La Jolla CPA Firm, 40-Year San Diego Tax & Attest Practice

$768K

Revenue

$585K

SDE

1.7x

Multiple

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Full Editorial Writeup

This is a 40-year-old CPA practice founded in 1986 and operated by a single owner-CPA in La Jolla Village, one of the wealthiest zip codes in San Diego. The firm generates roughly $768,000 in gross revenue weighted toward tax compliance ($544,856), with accounting, attest, and payroll adding $150,642 and consulting and advisory rounding out the rest. The book is built on individual returns (362 Form 1040s), entity work (85 corporate returns, 35 partnerships), trust returns, and nonprofit filings, which tells you this is a diversified, sticky, recurring tax and compliance practice rather than a one-trick shop.

What makes this one notable is the attest capability. The practice includes audit and review engagements, and the seller is explicit that a buyer without attest licensing is not a fit. That narrows the buyer pool but also protects the asset: attest work is a higher-barrier, higher-value service line that commands retainer-style relationships and recurring annual engagements. Combine that with a La Jolla clientele where many relationships span multiple generations, and you have a durable, affluent, referral-driven client base.

The operational footprint is lean to a fault. One owner-CPA doing 40 to 55 billable hours a week plus a single part-time admin/bookkeeper produces $585,000 in SDE on $768,000 of revenue. That is a 76% owner-earnings margin, which is exceptional even for accounting, but it also signals the obvious risk: the business largely is the departing owner, and the entire thesis hinges on transferring those relationships cleanly.

Why we like it

Earnings quality is outstanding: $585,000 of SDE on $768,000 of revenue is a 76% margin, and the asking price of $1,000,000 implies just 1.71x cash flow. Accounting practices typically trade at roughly 0.9x to 1.3x revenue, so at roughly 1.3x revenue here you are paying a fair but not cheap multiple for one of the stickiest income streams in small business.
The moat is real and reinforced by attest work. Audit and review engagements require licensing and experience that most buyers lack, which limits competition and makes these the highest-retention, highest-value relationships in the book. Layer in La Jolla clients whose relationships span multiple generations and you have switching costs built on trust, not just convenience.
Tax and compliance spending does not blink in a recession. Clients still have to file 1040s, 1120s, 1065s, 1041s and 990s regardless of the economy, and a diversified mix across individuals, entities, trusts and nonprofits smooths the revenue base. This is about as close to non-cyclical cash flow as a service business gets.
The operator advantage is a consolidation play. A larger local firm or an ambitious CPA can plug this book into existing infrastructure, raise fees that have likely lagged (a $853 average 1040 fee in La Jolla is low), and spread the fixed cost of software and admin across a bigger base. The lean cost structure leaves obvious margin for a buyer who adds leverage.

How to improve it

Lock the seller into a meaningful transition before close. The entire value is relationship continuity, so structure 12 to 24 months of co-signed client letters, joint meetings, and a defined handoff of the attest engagements, ideally with a holdback or earnout tied to client retention through the first full tax season and audit cycle.
Reprice the book. Average fees of $853 per 1040 and $1,435 per corporate return are low for an affluent La Jolla clientele that has not seen increases from a 40-year owner winding down. A 10% to 20% fee adjustment phased in over two seasons could add six figures of pure-margin revenue with minimal attrition.
Push document flow fully digital. Today only 50% of clients transmit electronically while 25% still drop off and 10% mail documents in. Moving the base to a secure client portal reduces labor during the crush of tax season and makes the practice far easier to staff and scale.
Build a second preparer and a succession bench. The firm runs on one CPA plus a part-time admin, which is a single point of failure. Hiring or contracting a staff CPA or EA to absorb preparation work frees the owner-buyer to focus on attest, advisory, and client growth rather than keying returns.
Expand the advisory and consulting line. Consulting is only $32,578 of revenue today despite a high-net-worth client base that needs tax planning, entity structuring, and estate work. Advisory carries higher margins and deeper stickiness than compliance and is the clearest organic growth lever.
Pursue a tuck-in roll-up strategy from this base. With lean overhead and attest licensing in place, this firm can acquire other retiring San Diego CPAs and absorb their books with limited incremental cost. The infrastructure and the La Jolla brand make it a credible local consolidation platform.
Formalize recurring engagement agreements. Convert ad hoc annual relationships into signed multi-year engagement letters for attest, payroll, and bookkeeping clients. This hardens retention, improves the quality of earnings for a future resale, and smooths cash flow across the year.

Diligence notes

Reconcile the revenue figures, which are inconsistent in the listing. The description cites 2025 revenue of approximately $728,076 while gross revenue is listed at $768,076 and 2026 is projected at $768,000. Confirm which is trailing actual versus projection, and verify SDE of $585,000 against tax returns and the add-back schedule.
Stress-test client concentration and retention. Request a client-by-client revenue breakdown, the top 10 or 20 clients as a percentage of billings, and historical attrition. A 40-year single-owner practice in a small community can carry hidden concentration, and you need to know how much revenue walks if the seller does.
Validate the attest engagements specifically. Because a non-attest buyer is explicitly disqualified, confirm the number, size, and recurring nature of the audit and review clients, the licensing requirements, peer review status, and any liability exposure or pending engagements tied to those clients.
Assess transition risk given the owner concentration. The business is effectively the departing CPA plus one part-time employee. Nail down the seller's post-sale commitment in writing, the admin employee's intent to stay, and whether the La Jolla office lease and location (which the seller believes must be retained) can transfer cleanly.
Confirm the fee and workload economics. The seller works 40 hours off-season and 55 during tax season, so verify that the $585,000 SDE is sustainable without the owner's full labor, or quantify the cost of replacing that production with hired staff. That delta directly affects the true multiple you are paying.

Source

Originally listed on BizBuySell. View original listing →