in a seasonally driven compliance practice that may merit a lower valuation than a more balanced book.
- The firm’s partner group is relatively small at 5 partners, creating key-person and transition risk because each partner represents $3,000,000 of revenue.
- Partner ages of 56 suggest succession planning will be important in the near term, which can affect retention and continuity during a transaction.
- Increase the share of audit and consulting work, which each represent 25% of revenue today, to improve service mix balance and support higher-value advisory growth alongside the 50% tax base.
- Expand capacity and leverage the 75,000 billable hours across 65 staff to drive more revenue per partner, which is currently 3.0 million, and improve operating scale.
- Deepen monetization of the firm’s specialized niches in real estate, professional services, M&D, HNW, and trusts and estates to reinforce differentiation and support pricing power.
- Strengthen succession and continuity planning given the partner group’s average age of 56 and only five partners, which can help protect valuation and reduce key-person risk.
- Improve margin conversion from the current 40% EBOC level by tightening delivery efficiency and mix toward higher-value services, which would enhance earnings quality.
- At 40% EBOC on $15.0 million of gross revenue, profitability appears solid but still leaves limited cushion if margins soften or compensation costs rise.
- With only 5 partners supporting 65 staff and $3.0 million of revenue per partner, the firm may face key-person and succession risk if partner capacity or retention weakens.
- The partner group is relatively concentrated at 5 partners, which can make ownership transition and client relationship continuity more sensitive to any partner departure or retirement.
- Revenue is split evenly across tax, audit, and consulting at 50%, 25%, and 25%, so the firm may be exposed to performance swings in any one service line rather than having a dominant recurring engine.
- The niche focus across real estate, professional services, M&D, HNW, and trusts and estates suggests a specialized positioning that may be harder to scale broadly than a more diversified practice mix.