Why Organic Growth Is Losing to Roll-Ups and How Firms Under $2M Can Still Win

Private equity-backed acquisitions are changing competition in the accounting profession, but independent firms do not need outside investors to pursue growth. For firms generating less than $2 million annually, the practical response is to understand how consolidation is affecting their local market, protect existing client relationships, and identify opportunities that fit their available capacity. The goal is not to compete with a larger firm’s acquisition budget. It’s to make informed decisions about where an independent practice can deliver value.

A neighboring accounting firm has just joined a larger group. Its name may stay the same, but its ownership, service offerings, or management structure could change.

What does that mean for your practice?

You might face a larger competitor with more resources. You might also find that some prospective clients prefer an independently owned firm.

Neither outcome is guaranteed.

At New Clients, Inc. (NCI), we help accounting professionals develop their practices. For owners wondering how to grow an accounting firm while consolidation continues, the first step is understanding what has actually changed in their market.

How much is private equity changing the accounting industry?

The International Federation of Accountants (IFAC) identified 177 direct private equity investments and 875 subsequent acquisitions involving accounting firms worldwide between 2015 and 2025.

Its research also shows that acquisition activity accelerated during that period.

These figures demonstrate the scale of consolidation, but they do not mean every accounting market is experiencing the same level of competition.

The impact on an independent practice depends on which firms are being acquired, what services they provide, and how their new owners operate.

A merger involving two large regional firms may have little immediate effect on a small bookkeeping practice. An acquisition involving a direct local competitor could matter much more.

What should you check when a competitor joins a roll-up?

Before changing your marketing strategy or service offerings, establish what the acquisition means for your local market.

Review four areas:

Area to review	What to look for	Why it matters
Services	Changes to the acquired firm’s advertised services	May reveal opportunities or new competition
Client segments	Industries and business sizes the combined firm serves	Helps identify overlap with your target clients
Staffing	Publicly announced leadership or team changes	May affect how the competitor delivers services
Local presence	Office changes, new locations, or expanded coverage	Helps assess its competitive reach

Use publicly available information rather than assuming an acquisition will lead to higher fees, employee departures, or dissatisfied clients.

The purpose is to understand your competitive position, not to predict problems at another firm.

Does being under $2 million protect a firm from consolidation?

No. There is no universal revenue threshold below which accounting practices are excluded from acquisition activity.

Private equity-backed platforms may acquire smaller firms as part of a broader expansion strategy.

For an independent owner, annual revenue is also only one measure of business strength.

A $900,000 practice with stable clients, manageable workloads, and healthy profitability may be well positioned to remain independent.

A $1.8 million practice struggling with staffing, cash flow, or owner dependence may face different challenges.

Instead of treating $2 million as a dividing line, evaluate whether your current business model supports your growth goals.

Where can independent firms find opportunities?

One possible advantage is the ability to make decisions without coordinating across multiple offices or ownership groups.

For example, an independent firm may be able to evaluate a prospective client, discuss service requirements, and make an engagement decision through a small leadership team.

That flexibility can be useful when clients have unusual needs or want direct access to an experienced accountant.

However, a smaller firm must still have sufficient staffing, expertise, and capacity to deliver what it promises.

Focus on opportunities where your practice has a genuine service advantage rather than assuming clients will leave a larger competitor simply because its ownership changed.

How should you respond if a competitor changes its services?

Suppose a nearby firm announces that it will focus more heavily on larger business clients.

That announcement does not prove it is dropping smaller accounts. But it gives you a reason to review whether local small businesses have sufficient accounting-service options.

Before pursuing that segment, ask:

• Do we have the expertise to serve these businesses?
• Can we take on additional clients without delaying existing work?
• Are the expected fees appropriate for the services required?
• Can we provide a clear onboarding process?

If the answers are positive, the segment may be worth exploring.

If your team is already at capacity, attracting more work without addressing delivery constraints could create new problems.

What should you protect before pursuing growth?

Existing client relationships deserve attention before launching a campaign aimed at a competitor’s market.

Review whether clients receive timely communication, understand their service arrangements, and know whom to contact when questions arise.

Pay particular attention to accounts that depend heavily on the owner personally.

If the owner handles every important conversation, growth may become difficult as the practice adds clients.

Clear responsibilities, consistent communication, and documented service procedures can help the firm maintain continuity.

These improvements matter whether or not a competitor has been acquired.

How can you tell whether a new market opportunity is worth pursuing?

Use a simple opportunity assessment before committing resources.

For example, consider a hypothetical independent firm evaluating a new group of business clients.

Question	Illustrative finding
Is there demand?	Several qualified inquiries have been received
Do we have relevant expertise?	Two employees already serve similar businesses
Do we have capacity?	Approximately 20 additional service hours are available monthly
Are the fees appropriate?	Expected engagements appear capable of covering service costs
What could limit growth?	Additional review capacity may be needed

The decision should reflect actual demand and available resources, not simply the presence of a larger competitor.

For more detail on evaluating marketing performance, see our article on accounting firm lead generation metrics.

That resource explains how to connect inquiries, signed clients, and acquisition costs without relying solely on website traffic or lead volume.

Should independent firms change their marketing strategy?

Not automatically.

If your existing marketing consistently attracts suitable clients, a competitor’s acquisition is not necessarily a reason to abandon it.

Instead, review whether your messaging clearly explains the clients you serve, the services you provide, and what working with your firm involves.

If you need a broader overview of marketing channels, our article on how to market an accounting firm in the digital age covers website marketing, email, social media, and paid advertising.

Here, the more important decision is whether the changes in your local market justify targeting a different type of client.

What if remaining independent is no longer the right choice?

Growth does not have to mean remaining independent indefinitely.

Some owners may prefer organic expansion. Others may consider acquiring another practice, merging, or eventually selling.

Those decisions should reflect the owner’s goals, the firm’s financial position, and the available opportunities.

A larger competitor entering the market is a reason to review your strategy, not necessarily a reason to sell or pursue aggressive expansion.

Grow according to your firm’s strengths

Learning how to grow an accounting firm in a consolidating market starts with understanding your own business.

Private equity-backed acquisitions may change local competition, but they do not determine the future of every independent practice.

Review what competitors are actually doing, assess where your services fit, and confirm that your team can support additional clients before pursuing new opportunities.

At New Clients, Inc., we provide sales and marketing resources for accounting professionals who want to develop their practices.

Explore our Sales & Marketing Academy to learn more about the business development resources available through NCI.

FAQs

Can an accounting firm grow without private equity investment?

Yes. Independent firms can pursue growth through existing client relationships, new engagements, and service expansion. The right approach depends on profitability, available capacity, and market demand.

Are accounting firms under $2 million excluded from private equity acquisitions?

No. Smaller firms may also be acquired by PE-backed groups. Buyer interest depends on factors beyond revenue, including profitability, services, location, and strategic fit.

Does a private equity acquisition mean clients will leave the acquired firm?

No. Some clients may experience changes after an acquisition, while others may continue receiving the same services. Independent competitors should not assume client departures without evidence.

What should a small accounting firm do when a local competitor is acquired?

Review the competitor’s publicly announced changes, assess your existing client relationships, and determine whether any new opportunities fit your firm’s expertise and capacity.

Should a small CPA firm specialize to compete with larger firms?

Specialization may help when the firm has relevant expertise and sufficient demand. It is not automatically preferable to serving a broader client base. Evaluate the business case before changing your services.