As September begins, many practice owners are shifting their attention from summer schedules to year-end planning. This is a valuable time to review your financial performance, identify areas that may affect your practice’s value, and consider the goals you want to accomplish in the coming year.
One area that deserves particular attention is the quality of your earnings. Buyers look beyond total revenue when evaluating a practice. They want to understand how dependable those earnings are, whether they are likely to continue after a transition, and how accurately the financials reflect the practice’s performance. Clean records, recurring revenue, a diversified client base, and well-documented operations can all help strengthen buyer confidence and support a better valuation.
We recently explored this topic in our new article, “Quality of Earnings: The Hidden Engine Behind Better Practice Valuations.” I encourage you to read it, whether you are preparing to sell soon or simply want to build a stronger and more transferable practice.
We are also looking forward to launching VC with PPT, our new virtual Coffee Hour series featuring candid conversations about business growth, access to capital, mergers and acquisitions, and today’s changing market. Watch for more information about our first discussion and how you can join us.
As always, our team is here to help you understand your options and prepare for your next chapter with clarity and confidence.
- Justin Farmer, Esq., CBI
President & Founder of Private Practice Transitions
DAD JOKE OF THE WEEK:
How do billboards communicate?
Sign language.
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Every practice transition presents its own opportunities and challenges. Our case studies offer a behind-the-scenes look at how Private Practice Transitions has helped accounting, tax, legal, and other professional practice owners protect confidentiality, navigate complex negotiations, find the right buyers, and maximize value.
From increasing a purchase price by approximately $10 million through strategic revaluation to successfully managing more than 150 buyer inquiries for a single practice, these stories demonstrate the difference experienced guidance can make.
For more than 10 years, this fully virtual Practice has provided comprehensive tax and accounting services to approximately 400 active business and individual clients. Its estimated 2025 service mix consisted of 85% tax preparation, 12% bookkeeping, and 3% consulting. The Practice generated $1,384,705 in gross receipts in 2025, increasing to $1,507,989 during the July 2026 trailing 12-month period. The Practice is supported by a team of two (2) professionals, including the Owner. To support a smooth transition, the Owner is willing to assist with the transfer of goodwill, business development, and ongoing mentorship for a mutually agreed-upon period. The Practice’s virtual operating model, responsive client service, and reputation for high-quality work position it well for continued growth. To learn more, call 253.509.9224 or email us with “1262 – Established Virtual Tax Practice with Strong Revenue Growth” in the subject line.
If you are interested in our featured listing,please email us and indicate the listing name and number in the subject line, or call us at 253.509.9224.
Quality of Earnings: The Hidden Engine Behind Better Practice Valuations
When practice owners consider ways to increase the value of their business, they often focus on factors like revenue growth, profitability, or the number of clients. While these aspects are important, potential buyers look beyond the surface. They want to assess not just how much the practice earns, but also the reliability and sustainability of those earnings after a transition.
This is where Quality of Earnings (QoE) becomes crucial.
Commonly used in private equity transactions and larger mergers and acquisitions, a Quality of Earnings analysis evaluates the accuracy, sustainability, and reliability of a company's reported financial performance. For accounting firms, tax practices, and law firms, a strong quality of earnings can enhance buyer confidence, minimize transaction challenges, and support higher valuations.
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