Building future leaders: Mike Sylvester on selling to private equity and the current state of the accounting profession

Running an accounting firm today demands more than expertise; it requires adaptability and vision. Mike Sylvester, CPA and owner of SBS CPA Group, leads a team that averages 1,904 annual work hours — proof that an accounting career doesn’t have to mean burnout.

Despite this, Mike’s journey to becoming a successful CPA and managing partner was far from typical. Starting as an electrician, then a reactor operator on a nuclear submarine, Mike’s tool-focused background, as he puts it, gives him a unique perspective on accounting.

Mike believes in efficiency, work-life balance, and saying it like it is — one reason he has more than 9,000 followers on X. Recently, Mike announced his 2029 retirement with a five-year plan to groom staff as successors — instead of selling his firm to private equity, something Mike is against — desiring to ensure the best for his clients and staff.

At TaxDome, we were instantly intrigued. 

TaxDome co-founder and chief product officer Ilya Radzinsky sat down with Mike to discuss this plan and hear Mike’s insights into pressing issues within the industry. The key takeaways:

• Mike plans to retire in 2029 at age 62 and has a clear plan to groom successors within his firm. For firm owners, he stresses planning for retirement well in advance.
• Transitioning a firm to family is less common, as there is a reduced interest in the profession due to long hours and stress.
• Investors want firms that have modern technology, younger staff, and year-round work.
• AI gives firms a competitive edge. AI enhances efficiency but won’t replace accountants, especially those with strong client relationships — a key differentiator for smaller firms.
• Retaining and attracting talent requires effective staff training and a culture of open communication.

The rising PE acquisition of accounting firms

The US accountant shortage, driven by the “silver tsunami” and declining interest in the profession — with recent projections showing a potential deficit of up to 3.5 million accountants — is complicating efforts to transfer leadership and expertise to the next generation. For firm owners approaching retirement, the need for a well-thought-out exit strategy has never been more crucial. 

Among the options, selling to private equity (PE) has emerged as an attractive route offering various benefits. Approximately $2 trillion in uncalled capital is poised to drive mergers and acquisitions (M&A) opportunities in 2025, with an increasing number of venture capitalists targeting accounting firms.

But what exactly does selling to PE entail for firm owners? And what are the implications?

Drawing on valuable insights from Mike, this article examines the rising trend of private equity acquisitions, the realities of life as a CPA, the transformative impact of AI, and how strengthening client and staff relationships has become more important than ever.

Retiring as a firm owner — what are your options?

If you’re a firm owner approaching retirement, deciding what comes next for your business isn’t always simple. This decision isn’t just financial; it can also be personal — after all, your firm can represent years of hard work, achievements, and relationships. 

“The problem is too many people are going down the unplanned route,” Mike explained. “You need to plan for your exit.”

So, what are your options?

• Sell your firm to a bigger firm or private equity investor
• Groom staff as your successors
• Transition your firm to family
• Close your firm

Hear Mike talk about these options, his retirement plan, and the importance of preparing well in advance.

—> Video highlight: jump to Mike talking about retirement options for firm owners

Selling your firm to private equity

The pros and cons

The pros of selling to private equity:

• Access to capital for growth and expansion
• Increased valuation through private equity expertise and resources
• Risk mitigation by sharing risks with a larger entity
• Easier exit process, often with a substantial payoff

The cons of selling to private equity:

• Loss of control over decision-making and direction
• Short-term focus if quick returns are prioritized over long-term growth
• Staff retention risks from cost-cutting or growth targets
• Client retention risks from changes in employees, pricing, or services

Understanding the trade-offs is key to making the right decision. While selling to private equity can be appealing, it’s worth considering whether it aligns with your values, goals, and vision for your firm’s future.

Mike, who intends to pass his firm to staff, has strong opinions on the drawbacks. For one, he highlighted that private equity companies aim to make between 14% and 21% on the investment — a percentage that’s increased over time, reducing the share partners receive.

The potential impact on staff and clients

Selling to private equity doesn’t just affect ownership; it can also have a negative ripple effect on employee and client satisfaction.

