Most accountants find the decision to sell their practice a very difficult decision to make. If it is forced upon you by personal circumstances or by serious health issues then you often don’t have the time to think about it. You have to get on with and make the most of a bad situation. But if you have time to consider and reflect, then there are several things you can do prior to marketing your fees.
Try and review everything from the point of view of the buyer who is potentially seeing your practice for the first time and with a fresh set of eyes. Is your office tidy and everything in its place or is everything everywhere? Some people say a tidy desk is a tidy mind. But it could be you have a tidy desk because you are going through a quiet time at work and are not busy, or you have too few clients, or your desk is tidy but the room next door is piled high with papers floor to ceiling. Anyway, back to the point….. Keeping on top of paperwork, work in progress, emails etc etc is very important. A buyer will soon find out if you are not in control of your work flow.
You will have some clients that leave everything to the last minute and expect you to work miracles getting things done on time. A buyer will not be able to differentiate between your clients. So, this behaviour may not be tolerated as easily as you have done in the past. Incomplete records, how many clients do you have like this? What about having the required ID documents on file and the signed GDPR forms? Have you had a QAD visit recently and have you implemented all the recommendations? These things matter. Do you have clients that always pay late?
Are your premises leased or owned? If leased, is there a current lease or has it expired? When was it last reviewed, is the review overdue? If there is a long lease, is there a break clause and when is it? Do you have to give notice and when is that due? If there is not a break clause in a lease with more than two years left on the lease, this could cause a problem and put buyers off. One potential vendor approached us about selling her practice and she had signed a 20 year lease in London without a break clause. We could not sell the practice, no buyer would touch it.
If you own the property, are you looking to sell or rent to the buyer? If you want the buyer to buy your property you will need to have an idea of current valuation. If you want to rent out your property you need to have an idea of current market rates for renting.
Client Files must be up to date and in order. Do you work on paper files or is your office paperless? If you work on paper files and have filing cabinets and lever arch files, make sure they are all in order. We sold a practice where the deal completed and the buyer turned up to pick up the paper files only to find that the working papers had all been dumped in bin liners! No the buyer was not happy and yes it did affect what was paid and when.
Remember you do not get a second chance to make a first impression. If you want to sell an accountancy practice or buy an accountancy practice and need to have some down to earth practical advice, please get in touch with me, Nicola Draper, on 01788 816440 or email me at email@example.com and let me help you.