| This is a case study from a practice we sold recently | |||
| Fees sold | £ 152,000 | Where | Yorkshire |
| Qualified | FCA | Age | 62 |
| Time scale | 7 months | Type of Practice | 3 Partner firm, 1 Partner retiring |
| Payment | Three tranches | How paid | 50% 25% 25% |
| Multiple | 1 x fees | When paid | Comp, 12 mths and 24 mths |
| Offers | 3 offers | Office & staff | Remaining Partners kept office & Staff |
| Results | Wife was happy the vendor sold so they could go on more holidays together | ||
We were approached by this vendor in February of last year. He was in a Partnership with two other Partners that were 15 years his junior. They did not want to sell, nor did they want to take on his clients because they were busy enough with their own clients and the regular referrals subsequently being generated.
We booked a Zoom call so that we could talk through his situation. He wanted to know if it was possible to sell a tranche of fees from a practice that was going to continue to trade and how that would work. We were able to run through the process with him assuring him that buyers would be interested in taking on his fees but that he and the remaining partners would have to sign non-compete clauses agreeing not to take back the clients after the sale (even if the sold clients asked to come back).
His first impression of Draper Hinks was “excellent” and he thought the process offered was “very good”. Having decided to sell he wanted to just get on with it. He explained that it had taken him a long time to come to terms with letting go of his practice but now that the decision had been made, he did not see the sense in hanging around. We were asked to start working on his sale straight away.
His main worry was about keeping his staff and clients happy. When asked what made him choose the buyer he sold his practice to, he said “the buyer fitted into our way of working”. This is very important. You have to look for a cultural fit. Having the same accountancy packages is always useful as well. If there are not going to be too many changes when a buyer takes over, this will not unsettle the clients and they are more likely to stay post sale, thereby helping with retention.
When considering which broker to use to sell his practice he said he chose Draper Hinks because when he spoke to Nicola Draper in the first instance, he found her to be “very helpful and he thought he could work with her”.
Working with Draper Hinks was “easy, no problem at all and very professional. The process they followed was good and worked very well”.
He was worried whether the clients would move across to the buyer. He had built a good working relationship with all of his clients and it was hard to see them transfer to another firm. Although he was keen to retire, he found it hard to pass everyone over and have someone else look after them. He prided himself on the level of service he gave to his clients and knew he would miss them, though he did not tell them that was how he felt.
When selling fees, never underestimate the emotional side to the deal. Yes, you will get paid by the buyer so there is a monetary value to the sale of the fees, but there can be quite a big emotional aspect to the deal that must not be ignored.
The vendor said that the hardest part when selling was the legals. It is not uncommon for this to be the case especially when solicitors are involved. They normally cost twice as much as expected and take three times longer than wanted. However, we would always recommend that a solicitor reviews any legal contract prior to completion, just for peace of mind.
It was a pleasure to work with both parties and to come up with a solution that both sides were happy with.
Please remember we work with vendors who sell tranches of fees as well as the whole of their practice. So, if you want to sell some accountancy fees of any amount please get in touch with me, Nicola Draper, on 01788 816440 or email me at n.draper@draperhinks.co.uk. Please feel free to book an appointment with me using this link on Calendly https://calendly.com/draper-hinks/q_a and let me see how I can be of assistance. I look forward to talking to you.