April 2018 Newsletter | Draper Hinks

				Draper Hinks Newsletter April 2018
				Hello, I’m Nicola Draper. I run Draper Hinks and have done so since 2004. We sell only accountancy fees and have completed over 220 deals (five more than our last newsletter). We are very active in the market place for buying and selling accountancy practices. I deal with all the sellers, so if you are looking to sell in the near future, please email me at n.draper@draperhinks.co.uk
*Nicola Draper founder Draper Hinks*

Build your business – buy a practice
Draper Hinks is a very successful business brokerage working only with accountants in practice. We cover the whole of England and no practice is too big. If you are looking to sell or to buy fees then talk to us. We have a lot of experience and are happy to share it with you. Anything discussed will be totally confidential.
Here are three case studies of practices we have sold within the last 12 months:-
No. 1
Fees sold	£384,000		Where		Nottinghamshire
Qualified	ACCA		Age/s		54
Time scale	5 months		Type of Practice		Sole Practitioner
Payment	3 tranches		How paid		50%, 25% & 25%
Multiple	1 x fees		When paid		Comp, 12 & 24 months
Offers	3 offers		Office & staff		Office and staff retained
Results	Vendor playing more golf and not doing any accountancy work at all

No. 2
Fees sold	£240,000		Where		East Sussex
Qualified	ACA		Age		59
Time scale	3 months		Type of Practice		Sole Practitioner
Payment	3 tranches		How paid		33%, 33% & 33%
Multiple	1 x fees		When paid		Comp, 12 & 24 months
Offers	3 offers		Office & staff		Office and staff retained
Results	Vendor enjoying retirement and not having any deadlines to worry about

No. 3
Fees sold	£180,000		Where		North East
Qualified	FCCA		Age/s		56
Time scale	4 months		Type of Practice		Sole Practitioner
Payment	2 tranches		How paid		70% & 30%
Multiple	0.7 x fees		When paid		Comp & 12 months
Offers	2 offers		Office & staff		Office shut, some staff retained
Results	Vendor not well and had to sell for health reasons

		Hello, I’m Diane Crawley and I am the Office Manager for Draper Hinks. If you are a buyer, we want to hear from you. We want to know where you want to buy and many other details to make sure we can contact you when we have an opportunity that may be of interest to you. So please call me on 01788 816440 or email me at d.crawley@draperhinks.co.uk.
*Diane Crawley, Office Manager*

Here are three testimonials from vendors that were happy with the service offered by Draper Hinks in 2017:-
Testimonial 1 “I heard about Draper Hinks from an email. I met with Nicola and had a good initial meeting. I have found working with Draper Hinks to be very positive. The process followed was clear and straight forward. Nicola was very helpful. Selling your practice is too important an asset for DIY.” Vendor – Ashley Fox East Sussex
Testimonial 2 “I had some mail shots from Draper Hinks. I found working with Draper Hinks to be very helpful leading to a very successful outcome. We had a prompt response to our initial enquiry and received some helpful advice. The process is very professionally organised. Using a broker takes away the stress and it takes the transaction to a professional level.” Vendor – Norman Revill ACIB Birmingham
Testimonial 3 “I received mail shots from Draper Hinks over the years. I have found working with them to be straight forward and a pleasant experience. First impression was that they were efficient, thorough and had an eye for detail. They gave me expert guidance which I am so grateful to have had. They held my hand every step of the way. It always pays to take expert advice from experienced professionals who have done it before.” Vendor – Mark O’Brien FCA Oxfordshire

Practices for Sale

Reference

Area

Amount

Description

223/180409

County Durham

£90,000

Vendor looking to retire. Average fee £600. Meetings with the vendor Tuesday, 1^st May.

221/180326

North Yorkshire

£60,000

Vendor looking to retire. No premises or staff so fees can be moved to your office locally. The practice is VAT registered. Top 10 clients’ fees total over £21k.

218/180315

Dorset

£155,000

Vendor looking to retire. Leasehold office available at £4k p.a. rent. Top 20 clients’ fees total over £69k.

216/180312

Ruthland

£300,000

Vendor looking to retire. 12 members of staff. Top 20 clients’ fees total £52,100. Buyer needs to be qualified.

Income Multiples Paid in the last 12 months

2017	Quarter	Average income multiple paid	Lowest income multiple paid	Highest income multiple paid
Quarter 2	Apr – Jun	0.96	0.7	1.05
Qaurter 3	Jul – Sep	1.01	0.5	1.1
Quarter 4	Oct – Dec	0.91	0.5	1.1
2018 -Quarter 1	Jan – Mar	0.85	0.4*	1

*0.4 x fees offered for small practice where vendor had died and the deal had to be done very quickly. Obviously there was no handover so the multiple came right down. This has had an effect on the average income multiple paid for the quarter.

Current News

MTD will affect the market place this year. Vendors that do not want to embrace MTD will want to sell their fees. This happened in 2017, when MTD was due to be introduced, but was delayed by the announcement of the general election. We witnessed an influx of practices for sale which caused income multiples to dip. We have seen this before and want you to be ready to take advantage of what is on the market when it comes up.

FAQ of the month

Q: Why do buyers offer different multiples?

A: All buyers will look at the worth to them of the practice for sale. They will assess the potential return to be made on the fees being bought taking into account things such as the amount of fees being sold, age of the client base, systems used, transferability of the information from the vendor’s system to their own system, fees charged by the vendor and amount of any gap between that and their own charge out rate, geographic spread of the client base, available money that can be used and amount of money to be borrowed to finance the deal, available personnel that can oversee the acquisition and then who will manage the client base post sale etc.

These are only some of the points that buyers will have to consider and so you can see why there can be a number of different multiples offered by buyers.

Complimentary comment

I don’t often say this but just to say that’s a very good newsletter compared to most of the daily spam type emails I get. Informative and succinct relevant information. Well done.

Please feel free to send us your comments, especially if they are complimentary. We appreciate you taking the time to send us any feedback.

Lisa Watson, Admin Assistant

Hello, I’m Lisa Watson and I am an Admin Assistant at Draper Hinks. I am the person that will be sending these regular Newsletters to you so look out for emails from me in future.

I am the person to notify if you wish to update your records.

Please email me at l.watson@draperhinks.co.uk stating:

Ø Please remove me from all Draper Hinks correspondence

Ø Please remove me from the Draper Hinks Newsletter but continue to let me know of buying opportunities in my area.

Next step

We want to hear from you if you want to sell or buy fees.

If you are looking to sell your fees then email Nicola at n.draper@draperhinks.co.uk.

If you are looking to buy fees then email Diane at d.crawley@draperhinks.co.uk.