Have an opportunity to leave public accounting and work with a semi established CPA with their own tax practice. Top line revenue is around 500,000 with expenses being about 100,000. I would take over day to day operations, while they continue to funnel in new clients (currently have ability and capacity to take on additional 100k a year). I would earn ownership through sweat equity, 50/50 by year 4. Thoughts?

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Posting as :
works at
You are currently posting as works at

Will you get a salary at all? Do they take a salary and is that included in the expenses? Medical, dental, 401k, insurance? A lot of stuff could add to the expenses

Profit margin is about 80% before any salaries for ourselves. We would both take 100k next year. No retirement, insurance isn’t an issue due to spouse. Of the 400k take home before the wages, 50k would be allocated to me as sweat equity.
Any additional work we took on would be split 50/50

It all comes down to how confident you are in the future of the business. If you expect it to take off and can afford to put in the sweat equity for a few years until it does, go for it. My only concern would be about capacity - are you saying revenue is essentially capped at 600k for now?

why doesn’t he just hire staff instead? firms run better when you can leverage staff

All I have to add is that there is a huge shortage of competent CPAs out there. Both of my accountants (one of whom is my best friend from college) have told me this, so I think you have some leverage here.

Couldn't you just do this yourself without a partner?

My guess would be the overhead would be very expensive if OP went solo.

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