Firms dream of growth. Growth isn’t an accident; it is an outcome of a well-crafted plan coupled with a strong vision deliberately implemented. Strategy is the path.
At some point, every professional services firm reaches an inflection point. The partners look around the table and ask: What’s next? Do we build steadily, brick by brick? Do we join forces with another firm to leap forward? Or do we take on an investor who can fuel rapid expansion? Particularly in today’s environment, when almost every firm I know is receiving inquiries to merge or is being courted by private equity.
One managing partner of a mid-market accounting firm framed it well: “We realized growth wasn’t about doing more of what we’d always done. It was about making deliberate choices about who we wanted to be.”
This playbook explores three paths: organic growth, mergers & acquisitions, and private equity. Each has its own risks, rhythms, and rewards.
Organic growth is the craftsman’s path. It’s less about shortcuts and more about tuning a growth engine designed for resilience, control, and long-term equity.
A mid-sized CPA firm decided to focus exclusively on dental practices. They began publishing quarterly benchmarks on dental office performance and hosting regional leadership groups. Within a short time, they were invited to speak at the national dental association conference and their client base tripled.
Specialization is like choosing the fast lane on a crowded highway. By narrowing focus, whether by industry, service, or geography, firms can accelerate learning, sharpen messaging, and create reputation gravity.
High-growth firms consistently show a correlation between specialization and stronger performance. The driving force is knowledge leadership which means publishing proprietary studies, guides, and trend reports that prove your expertise and leading with authority.
A boutique consulting firm that helped SaaS startups with pricing strategy noticed recurring questions about churn metrics. Rather than ignoring the demand, they rolled out a new analytics offering. Within a year, customer retention analytics became their top-selling service – an expansion born from listening to their clients and having a workable feedback model within their firm.
Expansion works best when tied to client needs and then supported by repeatable methods.
Cross-selling is not selling. It’s a discovery.
An accounting firm advising a founder on tax considerations uncovered succession challenges during discussions. By connecting the founder with their family wealth advisory colleagues, the firm not only retained the tax work, but also won a long-term wealth management relationship.
The key is timing. Cross-selling works best when you:
Generic newsletters go unread. Hyper-targeted thought leadership builds demand.
One regional investment banking firm created a quarterly “Portfolio Pulse” briefing for referral sources (wealth managers, commercial bankers, private equity operating partners, estate attorneys, and accountants). Leveraging data from their membership in an industry group, the briefing covered labor cost trends, tax policy updates, and technology adoption benchmarks. Within a year, the briefing became a must-read and inbound referrals doubled.
Step-by-step, effective organic marketing includes:
An M&A advisory firm mapped its top 50 referral sources which included estate attorneys, fractional CFOs, and commercial bankers, and built quarterly “value exchange” sessions. Instead of just asking for referrals, they shared client trend insights and discussed the challenges they were all seeing in the marketplace. In return, introductions flowed naturally.
To build your referral engine:
Organic growth is steady, disciplined, and controllable. It is the right path for firms who want to protect culture, set their own pace, and build equity through patience. It is not the path for those needing an environment of organized chaos and fast-paced decisions. Think turtle not rabbit.
Recommendation: Audit your current growth efforts. Do you have a defined specialization, a plan for service expansion, a structured referral engine, and marketing that compounds? If not, choose one area to strengthen this quarter and create a plan with 90-day sprints. Don’t forget to build in a reporting structure and a commitment to hold each other accountable. Lack of follow through due to being “too busy” is no excuse, it is just a thinly veiled way of saying “this is not a priority.”
M&A is the fast lane. It can catapult a firm forward in scale, geography, or capability. However, the merge must be orchestrated with precision or the collision costs more than the deal. Statistics from organizations such as the Exit Planning Institute show that somewhere between 70 and 90% of all M&A deals fail to meet their desired goal. Why? It’s simple... lack of integration planning.
A Texas-based CPA firm acquired a smaller practice in Denver to break into the Rockies market. Overnight, they added 25 staff and a new geographic footprint. The focus was on the geographic location and deal size. Consequently, little time was spent on cultural alignment and even less consideration given to client communication. The sad outcome was a spike in the churn rate to 15%. The acquisition grew headcount at the expense of client loyalty. A costly lesson.
Contrast that with a strategy consultancy that merged with a data analytics boutique. The deal thesis was clear: clients wanted strategy plus analytics. Integration was rocky at first as the firms cleared the hurdles of systems and process differences, but by aligning service delivery models early, the combined firm won three major clients within the first year. A result which made the pains experienced in combing the firms much more palatable.
Successful deals share five practices:
M&A compresses time it takes to grow. Integration requires energy, focus, resources, and can be frustrating and exhausting. Done well, it leapfrogs growth. Done poorly, it burns trust.
Recommendation: Before pursuing a deal, build a mock 100-day integration plan. If your leadership team cannot articulate client communications, cultural alignment, and system priorities in detail, your firm may not yet be ready to merge.
Private equity is the rocket fuel for exponential growth. When applied to a strong engine, it accelerates the launch. Just like the real thing, rocket fuel is dangerous if it’s not ‘all systems go.’ Private equity firms are still sitting on large sums of money and are actively searching for that next deal. In recent years, the accounting industry has caught the attention of PE with numerous platform investments, roll ups and tuck ins occurring.
A mid-market accounting firm with a deep history of providing traditional services but limited capital to support rapid growth accepted a PE investment. The influx of funds provided tech upgrades, recruiting, and a national roll-out of CAAS services. Within three years, revenue doubled as the firm successfully expanded its services into succession planning and transaction advisory.
PE provides:
The best outcomes come when conviction stays in-house. Leadership must drive strategy, not outsource it. The wrong investor can push growth at the expense of culture, clients, and long-term sustainability. Money doesn’t always translate into understanding, particularly when it comes to the accounting industry. One thing is for certain, good or bad, it is not “business as usual” with PE investment. PE funds growth not status quo.
Recommendation: Document your firm’s non-negotiables before entertaining conversations. Which client service standards, cultural norms, benefits, or leadership practices must remain intact, regardless of investor demands? Create a list of questions around every process and decision point in your firm. “What happens if . . .” scenarios can help uncover the unknown and help your firm make a better decision. Use this as your guardrail in negotiations.
Each path—organic growth, M&A, or private equity—offers real promise. But clarity begins with vision.
Recommendation: Set aside one leadership retreat to pressure-test all three paths. Build scenarios: “What if we go organic only? What if we pursue a merger? What if we accept capital?” Write down the assumptions, risks, and trade-offs for each. Then create a list of non-negotiables – the elements of your firm that must remain at all costs. This exercise forces clarity and reveals blind spots. More importantly, an exercise like this helps leadership gain clarity about the pros and cons of each approach. Clarity leads to better decision-making and creates a more unified leadership team. Get clear on key areas such as:
One advisory firm blended paths. They built organically for years, then layered in selective acquisitions. When the growth engine was solid and proven scalable, they invited PE capital to accelerate expansion. Today, they’ve grown from one city to eight and preserved their culture. None of the paths are without sacrifice or pain points. It all comes back to the collective vision.
Need help identifying the next step in your firm's growth journey? Contact Hollinden today.