High Profit Chicago North Shore Tax & Accounting Practice, 25-Year Lake County CPA Firm

$950K

Revenue

$723K

SDE

2.0x

Multiple

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Full Editorial Writeup

This is a 25-year-old tax and accounting practice serving the affluent Chicago North Shore market from Lake County, Illinois. The firm generates $950,000 in annual revenue with an exceptional $723,000 of seller's discretionary earnings, a 76% margin that is well above the norm even for well-run CPA practices. Roughly 20% of revenue comes from accounting work with the balance from tax preparation and advisory, and the client base skews toward high-net-worth individuals who pay strong average fees.

The practice is described as well-staffed, which is the key operator lever here: a buyer is not stepping into a solo book that collapses without the owner, but into an existing team that already produces the work. The North Shore is one of the wealthiest markets in the Midwest, which supports premium pricing, stable client retention, and steady referral flow. The seller is retiring and has agreed to help transition client relationships, and the deal is SBA pre-qualified for up to 90% financing.

At a $1,450,000 asking price against $723,000 SDE, the multiple is roughly 2.0x. That is a very reasonable entry point for a practice with recurring annual filings, sticky affluent clients, and margins this high. The main question a buyer must answer is how much of that 76% margin is real, transferable profitability versus the current owner personally producing a large share of the billable work.

Why we like it

Earnings quality is the headline: $723,000 SDE on $950,000 revenue is a 76% margin, roughly double what a typical tax and accounting practice throws off. Even after normalizing for owner add-backs and a fair replacement salary, this is an unusually cash-rich book, and the 2.0x SDE multiple is cheap for that quality of earnings.
The moat is client stickiness and switching costs. Tax and accounting clients rarely leave once their historical returns, filings, and financial data live with a firm, and 25 years of operating history means multi-year relationships and predictable annual re-engagement. High-net-worth clients in particular value continuity and are the least price-sensitive segment.
Market tailwinds favor the location. The North Shore is one of the wealthiest markets in the country, and affluent households and their entities generate complex, high-fee tax and advisory work that is resilient across cycles. Tax filing is legally mandatory, so demand does not soften in a downturn.
The operator advantage here is the existing staff. The listing describes the practice as well-staffed, meaning a buyer inherits production capacity rather than a one-person book that dies with the seller. That, combined with SBA pre-qualification for up to 90% financing, makes this an accessible acquisition for a competent operator or a CPA looking to consolidate.

How to improve it

Push the accounting and advisory mix upward. Only 20% of revenue is accounting today, meaning the book leans heavily on seasonal tax prep. Converting more clients to year-round bookkeeping, monthly financials, and CFO-style advisory smooths cash flow and increases per-client revenue while deepening retention.
Institute annual price increases on the affluent base. High-net-worth clients rarely leave over a 5 to 10% fee bump, and the listing already notes strong average fees. A disciplined pricing review in year one can add meaningful margin directly to the bottom line with near-zero client attrition.
Build a formal referral and estate/attorney network. North Shore wealth flows through estate attorneys, wealth managers, and family offices. Structuring reciprocal referral relationships turns the affluent geography into a repeatable client acquisition channel rather than relying on passive word of mouth.
Reduce owner dependency before and during transition. Map exactly which clients the retiring seller personally services and reassign those relationships to staff during the handover. Locking in the top 20 clients with the team is the single most important value-protection move post-close.
Add technology and workflow automation. Modern tax software, client portals, and document automation can lift throughput per staff hour, absorb more clients without proportional headcount, and improve the client experience for a demographic that increasingly expects digital convenience.
Introduce engagement letters and multi-year retainers. Formalizing annual engagements and offering bundled year-round packages converts implicit recurring revenue into contractual recurring revenue, which both stabilizes the book and raises the exit multiple when you eventually sell.

Diligence notes

Quantify true owner dependency. The 76% margin is exceptional, so confirm how much billable production the owner personally does and what a market-rate replacement CPA or manager would cost. Recast SDE with a full replacement salary to see what genuinely transferable EBITDA looks like.
Analyze client concentration and retention. Request revenue by client for the last three years and identify what percentage comes from the top 10 and top 20 clients. Affluent books can hide concentration risk where a handful of high-fee relationships drive the margin.
Verify revenue seasonality and mix. With only 20% from accounting, understand how much of the year's cash is generated in the January to April filing window and whether staffing costs are fixed year-round against seasonal revenue. This affects working capital needs.
Confirm staff stability and comp. Review tenure, roles, licensing (CPAs vs preparers), and compensation of the team, and assess retention risk through an ownership change. A well-staffed practice is only an asset if the staff stays post-close, so consider stay bonuses or non-competes.
Validate the founding date and history. The listing says 25 years established but lists Established as Not Disclosed. Confirm the actual operating history, entity structure, prior ownership changes, and any historical malpractice or client disputes before relying on the tenure narrative.
Stress-test the SBA financing assumption. The listing claims pre-qualification for up to 90% financing, but confirm this directly with a lender against your own borrower profile. Model debt service at 90% leverage against normalized cash flow to ensure comfortable coverage after a replacement salary.

Source

Originally listed on BizBuySell. View original listing →