PracticeConsultingThink before you consolidate

Think before you consolidate

Now that yet another player - in this case Levy Gee, sorry Numerica - has emerged as a fully fledged consolidator, it is tempting to compare this new breed of firm looking to buy up smaller rivals to the predators that gather on the plains of the Serengeti each year as the wildebeest begin their annual migration.

For while accountancy firms perhaps have a little more freedom of choice about their future direction than these ungainly animals, they should be just as cautious in dealing with any unfamiliar beast.

The speed and spread of consolidation this year has taken everyone by surprise. The benefits are clear: for some it’s an exit route from the profession, for others it’s the security offered by a larger family.

But sometimes the potential downsides can be overlooked. Joining a consolidator requires the establishment of a new brand, the creation of a margin for all stakeholders while partners, naturally, must be suitably rewarded.

Can one deal satisfy all three conditions? Possibly – but it’s an uphill struggle. If you are looking to consolidate make sure you ask yourself some tough questions about your motives and the likely benefits of any tie-up.

Two out of three wildebeest calves born each year perish without returning to the Serengeti. Don’t let consolidation be the death of your firm.

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