When discussing the impact on staff and clients, Mike raised a noteworthy point: private equity firms often take over without fully understanding the relationships the firm’s staff have built with their clients. 

For Mike, strong client relationships are crucial. Without maintaining these connections post-acquisition, client churn can increase, potentially destabilizing a firm’s future.

—> Video highlight: jump to Mike talking about the potential impact on staff and clients after PE acquires a firm

What makes a firm attractive to buyers?

Mike has talked with well over a hundred firms about buying and selling firms, most within the last two years. When we asked Mike what makes a firm attractive to investors, he answered: “The firms that people don’t want is what’s easier to talk about. People don’t want firms with a lot of paper anymore. People don’t want firms where the average employee is over sixty-five.” 

—> Video highlight: jump to Mike listing the various factors involved, including the qualities buyers look for

Collectively and interdependently, these qualities — such as effective implementation of technology, a younger workforce, year-round work, and organized processes — are indicative of a firm’s ability to adapt and grow in a competitive market, signaling a better return on investment.

Retiring and managing the transition

Whether grooming successors or selling your firm, one key challenge lies in overcoming the fear of navigating the transition.

“I believe the fear is correct,” Mike said when we asked him whether the fear is justified. Despite that, he added, “I believe the fear is overblown. I think you can get around it.”

People think if I transition my staff to being the front person, I’m going to lose most of my clients. You’re not. You’re going to lose a minority of your clients if you do it right.

On announcing his retirement and transitioning his long-term clients, Mike admitted, “It has been really hard… For new clients, it’s easier, right? Because you set the expectation. It’s harder for clients you’ve had for twenty years.” 

However, for firm owners looking to retire, whether that involves passing the firm on to a successor or selling, Mike believes it’s a necessary decision to better your life.

The CPA profession: insights and realities

Career path options

“The split in accounting is between public and private,” Mike commented when we asked him about the traditional career paths in accounting.

If you’re entering the field or seeking new opportunities, choosing between the two can depend on long-term goals, preferred work environment, and whether you value variety and challenge or stability and specialization:

>> See the requirements, cost, time to certification, and more for becoming a CPA

Public accounting vs private accounting — the pros and cons 

“The number of people who become partners at the Big Four is tiny as a percentage of the people who enter,” Mike told us, highlighting that promotions can be more difficult in private accounting. For public accounting, it’s the opposite: “The number of people who become partners at smaller firms is much, much higher because it’s less competitive. There’s less laying off of people. It’s a different process.”

See a comparison of the pros and cons of public and private accounting:

Current quality-of-life issues within the accounting profession

The accounting industry’s ongoing quality-of-life crisis is discouraging younger generations from pursuing accounting — one factor contributing to the growing talent shortage.

Stress and a lack of work-life balance, particularly during tax season, are synonymous with the profession. A 2024 report by the Center of Accounting Transformation found that 68% of accounting professionals experience burnout. 

>> Work-life balance for accountants: 7 strategies to achieve well-being and success

These issues are clashing with the attitudes of Gen Zs and millennials, who prioritize work-life balance and health. Mike remarked, “My generation worked more than you. That doesn’t make you wrong.” For Mike, this prioritization is smart, regarding the long hours as the core of the issue.

—> Video highlight: jump to Mike talking about the issue of long hours in accounting

Needed quality-of-life improvements in accounting 

According to the National Pipeline Advisory Group’s Accounting Talent Strategy Report, which analyzed the root causes of the talent shortage, the solutions for retaining and attracting talent may lie in a collective industry effort to:

• Make the academic experience more engaging by ensuring better resources and training are available to educators and students
• Address the time and cost of education to make the CPA license more accessible through experiential learning and its recognition for licensure
• Grow support for CPA Exam candidates by evaluating the testing experience, cost, timeframe, application process, content, and format
• Expand access for underrepresented groups to build interest in accounting careers
• Enhance the employee experience through manageable workloads and clearer advancement opportunities
• Tell a more compelling story around the profession that’s balanced, diverse, and ultimately more positive

