There are about 46,000 accounting firms in the US, and the 500th largest one has 20 staff and annual revenue of US$3 million.
Writing in Accounting Daily, Edward Mendlowitz says many of the firms simply do not want to grow. They provide a comfortable living for the partners, and as soon as the pressure to grow becomes unbearable, they bump up the fees to shed a few clients. In fact, small firms outnumber large ones 91:1.
Other firms are in it for growth, and that means a lot of time spent teaching junior staff. For those who want a relatively relaxed life, this is too much to bear. They prefer to nurture their existing coterie of clients and keep things calm, steady – and relatively small. Mendlowitz himself set up a relatively large practice (50 staff) and was involved in running it for 14 years before it was sold to a bigger firm. But then he decided it was time to dial things back and enjoy life. If you run your own practice, which category do you fall into: go for bust, or take it easy?