Small but Mighty: The Strategic Power of the $5-10 Million CPA Firm

By Ira Rosenbloom, CPA (inactive)

As consolidation continues to reshape the accounting profession, the $5–10 million revenue tier has emerged as a critical inflection point. Once considered a transitional phase between small and large firm status, this segment is now recognized as a strategic stronghold — both for firms seeking sustainable independence and for those positioning themselves as attractive acquisition targets.

Whether driven by private equity (PE), mergers and acquisitions (M&A), or other capital investments, the current wave of consolidation has disproportionately impacted firms with 20–50 professionals — many of which fall within the $5–10 million range.

Ironically, these are the very firms now being sought after as “platform firms” by acquirers looking to establish scalable, growth-ready operations.

But the advantages of reaching this size extend far beyond M&A appeal. For firms focused on long-term growth, talent development, and market relevance, the $5–10 million tier offers a compelling combination of scale, agility and strategic optionality.

Operational maturity and scalable infrastructure

Firms in this revenue band are uniquely positioned to invest in robust operational infrastructure. With sufficient resources to support dedicated roles such as firm administrators, HR directors, marketing leads, and IT managers, these firms can shift administrative burdens away from partners and client-facing professionals.

In that regard, having dedicated professionals doing what they do best not only becomes more efficiently operationally, it creates a more attainable and sustainable “bench” team as the firm grows.

This operational maturity enhances scalability, improves internal efficiency, and fosters a culture of accountability and mentorship. It also enables firms to deliver a more consistent client experience while supporting the professional development expectations of today’s workforce.

Specialized expertise and market differentiation

The $5–10 million threshold often marks the point at which firms can support niche practices and develop internal subject matter experts. This specialization not only enhances client service but also strengthens the firm’s brand, marketing strategy, and pricing power.

By cultivating deep expertise in targeted industries or service lines such as construction, health care, valuation, or client accounting services (CAS), firms can position themselves as trusted advisors rather than transactional service providers.

Talent attraction and professional visibility

Mid-sized firms enjoy a distinct advantage in the talent marketplace. Their size allows them to offer structured career paths, competitive compensation, and a defined culture — attributes that resonate with high-performing professionals seeking both growth and stability.

Moreover, these firms are more likely to qualify for membership in exclusive CPA alliances and associations, unlocking access to benchmarking tools, training resources, and national networking opportunities. As PE-backed firms internalize their recruiting functions, independent recruiters are increasingly turning to mid-sized firms to maintain their pipeline, further enhancing visibility and access to top talent.

Service diversification and ownership innovation

At this scale, firms can confidently expand into non-traditional service areas like HR consulting, financial planning, technology enablement, and advisory services. These offerings not only meet evolving client demands but also create new revenue streams and cross-selling opportunities.

A firm with diversified services may also help attract new talent, especially younger professionals.

Importantly, the $5–10 million tier also enables more flexible ownership structures. Firms can offer equity to leaders in non-CPA disciplines, aligning incentives and fostering long-term commitment. This model supports a multidisciplinary approach to client service while reinforcing accountability and succession planning.

Also, as the service offerings evolve, these “platform firms” can emulate the alternative practice structure used by PE while continuing to possess a smaller firm culture.

Client alignment and market positioning

For closely held businesses, mid-sized CPA firms offer an optimal balance of personalized service and technical capability. They are large enough to handle complex needs yet small enough to maintain continuity and relationship depth.

As larger firms consolidate and adopt more bureaucratic models, many clients are seeking alternatives that offer responsiveness, transparency and value. This client migration presents a strategic opportunity for $5–10 million firms to upgrade their client base, focus on higher-margin engagements, and shed legacy accounts that no longer align with their strategic direction.

Meaningful partner impact

In firms of 25 to 50 professionals, partners retain significant influence over strategic decisions, culture and client relationships. Unlike in mega-firms, where decision-making is often diluted, partners in mid-sized firms can see their ideas implemented and directly benefit from the firm’s growth.

This level of engagement fosters a sense of ownership, autonomy and purpose that is increasingly rare in larger organizations. For professionals who value legacy, leadership and lifestyle, the mid-sized model offers a compelling alternative.

Community integration and brand equity

Mid-sized firms are often deeply embedded in their local communities, participating in civic leadership, financial literacy initiatives and philanthropic efforts. These activities not only reinforce the firm’s brand but also enhance employee engagement and client loyalty.

Community investment translates into reputational capital — positioning the firm as a trusted resource for both clients and emerging enterprises.

In addition, local banks, attorneys and other professionals often seek out other community-oriented businesses, which can reap rewards in terms of referral sources and the kinds of attractive clients that appreciate the community connection.

A platform for sustainable growth

An accounting firm can reach the $5-10 million threshold in a number of ways — through organic growth, adding new service offerings, or M&A.

When merging with or acquiring another firm, there must be a clear set of objectives. Firms should find the right target partner, understand the competitive landscape and market valuations, and be able to know or predict staff and client satisfaction and retention issues. An outside consultant can help guide the process successfully.

Whichever way a firm chooses to grow, one thing is clear: In an era defined by disruption and consolidation, the $5–10 million firm is no longer a midpoint — it is a strategic destination.

Whether the goal is to remain independent, attract strategic investment, or build a legacy firm, this tier offers the infrastructure, flexibility and market presence to thrive.

For accounting firms navigating the future, reaching this scale is not merely a milestone. It is a launchpad for enduring success.

Ira S. Rosenbloom, CPA (inactive), is the CEO of Optimum Strategies, a highly active succession and practice management consulting organization, which focuses on CPA firms of 15–150 people across the Mid-Atlantic region.  Known for his high-touch, relationship-driven approach, Ira ensures firm leaders feel confident, supported, and fully prepared at every step of their M&A or succession journey.