March 8, 2023

Episode 73: Sam Edwards of Strategy&

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The Story

As a leader of an accountancy firm or as a leader of a department, you’ll get to a stage where you wonder:  how on earth do I further improve the EBITDA or profitability of my firm or department? How do I improve its capital value?

Which is why I was delighted that Sam Edwards of Strategy&, an advisory firm to businesses acquiring or selling other businesses, said yes to joining us on the podcast.

Sam is very candid, very open, about the strategies, the processes and the principles behind building EBITDA and profitability from the standpoint of private equity firms buying into accountancy firms.

He's recently been involved in 12 deals, and he brings a real practicality to appreciating and understanding the drivers that deliver EBITDA and capital value growth.

So I hope you’ll listen to this valuable and worthwhile discussion with Sam Edwards. Please also scroll down this page to see the contact information for Sam and to access an additional resource mentioned in the podcast.

The Solution:

The objective at a high level is to remove those administrative burdens to enable you as a partner to spend more time serving clients.

One of the big questions is around the transition from being a partnership to being a corporate structure, which is what needs to happen to facilitate these investments.

You move from effectively being in ‘eat what you kill’ partner mode to being a salaried individual with some equity in the broader group when it transacts. That's a different mindset.

But actually, we've completed lots of focus groups with accountants and online surveys that some of your listeners may have even taken part in. And the general view is that the benefits outweigh the drawbacks in terms of job security, lack of cyclicality, etc.

Because when you are running your own practice, there are going to be good years and there are going to be bad years, and sometimes you may need to put money in to support the firm in times of distress, such as the Covid period that we've just been through.

Becoming part of one of these investment platforms and transitioning to that corporate model reduces the stress burden without necessarily reducing your compensation, because you continue to be incentivised for the firm to do well through your equity and, hopefully, that will pay dividends at the point of next transaction, which is generally every three to five years in private equity owned companies.





Connect with Sam

Connect with Paul

Resources relating to this podcast:

In their discussion of the importance of KPIs, Sam talks about results-focused KPIs, including churn, staff, recruitment, number of clients, type of clients, pricing and team metrics.

Paul and Sam discuss the importance of Key Predictive, not just Key Performance, Indicators, including team engagement, client engagement and conducting employee and client surveys, and both agree that the performance indicators can help you track the predictive indicators, especially if you forensically analyse your KPIs regularly.

The key is to be able to adjust and adapt your KPIs as your firm changes. If you continue to measure what you have always measured, your team will not learn and your firm will not grow.

Click the button to the right to read the Business Breakthrough report 'Healthy Heartfelt KPIs' to discover the importance of measuring what matters most.

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