We only deal with the buying and selling of accountancy fees and to date have done over 215 deals. Although our methodology is transferable to other professions, we choose to specialise in this market place. If you work with us then you know you are dealing with a broker that has a lot of experience, market knowledge and a willingness to “go the extra mile”.
Our first completion was on the first working day of the year, 3rd January 2017. Nice way for us to start the year. The vendor wanted to sell in 2017 and the buyer had resources, capacity and the time to deal with it in January. The same buyer then went on and completed on our second deal of the year on the 17th February. He then said he had his hands full and wanted to wait for a period of time to bed in the clients before considering another purchase. Understandable in the circumstance. It is unusual for us to have a completion in January but this one went through smoothly and both parties were happy.
We had 5 completions in March and 4 completions in April. All the work done for the deals that completed in March was done in 2016, but by April we were working on deals started in 2017. Interesting that we had no completions in May but it picked up in June and we had 6. The rest of the year was similar with no completions in July and then some in August. We can never predict when completions will take place.
At the beginning of the year we were all under the impression that MTD was going to be introduced and that caused there to be a flurry of practices on the market. Some vendors did not want to have to deal with MTD and so they thought it would be a good idea to find a buyer for their fees. This meant a glut of sellers with buyers being inundated with practices for sale. As a consequence the multiple for fees went down and it became hard to find buyers interested in taking on practices.
The National Managing Partner of a firm that buys from us regularly has said:-
“It’s been a year of frustration, in that many of the practices I have seen have been of poor quality or with poor quality team members. The thing that vendors seem to forget is that you still need people to run the business after they have gone and these are becoming harder to find and more expensive to invest in.
With making tax digital still on the horizon there are a variety of smaller practices for sale which do not appear to be economic when you consider the conversion costs to digitisation. There is still a hangover of tax arrangements and vendors who have sold these in the past still do not seem to recognise the potential ill will that is caused when the client has to pay up.
At the top end of the market there have been several multi-million-pound practices sold to consolidators. There has been renewed activity at the larger end of the market.”
We have had a number of vendors in their 70’s wanting to find a buyer. Some don’t want to give up work because they do not have anything they want to do post sale. Others love their work and like looking after clients and have found the thought of retiring rather unpleasant but many have been forced into the sale because of ill health. Most vendors couldn’t wait to be away from deadlines, changes in rules, CPD and the constant stream of enquires and questions from clients. The closer the completion date the happier they became.
Looking at the trends for both 2016 and 2017, most of our deal were completed in the final quarter of the year. This would tie in with most instructions coming in in March April and May and our average time from instruction to sell to completion being 6 months.
Period % Practices sold
January – March 16%
April – June 24%
July – September 24%
October – December 36%
Period % Practices sold
January – March 21%
April – June 26%
July – September 16%
October – December 37%
Average time from enquiry to completion – 8 months
Average time from instruction to completion – 6 months
Longest time from instruction to completion – 15 months
Shortest time from instruction to completion – 2 months
We have had our best year for completions and look forward to another good year next year. Thank you for all your support. Remember if you want to sell your practice or if you want to buy a practice please let us know. Please feel confident that you will be dealt with by a professional brokerage that has a lot of experience and knowledge of the market place. .
If you want to contact us to discuss your situation in confidence, then please email me, Nicola Draper, at email@example.com. I look forward to being of assistance.
Best wishes for 2018.