A plant is bought for what it can produce. Firms like these are bought for a book of clients who are under no obligation to stay. Nothing is signed, nothing is pledged, and nothing stops them leaving in year two.

Which is why the valuation question here is never what the revenue was. It is how much of it is still there after the name on the door changes.

Three fee-earning firms

Each models the thing the fee base actually rests on, then prices the earnings against it. They share the same spine as the practice and industrial calculators — profile, five-year history, earnings normalization, projections, valuation and adviser notes — so learning one carries across.

CPA firm

Priced on · Recurring engagements

Compliance work recurs because the deadline recurs, which is not the same as a client choosing to stay. The question a buyer asks is how much of the fee base survives the first filing season under a new name.

Recurring compliance against project advisory
Realization, write-offs and billed against worked
Partner compensation normalized to a market wage
Client concentration and the top-ten share

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Law firm

Priced on · Matter mix

Hourly, flat fee and contingency are three different businesses sharing an office. They carry different working capital, different risk, and a buyer prices each of them separately or prices the firm wrong.

Matter mix and the contingency tail
Work in progress, receivables and the collection cycle
Originating partner dependence and referral sources
Realization against standard rates

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RIA practice

Priced on · Assets under management

Fee revenue is recurring and visible, which is why these trade on revenue multiples more readily than the others. The exposure is underneath: whose clients they are, how old they are, and what the market does to the fee base.

AUM, the fee schedule and net new assets
Client age and the shift from accumulation to drawdown
Adviser dependence and the transition period
Revenue multiple against an earnings basis

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What makes these different

Four things that separate a book of clients from a production line, and all four move the price.

The asset can resign

Nothing obliges a client to stay through a change of ownership. Retention is the single largest variable in the price, and it is the one a seller has least control over once the deal is signed.

Recurring is not contracted

An annual return and a quarterly fee recur because the obligation recurs, not because anyone promised to keep paying. That is a weaker claim than a service agreement and it should be priced as one.

The owner's pay is the earnings

Pay a working owner below market and the earnings are overstated by exactly that gap. Every calculator here normalizes to a market wage first and says which basis it is pricing, SDE or EBITDA.

There is nothing to repossess

A fit-out and some computers. With no collateral to lend against, the deal funds on cash flow and goodwill, so structure carries the risk the balance sheet cannot.

The tools that go with them

With no collateral behind the loan, the structure is doing the work that equipment does elsewhere — and the structure decides what a buyer can pay.

SBA 7(a)The program that funds goodwill, which is nearly the whole purchase price here. Ten years against earnings, with no fixed assets to lean on.Open →Entity and taxMost of these are pass-throughs, and the entity decides what the owner actually keeps. Worth settling before the price is agreed, not after.Open →

Looking for a healthcare practice or an operating business? Dental, veterinary, optometry, orthodontic and medical practices turn on whether the client list transfers in much the same way, but they are tied to a location and a license, so they live under practice finance. HVAC, restaurants and manufacturing are priced on capacity and collateral, and live under industrial finance.