|Nicola Draper founder Draper Hinks||Hello, I’m Nicola Draper. I run Draper Hinks and have done so since 2004. We sell only accountancy fees and have completed over 315 deals.
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 firstname.lastname@example.org
|Did you know that vendors do not like complicated offers?
A complicated offer will put off a vendor.
As a buyer you need to find out what it is that the vendor wants. What is their priority? Yes, money matters but more often than not, the vendor is looking for a firm that will look after both their clients and their staff before they even consider any financial offering.
Remember, when meeting with a vendor you don’t have a second chance to make a first impression.
Vendors like a straightforward offer. Obviously the higher the multiple offered the more time the vendor will give to considering the offer. But if you break down an offer giving a different multiple for different types of clients or you offer a different amount for different work done for clients then this will put off a vendor. Their worry is how they will “police” this when the next payment is due. Vendors have looked after their clients, often for decades, and when they sell their fees, they have no say in how the buyer looks after the clients post sale. Vendors take a great leap of faith when selling their fees. As a buyer never forget this. You need to spend your time building a relationship with the vendor, so they trust you to look after their clients.
Contact Nicola Draper to know more by emailing her at email@example.com.
Round up of 2020 and Market Commentary
We started back at work in January 2020 fired up and ready to go. In 2019 we had had our best year to date and were hoping to continue the trend of year on year record number of deals and increased turnover. However, Covid 19 struck and we had to close our doors at the end of March. We were all furloughed and stayed at home. All deals were suspended, no one wanted to buy or sell fees.
We re-opened on the 15th June along with other shops and businesses. The vast majority of our clients were too busy dealing with their own client queries to have time to think about resuming negotiations. However, we did have a couple of completions in the summer.
Face to face meeting have morphed into Zoom calls. Some due diligence is still done face to face but a lot is now done electronically. We have found that multiples have not changed. We did expect them to go down, but this has not been our experience. In fact we had an offer higher than we had seen in over 3 years.
One thing we have found is that sellers are getting weary. With having to work longer than desired, many vendors just want to stop, sell and go. The number of vendors coming to us suffering from stress has gone up noticeably. This puts a pressure on reducing the time to complete the deal, which then lowers the amount being paid. But it is always better to sell and stay sane than wait and regret it afterwards. If you want to sell your fees then please contact me, Nicola Draper, at firstname.lastname@example.org or you can phone me on 01788 816440. We would like to wish you every success for 2021 and say thank you for your support in 2020.
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 4||Oct – Dec||0.9125||0.7||1.1||0.65||1.2|
|Quarter 1||Jan – Mar||1.075||0.9||1.25||0.9||1.25|
|Quarter 2||Apr – Jun||1.13||1.0||1.2||1.0||1.2|
|Quarter 3||Jul – Sep||0.9766||0.65||1.28||0.65||1.28|
Season’s Greetings from us all