practiceprofile
“We are currently talking with two
other firms, and hope to add one
to two firms per year for the next
several years,” he said.
Those future acquisitions will go
smoothly, no doubt, in part thanks
to the firm’s discipline. “We have
a set economic formula that we
don’t stray too far from,” Winheim
explained, “and a due diligence
process and information that we
gather for analysis.”
That discipline, and its pric-
ing formula, allows the firm some
latitude: “We are not hyper-critical
in selecting or analyzing acquired
firms, because 90 percent of the
purchase price is based on reten-
tion, which is only paid on profit-
able engagements,” Winheim said.
“Our strong management team,
review processes and systems pre-
vent us from incurring any unfore-
seen problems.”
‘I am not
sure I
would do
anything
different.’
strategy is to grow the firm 20 per-
cent per year for the next five years,”
said Winheim. “This will assure
growth opportunities for all of our
staff, and keep us independent.”
Remember, they own their own
building — and they’ve still got
space to fill. AT
In addition, the firm has ways of
boosting revenue from acquired
businesses, starting with its finan-
cial planning affiliate, Price Kong
Financial Services. “We have a very
strong financial services division
with great penetration into our ac-
counting client base, and we don’t
pay the selling partners for any new
business that comes on the finan-
cial services side unless they get
licensed and participate in the pro-
cess,” Winheim said. “Historically,
the acquired partners are paid in
excess of one times annual income
for their practices, and Price Kong
still makes money because the ac-
quired business expands, since we
are able to do so much more for the
clients that we ultimately end up
with higher billings.”
Furthermore, Price Kong pursues
economies of scale by minimizing
administrative staff and eliminating
duplicate software and IT costs.
