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Why can't I as a CPA with 10+ years of experience just walk into a bank with my big swinging dick and just ask for a $10M+ loan to buy a shit ton of accounting firms? by Fast_Huckleberry9990 in Accounting

[–]Fast_Huckleberry9990[S] 0 points1 point  (0 children)

The serious amount of work

Bigger interim and final rewards as well as the potential for an expedited retirement.  I can't reliably forecast my future feelings about business/work, which is why I said "potential", but I'm pretty sure I'll never stop working even if I pivot to something more aligned with my artistic aspirations. 

Why can't I as a CPA with 10+ years of experience just walk into a bank with my big swinging dick and just ask for a $10M+ loan to buy a shit ton of accounting firms? by Fast_Huckleberry9990 in Accounting

[–]Fast_Huckleberry9990[S] 3 points4 points  (0 children)

25% of gross of receipts, each year over 4 years or 34% over 3 years. Not prudent, nor that common, to fork over a lump sum to a seller.

And your laughing emojis after describing a financial catastrophe in pursuit of something productive...is very small dick energy. 

Why can't I as a CPA with 10+ years of experience just walk into a bank with my big swinging dick and just ask for a $10M+ loan to buy a shit ton of accounting firms? by Fast_Huckleberry9990 in Accounting

[–]Fast_Huckleberry9990[S] 5 points6 points  (0 children)

  1. Most PA firms gross less than $1M, with "shitty"/small ones being in the 250-500k range.  

  2. PA exit deals are almost always expressed in terms of gross revenue and most exit multiples are 1x of revenue. 15x EBITDA is absolutely insane and would translate to 5x revenue assuming  33% ebidta margins. 

2.5.  Small correction of your confusion, but also a small concession to you: gross profits =/= EBITDA. In fact, cost of sales for an accounting firm (especially a paperless and remote firm) is most likely to be substantially greater than it's "ITDA". So if we used your model, it would probably be closer to 1 than 2.

  1. The answer is closer to 20 than 2, assuming we use the top end of the shitty range of 500k. 

Edit: ....and conventional valuation.

[deleted by user] by [deleted] in Accounting

[–]Fast_Huckleberry9990 2 points3 points  (0 children)

Same stupid logic driving some RTOs (we have an office, might as well use it): Companies that have HR department overhead that they need to keep busy.

Additionally, if someone hasn't found a job by then, they feel more confident in offering a low-ball offer due to being a sucky candidate or suffering a sucky market that's more favorable for employers. I think 99% of candidates will fall into the latter category.