Draper Hinks has been closed for the best part of three months. On the 15th June it opened its doors again to new business.
Unlike all accountants, our business fell off a cliff. 99% of our deals were postponed indefinitely. We had one completion at the end of March and one completion at the beginning of May. Other than that, nothing was happening.
All staff were furloughed and we waited until there was sufficient work to be done before opening the doors again. Needless to say, we are beginning to get vendors talking to us again and deals that were postponed are beginning to build momentum again. This comes as a great comfort to us at Draper Hinks.
From speaking to a number of accountants, you have all been incredibly busy in the last few months. Some have said they have been even busier than they are in January. This has prompted one new vendor to say that the practice has to be sold and if no-one wants to buy it then the doors are going to be firmly closed in the new year. Clients will be asked to find another home. The vendor feels the need to be as far away from accountancy as possible.
Some vendors do not know what the turnover is that they are selling because they are not sure which, if any, clients have not survived the lockdown. My advice is to sell anyway. The structure of the deal, with clawback, will take into account any clients that leave within the payment term. There is always attrition. Covid-19 may or may not lead to there being a greater degree of attrition. Contracts are drawn up to take this into account.
It is unclear if multiples have been affected. I won’t be able to advise on this until we have had a number of completions. To date, no buyer has said they want to re-negotiate their offer. So I can only surmise that there has been no change. I will keep a close eye on this and make a note if this changes.
Our business is recession proof. It is not pandemic proof. But, the market place is picking up. If you want to sell your practice and want some advice then get in touch with Draper Hinks. We only deal with accountants in practice and would love to have the opportunity to talk to you.
So, if you are thinking of selling your accountancy fees, then contact me, Nicola Draper on 01788 816440 or email me at firstname.lastname@example.org. Let’s have a chat and see how we can help you to get what you want. Remember everything discussed will be kept in the strictest of confidence.