If you are considering selling your CPA, accounting or tax practice shortly, there are some things that you can do to increase the overall value of your practice thus generally yielding a higher net for you at closing.
Choose an Experienced and Qualified Professional – A professional accounting broker can increase the buyer pool and create more of a desire for your practice. Everyone understands the theory of supply and demand. In the accounting practice sales industry, there are much more buyers than sellers. If you are trying to sell on your own, it will be difficult to market your practice while keeping your confidentiality from your staff, competition and most importantly clients. While it is true, there is a fee for hiring a broker, in the end, they will likely net you a larger price at closing. It makes sense to let them help you and do all the work to sell your practice especially if they can increase the price and fatten your wallet.
Choose a specialized broker to assist you in selling your accounting practice – There are brokers out there that are dedicated to the accounting practice sales profession and understand the market. A general business broker selling franchises, gas stations, etc. may not understand the accounting profession and may not fully comprehend all the important factors that go into selling an accounting practice.
Position Your Practice To Sell – Make sure that your office is clean and organized. Everyone knows about first impressions. If your office is disorderly and dirty, this can be perceived negatively by the buyer even before they have said a word to you or looked more closely at your financial records.
Set Realistic Price & Terms – Most accounting practices are sold based on a client retention clause. Sellers may want to sell their practice based on a fixed price, but that will not happen. The buyer is looking for some reassurances that the seller is not just interested in the money and is also interested in the clients and new buyers needs. There are some buyers that will not even entertain a fixed asking price. This will also shrink your buyer pool. If the buyer is qualified and a good fit for the practice, there should be minimal client drop off during the transition period.
Organize Your Financial Records – A firm that has current financials will appear to the buyer as organized and will help them in justifying the asking price and moving forward with the purchase. This will also allow them to tie back their projections with what is going on. Being able to tie the financials back to the tax return will be part of the due diligence phase, but it will alleviate a lot of headaches and save a lot of time down the road. You can have an oral agreement or letter of intent from a buyer, but without proper due diligence and accurate financial records, the buyer may walk. This means the seller and buyer have wasted precious time and closed off negotiations with other possible buyers.
Business As Usual – We always urge our clients to maintain a “business as usual” approach during the selling process. Typically an accounting practice will sell in anywhere from 3 to 6 months. During this time, the seller needs to continue to run their business as if nothing has changed. If the staff or clients get a whiff of a potential sell, it could be disastrous for the firm and the future of the firm.
Keep Your Options Open – Many sellers have a preconceived idea of who they think their buyer will be. While sometimes this may be accurate, a lot of the time, their vision may be inaccurate. Do not eliminate a possible candidate just because they currently run a small practice or too large of practice. Many times, finding the right buyer means finding the right personality.
Sell Your Practice – The seller needs to portray their practice as a solid investment and opportunity for, the buyers. They need to convey some opportunities and some of the unique perks of the practice that may not be available for all practices. The buyer needs to feel good about purchasing the opportunity as well as the numbers.
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