Anyone thinking of selling their practice would be best advised to get in touch with Draper Hinks as soon as they have decided to take this step. It is important to understand the process that we follow when selling an accountancy practice.
The first thing we offer is a free, confidential discussion about your own situation. Everyone’s circumstances are very different. We need to understand what it is that you would like to achieve from the sale. Not everyone is interested in maximising the money from the sale, the vast majority of our vendors want to find a “good home” for their clients. They feel a strong sense of responsibility to find a successor that will offer the clients a similar level of service or one that is better. So, they are looking for a good fit for their clients.
After this conversation via phone or video call, a time scale will be agreed. It may be that the seller does not want to sell straight away, perhaps not for a couple of years. But for those that want to sell in the next 12 months the paperwork will be sent out. This consists of a questionnaire asking details about the practice for sale and a proposal for the vendor to sign allowing us to market their practice. We cannot do anything without written permission, under GDPR.
As soon as we get the paperwork back we work on putting together a mailer to potential buyers. We ask the vendor to keep a day free to meet with any potential buyers and then we send the mailer out. Any buyer has to sign our terms and conditions that states it is the buyer that pays our brokerage fee and any information given to the buyer has to remain private and confidential. On receipt of the signed paperwork from the buyer we will release to the buyer, more detailed information about the fees for sale. The buyer will then let us know if they want to meet with the seller. If the answer to that is yes they do want a meeting, we will book a time for them on the Meeting Day for a one on one meeting.
A time is then booked for Nicola to have a Coaching Call with the vendor, preparing them for the meetings with the buyers. The vendor will see the buyers individually on the Meeting Day. Feedback is requested and received from both the vendor and the buyers and any offers are sent to Nicola for her to review before being passed to the vendor for consideration.
One offer is accepted and that buyer is invited to carry out Due Diligence. Once this has taken place and the buyer is happy to proceed, the buyer puts forward the contract. Solicitors, where used, are instructed. Draper Hinks has a panel of trusted solicitors that are used on a regular basis.
Between Due Diligence and completion, both parties will agree what will happen to any staff, the office if there is one, how the accounting systems will be integrated, what role the vendor will have during the handover or if the vendor is staying on to work for and with the buyer. With regards clients, both parties have to decide the How, What and When to tell clients. Some institutes such as the ICAEW have strict guidelines as to how and when this is to happen and it is very important to adhere to this advice.
Both parties will be working towards an agreed completion date. It is not unusual for this to slip a little especially for the larger practices being sold. But eventually the deal goes through and parties are under extreme pressure to communicate with all clients as quickly as possible to minimise attrition and maximise retention.
This is a very simplistic view of the process, but it is helpful to have an overview. If you want to discuss this in more detail, please get in touch with me at n.draper@draperhinks.co.uk.