From $500k Revenue to $470k Profit in 12 Months

For accounting firms, here’s the secret formula: Let's do some back-of-the-napkin math. Say you buy a $500K revenue accounting firm. For simplicity, let’s assume that equals around 500 sticky clients. Of course, you can buy this firm for $0 out of pocket as well. The average firm runs at a 45% profit margin. So that’s $225K in cash flow. But we need to back out debt service. For a quick estimate, we use 15.5% of the purchase price. That’s $77,500. Net is roughly $147,500 hitting your pocket. Not bad. But here’s where the Triple Threat kicks in. 1. Acquisitions: $500k firm for $0 2. Advisory: Add just 10 out of 500 clients paying $2k/month for tax planning. That’s $240K straight to the bottom line. 3. AI: I saw this live. AI cranked out a 1040 in under 2 minutes with 100% accuracy. It’s scary, but the ones in front of this wave are winning. You can see how we will be able to cut 30% of expenses. That’s another $82,500 saved. And all of this stacks. That $147,500 in post-debt cash flow is now $470,000. It all starts with one move: Acquisitions.