2021 has been an unusual year for Draper Hinks. We had a number of practices that we were looking to sell in 2020 but were put on hold until the Covid situation calmed down. This meant that at the beginning of 2021 we were dealing with a wave of practices coming on to the market. February is always a busy time of year for us but this year we were much busier than normal.
Interestingly in the whole of 2020, despite Covid, multiples were not affected. Where deals were put on hold, the buyer did not then re-negotiate the deal in any way. The highest multiple in 2020 we received was 1.28 x fees. Whereas the highest multiple received in 2021 was 1.25 x fees. So, not a lot of difference.
To date we have done over 350 deals. We have managed to have a good year, despite everything, but we are not up to our pre-Covid turnover. However, this is better than not covering our costs as was the case in 2020. The future is looking very promising for Draper Hinks.
Period % Practices sold
January – March 18%
April – June 43%
July – September 18%
October – December 21%
We have welcomed Marie Large to our team. Diane Bester, my office manager of five years, has decided to go part time so she is job sharing with Marie. So, I now have two office managers. Marie will be a strong member of our team and is keen help maintain the professional service we offer to all.
Unfortunately, we have had to deal with a number of vendors that have suffered from the effects of over-working through 2020. Depression, mental illness, physical illness and terminal illness. We have seen it all this year. Where a vendor is suffering from a terminal illness, we will treat their sale as a priority and push the deal through as quickly as possible. In most cases the surviving life partner is not an accountant and the pressure of having to deal with the running of an accountancy practice whilst dealing with the bereavement of a loved one can often be too much. We would rather that you stayed fit and healthy please.
If you are worried about what to do in case you are seriously ill and can’t manage your practice, then I suggest you put our Draper Hinks contact details with your will with an instruction for your surviving life partner/ spouse to contact us as soon as possible. Where someone has died, clients are very understanding and retention rates are much higher. But please don’t get ill to get more money from a sale!
It can take years to decide to sell a practice. This year, one vendor got in touch after meeting with me 11 years ago. He did tell me that he would contact me when he was ready to sell and that is exactly what he did. Accountants do seem to have long memories and if someone gives me their word they tend to stick to it.
I was a bit nervous to be the keynote speaker on an ICAEW webinar in June. But it went well and I got a lot of positive feedback. I would be happy to do more webinars, just saying…
Our office in 60 Regent Street, Rugby, CV21 2PS has parking outside. We can even give you the money for the parking meter if you fancy dropping in to have a face to face chat about your situation. We will be happy to offer you a cup of tea or coffee. There are many things to think about before starting the process of selling fees and I said before it can take some time to decide when it is the right time to sell. Sometimes having someone to chat to can make up your mind to sell and go or to buy and stay. We have seen it all.
So, it now remains for me to wish you all a very successful 2022. Thank you for all the kind words from the firms we have dealt with in this last year. We have had some lovely testimonials. Please remember we are here for when you want to sell.
Please contact me at firstname.lastname@example.org. I look forward to being of assistance.