 |
Draper Hinks Newsletter February 2020 |
 Nicola Draper founder Draper Hinks
|
Hello, I’m Nicola Draper. I run Draper Hinks and this year will be our 20th Anniversary. We sell only accountancy fees and I am excited to announce that, since inception, we have completed over 300 deals.
We are very proud of our track record and our reputation. Please feel free to contact me anytime at n.draper@draperhinks.co.uk with any questions.
|
| Did you know that in 2019 Draper Hinks had its best year ever!
We brokered over 40 deals in 2019. We broke our own record and are now looking to do the same in 2020. We are aware that we have more buyers on our books than sellers. That is the way of the market. We understand that this can cause a lot of frustration for buyers who are keen to grow their practice, having both the money and resources to take on new clients. We would like to work with you to help you to find the right practice to buy. |
|||
| Here are three case studies of practices we have sold within the last 12 months:- | |||
| No. 1 | |||
| Fees sold | £616,077 | Where | Norfolk |
| Qualified | FCCA | Age | 68 |
| Time scale | 13 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 | 2 offers | Office & staff | Office and staff retained |
| Results | Vendor working with buyer for 2 years then reducing their time commitment | ||
|
No. 2 |
|||
| Fees sold | £344,000 | Where | Nottinghamshire |
| Qualified | FCCA | Age | 51 |
| Time scale | 5 months | Type of Practice | Sole Practitioner |
| Payment | 3 tranches | How paid | 50%, 25%, 25% |
| Multiple | 0.8 x fees | When paid | Comp, 12 & 24 months |
| Offers | 2 offers | Office & staff | Office closed, some staff retained |
| Results | Vendor had died thereby precipitating the sale, no handover hence reduced multiple | ||
| No. 3 | |||
| Fees sold | £200,000 | Where | Surrey |
| Qualified | FCA | Age | 64 |
| Time scale | 5 months | Type of Practice | Sole Practitioner |
| Payment | 3 tranches | How paid | 33.3%, 33.3%, 33.3% |
| Multiple | 1.1 x fees | When paid | Comp, 12 & 24 months |
| Offers | 3 offers | Office & staff | Office closed, staff transferred |
| Results | Vendor helped with hand over then happily moved away from accountancy | ||
 Diane Crawley, Office Manager |
Hello, I’m Diane Crawley and I am the Office Manager for Draper Hinks.
I work primarily with all buyers. We have various schemes we can offer to our buyers so if we can help you to grow your business please call me on 01788 816440 or email me at d.crawley@draperhinks.co.uk and I will be happy to discuss it further. |
|
Here are three testimonials from vendors that were happy with the service offered by Draper Hinks in 2019:- |
| Testimonial 1
I heard about Draper Hinks from an accountancy publication. They were very straightforward and easy to work with. The process guided me from my initial contact to the agreed sale without any problems. They offer a friendly, efficient and knowledgeable service. Using Draper Hinks definitely reduced stress levels and sped up the whole process. Vendor – Peter Wyatt FCCA West Midlands |
| Testimonial 2
I chose to work with Draper Hinks because of their excellent reputation. My experience of working with them has been very positive. They offered timely assistance throughout with expert practical support as well as considerate and kind personal support. We had prompt communication and realistic advice. Using Draper Hinks provided an expert sounding board which enabled the sale to proceed more smoothly. Vendor – Mark Hooton FCA Hampshire |
|
Testimonial 3 I was introduced to Draper Hinks by a business coach. I liked Draper Hinks and valued their advice. The admin team were great and Nicola Draper was outstanding and was always available to talk to. They were all very professional. The process was easy and not time consuming for me. Using a broker saves time and Draper Hinks has years of experience so why do it yourself. The most difficult part of selling my practice was making the decision to do so. Vendor – Jodie McDermott FCCA Warwickshire |
Practices for Sale
| Reference | Area | Amount | Description |
| 349/190808 | East Sussex | £150,000 | Two directors, both looking to retire. Two staff, one full time and one part time. Office is available on licence but this is not a condition of the sale. Buyer needs to be Chartered or Chartered Certified. |
| 346/190725 | West Midlands | £525,000 | Two directors. One looking to retire, the other wants to stay on post sale. Buyer needs to be qualified and audit registered. Fees of top 20 clients total £134,104. Meetigs to be arranged on an individual basis. |
| 323/190531 | Cumbria | £270,000 | Vendor looking to retire. 171 clients with average fee of £1,578. Top 20 clients’ fees total £113,300. Buyer must be Chartered or Chartered Certified. 4 staff (2 part time and 2 full time). Premises being retained by vendor. |
Income Multiples Paid in the last 12 months
| 2019 | Quarter | Average income multiple paid | Lowest income multiple paid | Highest income multiple paid | Lowest income multiple offered | Highest income multiple offered |
| Quarter 1 | Jan – Mar | 1.01 | 0.6 | 1.3 | 0.39 | 1.3 |
| Quarter 2 | Apr – Jun | 0.96 | 0.6 | 1.4 | 0.6 | 1.4 |
| Quarter 3 | Jul – Sep | 1.1 | 1 | 1.2 | 1 | 1.25 |
| Quarter 4 | Oct – Dec | 0.9125 | 0.7 | 1.1 | 0.65 | 1.2 |
David’s Diary 2020
After 35 years in practice I sold in September 2018 and it is only now that I feel I am nearing the point where I can take more of a back seat and catch up on those things I hoped I would be doing. That 3-day week beckons.
It was definitely the right decision to sell and to stay on. It was not as easy as I imagined but our retention rate is much higher than it would otherwise have been, we have retained at least 90% of our clients and added more referrals to compensate for the ones lost.
There have been clients who would be happy with whatever firm I sold to. Others needed reassuring. A few reacted badly to the change and one or two tried to take advantage of the move. A large majority seemed to be pleased for me and very understanding.
Whilst I have no real authority within the firm I do have an interesting day. With the transition there have been flurries of forms and letters of engagement. We have had to get them used to using the portal. Some clients forget that they may not receive a paper invoice or e-mail copy, so fall behind. I have been acting as a go-between to help maintain goodwill.
What has been interesting has been the mixed reaction to the sale. For me, the practice had become a way of life and yes there have been disappointments when a client has decided to leave but it was certainly the right decision for me. Time to smell the roses.
David Shackleton FCA – sold his practice through Draper Hinks
 |
|
Lisa Shenton, Admin Assistant
Next step
Why not arrange an appointment to come and see us at our offices in Rugby to talk about your situation and how you want to expand your practice. We can perhaps offer you some good advice. Contact Diane Crawley at d.crawley@draperhinks.co.uk or call her on 01788 816440.