Anyone who has ever bought or sold real estate understands how critical location and size are to a property’s value. The same holds true in CPA firm mergers and acquisitions.
Despite the increasing acceptance of remote work and virtual collaboration, geography remains a defining factor in how deals are evaluated—and ultimately executed.
Most CPA firm revenue is still tied to local relationships and market familiarity. Business might be conducted nationally, but trust is built regionally. Clients, referral sources, and competitive dynamics are still rooted in the communities firms serve.
At the same time, buyers are increasingly looking at a firm’s size to gauge its scalability, team structure, and operational maturity. Can the firm support growth? Does it have the infrastructure to integrate? Is there depth beyond the founding partners? These are essential questions in any deal conversation.
Many sellers misjudge how buyers will perceive their geography or size. Some overestimate the appeal of their market without backing it up with data; others underestimate the value of their scalable processes, team capabilities, or niche position.
Prior to engaging in M&A conversations, the following market intelligence should be evaluated:
Why Geography Still Counts
Geography is often the first filter buyers apply when evaluating firms. Many acquirers enter conversations with only a surface-level understanding of the markets they’re targeting. They have a list of “hot” cities but haven’t done the homework to truly understand what makes those markets strategic, competitive, or difficult to enter.
On the flip side, sellers must help buyers understand the “why” behind their regional market—what’s happening economically, who the key players are, and what strategic advantage the firm brings within that environment.
I’ve heard buyers say, “We want to be in Baltimore,” or “We’re targeting the I-95 corridor.” However, when pressed, they can’t always explain why that location aligns with their growth strategy. That presents an opportunity for sellers to guide the narrative.
To make geography a differentiator, sellers should be prepared to speak to:
- Marketplace Demographics – What industries are growing? What’s the mix of privately held businesses, high-net-worth individuals, or nonprofits in your market?
- Competition – Is the area saturated, or is there room for a bigger player with your service mix and relationships? What are the right achievable metrics in the area? What is the market for talent?
- Upside Potential – Are there untapped industries, succession-heavy firms, or underserved client segments in the location where your firm already has traction?
Buyers also care about how embedded you are in the community. Firms with strong referral networks, sponsorships, banking and legal relationships, and visibility in local business circles are inherently more valuable. These soft assets are harder to replicate and accelerate post-deal integration.
It’s worth noting that just because a market is in demand doesn’t mean it’s easy to enter. In booming cities like Atlanta and Miami, few firms change hands because owners know they’re in control and often drive harder deals. In these cases, being in the right location isn’t enough to warrant a bigger price tag; buyers still expect sound financial metrics, solid margins, and growth potential.
Size and Scale as Strategic Leverage
If geography sparks the initial interest, size often drives deal structure and confidence. Buyers are looking for firms that not only meet financial thresholds but can scale operationally and culturally, after the deal closes.
From a buyer’s lens, size is often a proxy for:
- Capacity – Can the firm support more clients, more complexity, and increased demand?
- Team Depth – Are there multiple professionals in key roles, or is all the knowledge held by one or two partners?
- Operational Sophistication – Are there dedicated roles for firm administration, HR, IT, business development, or CAS (Client Accounting Services)? Are workflows documented and scalable?
Firms in the 15–30 person range are often especially attractive. At that size, there’s typically an infrastructure that includes a firm administrator, delegated responsibilities, and a cultural readiness for growth. Firms in the 30–50 range often have even more robust departments—CAS, HR, IT—which make integration smoother and present opportunities for cross-firm efficiency.
Firms with fewer than 15 employees are more common, but they often lack the scalable infrastructure buyers are seeking. That doesn’t mean they’re off the table—just that they need to position themselves strategically.
Final Thoughts
CPA firm M&A, like other industries, is driven by money and advantage. Geography and size/scale are two very important elements that influence the potential for stronger financial results and optimal advantage.
The geography and size of the firm must be included with all the other filters, such as metrics, infrastructure, talent, leadership, synergies, and cultural fit.
Some of the best deals happen when buyers are willing to look beyond rigid size targets and focus on strategic fit. That might mean acquiring a smaller boutique firm in a highly desirable market or picking up a specialized player that gives you a foothold in an emerging industry or niche.
Whether you’re on the buy-side or the sell-side, success in CPA firm M&A doesn’t come from following formulas. It comes from asking the right questions, having optimal market intelligence, credible vision, and entrepreneurial commitment – geography and size will tell you quite a bit about the viability for success. Parties to a deal are well served by a thorough analysis and understanding of geography and size, especially in the current hyperactive climate.
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Ira Rosenbloom is the founder of OptimumStrategies, and is an expert accounting firm merger advisor who helps CPA firms of $1 million to $20 million in the Mid-Atlantic region evaluate and complete M&A transactions and achieve their goals. For many firms, this starts with determining which side of the deal table they want to sit on—buyer or seller.
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