Why Younger Partners Don’t Want to Fund Older Models in CPA Firms (And How Analytics Can Help)
2 MIN READ
Jessica Kentch, Founding Partner, Ablaze Analytics & Collective
When I first launched Ablaze Analytics, I never imagined I'd end up helping CPA firms navigate their succession planning and exit strategies. My journey into this space was, in fact, accidental—one I never planned but have come to embrace wholeheartedly. What I’ve realized, though, is that as much as firms focus on their immediate operational challenges, they are facing a generational gap that significantly impacts their long-term strategy.
Here’s what’s happening:
The Generational Divide: Older Partners vs. Younger Partners
Older partners of CPA firms often find themselves in a difficult position as they near retirement. Traditionally, their exit plan involves selling their book of business—the clients they’ve worked with for decades—to younger partners. The challenge? Younger partners often don’t want to buy into this model.
Why?
In many cases, younger partners are being asked to fund the retirement of their older counterparts by purchasing a client base that isn’t necessarily attractive or sustainable. Imagine buying a 20-year-old car that’s been through a lot—sure, it runs, but it’s not a long-term investment. That’s how many younger partners feel when faced with taking over a portfolio of clients that aren’t as strategic as they’d like.
Rather than inheriting a profitable, scalable book of business, younger partners often end up with clients who may not represent the growth potential they’re looking for. These clients might be too small, outdated, or simply not aligned with the direction the firm is headed in the future. It’s like being asked to buy a Corolla that’s been running for two decades when what you really want is a shiny new BMW. 🚗💨
The Result: Stagnation or Even Exit
For many firms, this divide has created a real succession problem. Older partners are ready to retire, but without younger partners willing to take on their clients, their firm may not have much of a legacy to pass on. On the flip side, younger partners are reluctant to stick around if they feel they are being asked to pay for something that doesn’t align with their vision for the firm’s future.
So what’s the solution? For some firms, private equity (PE) has stepped in to provide an alternative. Rather than selling directly to younger partners, older founders can sell to PE firms, who bring fresh capital and strategic vision into the mix. The firm gets the capital they need to grow, while younger partners get a clearer path to leadership without the weight of inheriting a client base they didn’t build.
My Journey: From Enterprise Sales at Intuit to Helping CPA Firms Leverage Analytics
When I left Intuit in 2023, my goal was to purchase a CPA firm. With over a decade of experience as a top enterprise software sales rep, I thought I could bring new life to a firm through data and technology. I interviewed nearly 50 CPA firms, eager to find one that embraced analytics and technology—my specialty. However, what I found was a bit of a shock: very few were using analytics in any meaningful way.
Most firms still relied on traditional methods to run their operations, and many were still manually processing data or using outdated software. They lacked the data-driven insights I knew could help scale their businesses efficiently. After seeing this, I realized that simply purchasing a firm wasn't the solution. What these firms needed was someone who could help them modernize and leverage data analytics to remain competitive in the marketplace and, importantly, make their firms more attractive to both new talent and investors.
How Analytics Plays a Key Role in Changing the Game
This is where Ablaze Analytics comes in.
When I founded Ablaze Analytics, I never set out to specifically help CPA firms with their exit strategies. But time and time again, as I worked with firms to help them leverage data and analytics, I saw a pattern emerging. Firms that were implementing advanced analytics tools were much more attractive to private equity firms and potential buyers.
Why? Because analytics not only improves efficiency and profitability, it also creates a data-driven story that appeals to investors. When firms can demonstrate that their operations are optimized, that they can predict future growth with data-backed insights, and that they’re using technology to increase profitability, they become much more appealing to buyers—whether it’s younger partners or outside investors.
By using tools like Ablaze Analytics’ DataStory, firms can:
Identify profitable growth areas and focus on sustainable clients
Streamline operations and reduce overhead costs
Use data insights to increase client retention and satisfaction
Set pricing and service models that reflect the firm’s true value, rather than relying on outdated client relationships
Analytics doesn’t just make your firm more efficient—it makes it future-proof and attractive to investors, including both private equity and younger partners.
The Bottom Line: Analytics Can Bridge the Gap
As the generational shift continues, firms that are slow to embrace technology and data may find themselves stuck in a cycle where their older models no longer work, and their future seems uncertain. But those that leverage analytics, like those used in Ablaze Analytics, can create a more attractive, scalable, and profitable firm for both existing and potential partners.
Younger partners, who are increasingly focused on long-term growth, value, and innovation, will be drawn to a firm that uses analytics to its advantage. They don’t want to buy into an outdated model—they want to build something new, exciting, and future-ready. And analytics is the key to making that happen.
At Ablaze Analytics, we’ve seen firsthand how firms can transform their operations, increase their valuation, and create a smoother exit plan by embracing data. Whether you’re looking to attract new talent, position your firm for acquisition, or simply streamline operations, the power of analytics is undeniable.
If you’re ready to see how analytics can help your firm build a more profitable and sustainable future, let’s talk!
Contact us today to learn more about how we can help you take your firm to the next level. 🚀