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Nicola Draper Founder of Draper HInks |
We are getting to that time of year when vendors, looking to sell now, are having to consider a completion date in March or even April next year. If you want to complete before then you may find you have to accept a reduced multiple. If you are concerned about how that could affect you, then please get in touch.
It is important to talk to someone who understands the current market place. We are able to give advice as to when is a good time to start the process of selling your practice. You can contact me at n.draper@draperhinks.co.uk
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We have seen most scenarios when it comes to selling an accountancy practice
There are two main ways to be paid when selling an accountancy practice. The first and most common is where a buyer pays in tranches. The industry norm is for the buyer to pay a third on completion of the deal, a third at the end of the first 12 months (subject to retention) and a third at the end of next 12 months (again – subject to retention). The other way is for the buyer to pay out of fees received, which is called an earn out. This is where, after completion has taken place, the buyer does the work for the client, the buyer invoices for the work, the client pays the buyer and the buyer gives an agreed percentage of that fee to the vendor ie 50% over 2 years or 33.3% over 3 years etc.
However, for the first time in over 21 years of running Draper Hinks, in the last 12 months I have seen offers on 2 different occasions, from different buyers in different parts of the country, add a caveat into their offer saying if retention is not more than 80% at the end of the 2nd year then no further payment will be made. Neither of these offers were accepted by the vendors and I would suggest this is not a trend that will ever be acceptable.
Sometimes you have to sell very quickly
Read this Vendor’s Story with details of multiple paid
Details of another deal done in 2024
| Fees sold | £205,109 | Where | Leicestershire |
| Qualified | FCA MA | Age | 56 |
| Time scale | 7 months | Type of Practice | Sole Practitioner |
| Payment | 2 tranches | How paid | 50% & 50% |
| Multiple | 1.1 x fees | When paid | Completion & 12 months |
| Offers | 2 offers | Office & staff | Office closed, staff retained |
| Results | After handover, vendor worked on his other business interests | ||
Income Multiples Paid in the last 12 months
| 2024 | 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 | 0.988 | 0.65* | 1.15 | 0.65 | 1.195 |
| 2025 | ||||||
| Quarter 1 | Jan – Mar | 1.06 | 0.50* | 1.20 | 0.50 | 1.20 |
| Quarter 2 | Apr – Jun | 1.016 | 0.85 | 1.20 | 0.50 | 1.20 |
| Quarter 3 | Jul – Sept | 1.021 | 0.57* | 1.20 | 0.57 | 1.20 |
NB None of the above figures are to be reproduced in any way without express permission from Nicola Draper.
* One off payment made on completion with no clawback.
Your Guide to Selling
We have been helping accountants sell and buy practices for more than 20 years, and during that time we’ve learnt so much. We have collated all of our knowledge and experience into our new eBook, which is the ultimate guide to selling accountancy fees. You can download your copy from our website for free.
Here is a testimonial from a vendor whose practice we sold in 2024:-
I heard about Draper Hinks through Accountingweb. My practice was local, so I visited Nicola’s office and discussed the idea of the sale. Working with the team was good, with excellent communication and follow up. They obviously knew what they were doing and had a plan to achieve it. Their process was easy to implement.
The most difficult part was choosing the best purchaser to fulfil the objectives of the sale. I chose the buyer that was a good fit to how we operated, plus being a two partner firm they could potentially provide better cover than I could as a sole practitioner.
I will miss the client contact but will not miss the constantly changing legislation. I have already recommended someone to Draper Hinks because of their clear communication and advice at every stage. I can now have more holidays and am doing more things that I enjoy.
Neville Ford ACMA Sold his practice in 2024 (Permission given to use his name)
Please check out our website www.draperhinks.com where you can:-
- Download our Draper Hinks Selling Fees eBook.
- Book a time to talk to Nicola on Calendly via this link:-
https://calendly.com/draper-hinks/q_a
- Read our monthly Blogs that give regular market commentary.
- Read our vendor’s stories about their experiences of selling their practices.
Next Step
If you are thinking about selling your accountancy practice, please contact Nicola Draper at n.draper@draperhinks.co.uk or call her on 01788 816440.
You can also book a one-to-one appointment with Nicola through Calendly by clicking here https://calendly.com/draper-hinks/q_a.
Everything discussed will be totally confidential.