Selling Your Accountancy Practice
When considering the sale of your accountancy practice, it is important to first understand what you are trying to achieve through the sale. If you are seeking retirement, within what timeframe do you wish to sell? If you are looking to commence a new business venture, when will you require the capital from the business sale?
Time to Sell
The time your practice will spend on the market and at the negotiation table can vary greatly, with factors such as location, size and organisational structure all proving highly influential in completion time variability. Whilst there is no hard and fast rule to accurately estimate the business sale duration, Whether the potential sale of your business is imminent or still on the horizon, its pays dividends to ensure you and your business are fully prepared for fast and efficient completions.
Size of Practice
Smaller practices with lower market values represent a viable acquisition opportunity for a much wider demographic of buyers: first time buyers looking to enter the accountancy industry, existing practice owners seeking a secondary location or large industry operators pursuing bolt-on opportunities. Conversely, larger practices will price-out many potential acquirers and require a far more intelligent marketing approach. Further, sole proprietors with total autonomy over their practice will have the prerogative to quickly progress the sale.
Clientele
Outside of practice characteristics, the most important factor that can influence the perceived attractiveness of your business is the level of evident client retention. An accountancy practice without its clients is fundamentally worthless. Therefore, ensuring that clients are retained after the point of transaction is vital to attracting a premium asking price for the business. Clients must be confident enough in your members of staff to maintain the quality of service upon your departure, and you must be able to provide evidence of this to any potential acquirer.
In addition to client retention, the quality of your clients will be scrutinised by any interested party throughout the due diligence progress. The rate at which your practice has attained new clients will be evaluated by a potential buyer; a slow growth rate in account volumes and fees may lower the value of your practice.
If the sale of your accountancy practice is now under consideration and you would like to seek further guidance, please do not hesitate to get in contact with a member of the experienced Kings team and they will be delighted to assist you.
