A CPA with PEO experience commands higher fees because there are only about 500 PEOs in the U.S., making that expertise rare and valuable. Paying for experience reduces onboarding time and delivers deeper knowledge, which drives higher margins, faster growth, and better EBITDA. Those financial gains translate to a higher valuation when you sell.
when we talk about the valuation side of it, there's two levers on valuation. There's the value that my customers will pay. So right now I'll give you a good example. We're looking for a new CPA and we're looking for one that has experience with PEOs. There's only 500 PEOs in America. So there can't be that many CPAs that have experience with them, right? So I know right out the jump that I'm going to pay a premium for this CPA. They're going to be more per hour than my current CPA, but I'm paying for that industry expertise so I don't have to explain the basics. Right? So there's the value to me as a customer is we've hit, you know, it's like the difference between hiring somebody with no experience or hiring somebody with some experience. You're paying the premium for the person with experience and you know that when you post the job. And so same thing happens with your vendors and partners is am I going to pay the premium for the experience? And, you know, more often than not, people are opting in. And so now you've got that compounding value that you're able to charge, which is gonna help you to get higher margins and help to grow a better, more sustainable, faster growing business with higher EBITDA, which gives you a higher multiple valuation at time of exit.
