A round up of the year – 2019

As most of our readers know, we only deal with accountants in practice.  I am often asked why only accountants and I reply because there are enough accountants in practice looking to sell fees to keep us busy.  Admittedly, we do have a quiet time in January each year, but that gives us the time to review our marketing strategy for the forthcoming year, update the website and generally give everything an early spring clean.

To date we have done over 300 deals.  We have had our best year ever in terms of turnover and number of deals going through.   In 2019 we have brokered over 40 deals with our largest practice for sale having over £600,000 turnover. 

We like to set up a meeting day for vendors so that they can meet all interested buyers in the same day.  Yes this can be a lot of work for the vendor and they are coached by me beforehand so they are fully prepared with how to manage the meeting day.  I do attend these meeting days when requested by the vendor and I also find them tiring. 

I would be very interested to know why it is that an accountancy practice for sale can have a value to one buyer of 0.39 x fees and yet the same accountancy practice can be worth 0.95 x fees to another?  These valuations are rather far apart and yes, this is an actual example.  I have stopped trying to predict what a buyer will offer for a practice.  However the overall prevailing rate is still around the 1 x fees.  The average income multiple paid in 2019 was 1.1 x fees.  The highest offer was 1.4 x fees and the lowest offer was 0.39 x fees.

I was accused by one vendor of having the power to control the market.  He wanted between 1.7 x fees and 2 x fees for his small practice in the North West of England.  I told him he would not get that so he refused to work with me. I wished him all the best and hoped he got a good price for his fees.

We sold a practice where the vendor dictated his emails to his secretary for her to type, another practice had manual systems, literally written by hand, another vendor had no idea how many clients he had nor did he have any clue about his turnover and yes he was a qualified accountant.  We have had to send solicitors letters out to two qualified accountants for non-payment of our invoices and are in the process of taking a chartered accountant to court for the same.  We really should not have bad debts, working with accountants, but we do.  Some firms are really bad at paying within the terms of our invoices, but I know that to be a complaint of all small businesses. How many times have you heard “Cash flow is king”.

One vendor sold a block of fees only to find the buyer had lost over 40% of the clients in the first year so, the second tranche payment was nil.   Normal retention is usually around 90% so, as a buyer, to lose 40% in a year, you have to try really hard to upset the clients.  Unfortunately the vendor has no redress. 


Period % Practices sold
January – March 27%
April – June 41%
July – September  16%
October – December 16%
Average time from enquiry to completion 12 months
Average time from instruction to completion 7 months
Longest time from instruction to completion 24 months
Shortest time from instruction to completion 2 months

We had one practice in the South East that took over 2 years to sell.  The vendor would not sell his fees unless the buyer took on all his staff.  Most buyers did not to take on the staff due to the length of service they had with the firm being sold.  We would not give up.  We tried on several occasions to find a buyer and eventually we did.  Both buyer and seller are very happy with the outcome.

We have had to sell a couple of practices where the vendor had died.  This makes things difficult for all parties but we aim to be totally professional at all times dealing with matters with compassion and care.  Running an accountancy practice can be very stressful with all the deadlines that have to be adhered to.  One vendor had had a heart attack and one vendor had been diagnosed with brain cancer.  Perhaps being an accountant should come with a health warning? 

And finally we moved into our new office on the 4th September 2019.  Anyone reading this blog is welcome to come in for a cup of tea and chat if ever they are passing through Rugby in Warwickshire. We are at 60 Regent Street, CV21 2PS.  We may not have your favourite biscuits but the kettle will be on. 

As we have had another best year ever, I would like to thank everyone for supporting Draper Hinks and making us so successful.  We are all very proud of what we have achieved and we get lovely testimonials from our vendors thanking us for our help. 

We are always looking to help more vendors to sell their fees.  If you are thinking of selling your accountancy fees, then please talk to us.  If you are thinking of buying some accountancy fees, then please register with us.  We know what we are doing.  We have an enviable reputation that we work hard to maintain.

If you want to contact us to discuss your situation in confidence, then please email me, Nicola Draper, at n.draper@draperhinks.co.uk.  I look forward to being of assistance.

It just remains for us to wish you all every success in 2020.