For firm owners, fostering a supportive, tech-forward work culture can help retain talent. This can be achieved through workplace initiatives such as: 

• Reducing overwork through realistic workloads and ample staff
• Providing flexible work arrangements that promote work-life balance such as remote setups and compressed workweeks
• Modernizing processes by implementing software that improves efficiency through automation and AI
• Offering meaningful work such as projects or clients that align with staff interests
• Offering competitive compensation and attractive benefits
• Detailing clear advancement opportunities, coupled with mentorship and training programs

Mike made a point of how his team’s lower-than-average hours help in the hiring of staff: 

My firm is different because my staff work, on average, 1,904 hours a year — and they have the entire life of my firm. My staff don’t work 2,300 hours. So at most firms today, people can’t hire. And it’s a huge problem, right? I can hire. Because I just show them what hours we work, and they’re like, ‘Really, are you serious? Is this a joke?’ And then they come and they work.

The role of AI in the accounting industry

Artificial intelligence (AI) is emerging as a change-maker, now and for the future. By improving efficiency, AI in accounting is addressing the profession’s biggest issues — excessive hours, burnout, and a lack of work-life balance — giving accountants more time to focus on higher-value work, personal well-being, and self-development while positioning accounting as a more attractive career choice for younger generations.

Additionally, AI is helping accountants improve data accuracy, reduce errors, and provide deeper financial insights to clients. This enhanced client experience allows accountants to charge higher, with more than 50% of firms set to raise prices in 2025, likely opting for value-based or fixed pricing.

While there are concerns about AI replacing accountants, many industry experts — including Mike — agree that AI is more likely to enhance the profession. 

—> Video highlight: jump to Mike talking about why AI will give accountants a competitive edge

Strengthening client relationships: the importance of providing value

Relationship-based service has become a key differentiator in today’s competitive market. By offering personalized support and tailored solutions, firms can strengthen client relationships, boosting satisfaction and retention.

TaxDome’s recent report, 2024 Client Satisfaction: What Taxpayers Expect from Their Accountants, found that 84% of clients value a personalized approach to their tax strategy.

Mike describes his firm as relationship-based, seeing it as a significant advantage over larger firms that lack personalized service. A few ways Mike fosters strong client relationships are by ensuring consistent staff-client assignments, listening to client feedback, and streamlining low-value clients — something Mike views as necessary, especially for smaller firms.

—> Video highlight: jump to Mike talking about why firm-client relationships can fail and the advantages of letting go of low-value clients

Strengthening staff relationships: the importance of open communication 

As concerns about stress and burnout continue to grow for accountants, open communication about work expectations, hours, process improvements, and compensation has become increasingly important. 

For Mike, collaborative communication is a cornerstone of his firm’s success. He holds staff meetings to address their concerns, even going as far as asking which clients they dislike. 

I ask my staff [which clients] they want to fire. We have meetings about this twice a year. Did this person irritate you? Is this person hard to deal with? And we follow through. We may not fire all of them, but we fire most of them.

—> Video highlight: jump to Mike talking about how he promotes open communication with staff 

Through similar approaches, firm owners can foster a culture where values align, staff feel appreciated, and constructive feedback prompts continuous improvement. This builds an environment of mutual respect and trust that boosts morale and productivity — ultimately driving better outcomes for staff, clients, and the firm.

Connect with Mike

Mike doesn’t just advocate open communication and collaboration within his firm; he extends it to The Collaboration Room, an online community for accounting, bookkeeping, and tax professionals — boasting more than 185 members — that he co-runs with fellow CPA Rebecca Driscoll. “We have a community. It’s going great. It’s a lot of fun.”

If you’re seeking mentorship, engaging group discussions, a strong sense of community — or simply want to hear more from Mike — join The Collaboration Room. You can also sign up for the free monthly newsletter.

For everything else, including humorous accounting anecdotes to straight-shooting industry commentary, be sure to follow Mike on X.

It was an absolute pleasure speaking with Mike. We wish him all the best, both now and in his retirement. (5/15/29 — yes, Mike, we took note!)