At Draper Hinks we go the extra mile for all of our vendors when they are looking to sell their accountancy practice. We understand how important it is to work with someone who can listen, guide and support you through the difficult time of finding the right buyer. We have a lot of practical experience we can share with you even if you are not a first time vendor.
Are you VAT registered? If not then consider registering before marketing your practice. If you register for VAT and explain to your clients that you are having to go VAT registered, they will accept it and stay with you. If you do not do this, post completion the buyer will increase your fees by 20% straight away. A lot of clients will leave and your retention rate will suffer significantly. More buyers will be interested if you are VAT Registered.
Have you had any PI claims in the past? Why and have they been settled? It is not uncommon for us to work with a vendor that has had a PI claim. The buyer will need to know the details. Honesty is always the best policy. If you try and hide it and then the buyer finds out, you will lose all trust and the buyer may pull out.
Are you in control of your cash flow? How much WIP do you carry? What are your aged debtors standing at? You will need to know these details. We had one practice, that we sold, where the debtors was the same as the turnover, because the vendor “did not get round to invoicing his clients” so basically all the clients were getting free advice! The buyer dropped the multiple right down to take this into account.
Do you have any specialisms? If you do, then you may have to mentor the buyer post sale or even train them to be able to manage your clients. If this is the case then be prepared to work a long hand over. Depending on the specialism it may put off some buyers.
Are you on top of what needs to be done for MTD? Some buyers will not touch a practice that has not got their clients on quarterly accounting. If you haven’t done anything about it as yet, then I suggest you get on with it. The longer you leave it the fewer buyers will be willing to buy your fees.
Draper Hinks have a lot of experience of putting buyers and sellers together. We like to understand what it is that you want to achieve when you sell your practice. We work with you throughout the process and help you reach the finish line where you complete the deal and hand over the practice to the buyer. Let us help you to get your practice ready for sale to maximise your return. Contact me Nicola Draper at n.draper@draperhinks.co.uk and lets have a confidential chat. I am free most days, just drop me an email.