Make sure you are selling what you say you are selling

Most offers are based around tranche payments of the gross recurring fees (GRF).  Care has to be taken to define what are gross recurring fees but everyone does agree that one off fees are not included in the GRF.  Most vendors will look carefully at the client listing they are selling and will take off any clients that are going …

Buying fees in a rural area

We were selling an accountancy practice in the South West of England in a very rural area.   There are far fewer accountants in rural areas which automatically makes it harder for us to find an interested buyer.  Vendors understand this.  Where an accountant moves to a part of the country that is de-populated for their own lifestyle reasons, this does …

Valuation for a divorce

I have recently been asked to value an accountancy practice where the owner was going through a divorce.  It is not as simple as applying a multiple to the turnover or the EBITDA.  There are many factors that have to be taken into account when valuing a practice.  At Draper Hinks we only sell accountancy practices, this is what we …

What to put in an offer

Not all buyers have bought before so it is important to understand what should be put in an offer.   These are some of the things you, as a buyer, will need to tell the vendor:- Income multiple This will depend on how much you think the practice is worth. Number of tranche payments This usually relates to the size of …

A round up of the year – 2021

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 …

Do Your Clients Pay Monthly?

I can understand why having your clients pay on a monthly basis would be attractive when running an accountancy practice.  It helps with cash flow and, in theory, there are no bad debts.  That all makes good sense.   But you have to understand that when it comes to selling an accountancy practice, this can cause a problem to the buyer.  …

A difficult case that has recently completed

We have recently completed a case that we started marketing in November 2018.  Yes, it has taken this long for it to go through.  The fees for sale were just below the half a million mark.  The vendor started the process of selling at the end of 2018.  We sent out a mailer to potential buyers and some registered their …

Downsizing to reduce the pressure

We have all had a difficult time in the last 18 months due to Covid 19. From the Draper Hinks view point in March of 2020, we had to shut our doors for months on end.  No sellers were selling and no buyers were buying.  Our business just dropped off a cliff.  It was a very difficult time for us. …

An interesting offer recently received

At the beginning of this year we were asked to market a practice with GRF of £250,000.  We went to market in the normal way and the vendor had three firm offers, chose one and the deal has since completed. Most offers on a practice of this size would involve three payments. One on completion, one at the end of …

Main points a vendor looks for when selling an accountancy practice

I was recently approached by the ICAEW to be one of their key-note speakers on a webinar about selling an accountancy practice.  These were the main points we, at Draper Hinks, have identified over the years that are most important to a vendor. Right “fit” This is most important to all firms with a turnover below £500,000 where the personality …