This is a case study from a practice we sold in 2023 | |||
Fees sold | £ 64,700 | Where | Gloucestershire |
Qualified | QBE | Age | 59 |
Time scale | 4 months | Type of Practice | Sole Practitioner |
Payment | Two tranches | How paid | 50% & 50% |
Multiple | 0.95x fees | When paid | Comp and 12 months |
Offers | 3 offers | Office & staff | No office and no staff |
Results | The buyer was very nervous about buying so the vendor stayed on for a year to help |
This vendor booked a phone appointment to discuss her situation. She was very nervous about the thought of selling her practice and wanted to have a lot of reassurance from us that we could find a suitable buyer for her.
She had been approached by a local firm of accountants previously who had said they were interested in buying her practice and she had had a couple of meetings with them but things had gone very quiet. She did not like the lack of communication and the hanging around. So she contacted us to book a time to speak to Nicola to see how Draper Hinks could help.
The process was explained to her and she was happy to proceed. The paperwork was sent out for completion and was duly completed and sent back. It was really important to her that she liked the buyer. She knew that her clients would want to have someone they could talk to and that that would help with retention.
We marketed her practice and we set up five meetings with potential buyers on the Meeting Day. Before she met with any of these buyers she had a Coaching Call with Nicola. The Coaching Call is to prepare the vendor for the meetings with the buyers. Nicola will discuss the different ways in which a deal can be structured, she will give guidance on the types of questions to ask the buyer, time scales for when the offer should be in by etc, etc. All vendors find this Coaching Call really helpful.
The vendor had asked for the meetings to be held on a face to face basis. She was the host for the day so she let us know where she wanted to hold these meetings. All buyers were informed of the time, place and duration of the meeting. It was a long day but also very productive.
Of the five buyers that the vendor met, three put in offers. The vendor said that each buyer would be ideal for her clients and she liked each one a lot. The offers did not differ a great deal in monetary terms, but she decided to accept the offer from the buyer that was most anxious and nervous. The vendor had a lot of empathy for the buyer, she said that she was like that when she first started out so she wanted to give the buyer a chance.
The vendor turned down more money to sell to her preferred buyer. She was happy to stay on in a consulting capacity post sale for up to 12 months. Her role during this hand over was to still do a lot of the work, train the buyer as to how to manage her clients, how to run a much bigger firm and between them they made it work really well.
It is unusual to have a seller that sells to a buyer where the seller has to get so involved post sale. It really was a case of the seller teaching the buyer how to manage and run the practice. Turning down a higher offer is not uncommon to get a better “fit”. We were just very happy both parties wanted to make it work and were committed to making a success of it.
If you want to sell an accountancy practice or buy an accountancy practice please get in touch with me, Nicola Draper, on 01788 816440 or email me at n.draper@draperhinks.co.uk. Let me see how I can be of assistance. I look forward to talking to you.