An agent acts for either the buyer or the seller, not both. A broker acts for both parties. Draper Hinks are brokers and we specialise solely in the sale and purchase of accountancy practices of all sizes.
It is our job to find you high quality buyers or sellers and facilitate introductions. We go much further than just acting as a ‘dating agency’, as we guide both parties through the whole buying and selling process from start to finish, and often beyond.
We offer impartial expert advice and ‘hand-hold’ both parties through the negotiation process, ensuring both parties are happy with the agreement reached. We are able to clarify all issues on your behalf, whether you are the buyer or seller, and iron out any potential problems along the way. Only if the sale goes through does the buyer pay us.
We find buyers and sellers alike appreciate our comprehensive service and can supply testimonials to support this.
We arrange initial meetings between the seller(s) and potential buyers in a location arranged by the seller. We act as a sounding board for both parties in a way that agents cannot.
If you are an accountancy practice looking to sell now or in the future just call us. We will ask you about your practice, including information about clients, staff, turnover, premises, potential value and timescale – determining what you want to achieve and by when.
Armed with the facts, we will then contact appropriate potential buyers. We already know of many firms looking to buy accountancy practices. We will not reveal your identity as this stage. This personalised approach from us, followed by telephone calls, pays enormous dividends.
If you are a buyer, just contact us and we will ask you what you are looking for, the type of practice, in what area of work, location and expected fee income.
Whether you are a seller or buyer, we ensure our highly targeted marketing letters attract the attention of the right people. This method means you are much more likely to meet with success than through a scattergun approach
No, we deal with buyers and sellers all over the country. Often, a buyer will want better geographical coverage – their main office may be in Cornwall and they want to extend their reach to Carlisle. A seller can be in the north of England and we find a buyer based in the south.
Sometimes, a local seller may attract more local interest but in this age of larger practices wanting to cover every part of England, our buyers and sellers come from all over the country. Your location makes no difference at all to us.
By understanding your business, we can take all the factors into account and find you the right solution to achieve the outcome you want.
Even in these times of recession, there are still seven or eight buyers to every seller.
If you are a seller, we will do everything we can to maximise a good income multiple for your GRF, while ensuring it is fair to the buyer (and therefore more likely to be agreed).
Selling a block of fees ensures you still have some income, while benefiting from a sale. You should then be able to sell your remaining goodwill in the future.
For larger practices, of £150,0000 or more, you can usually expect to be paid in three tranches: an upfront fee on completion and the balance divided in two equal trances on the first and second anniversaries.
If the buyer claims under the clawback clause, the seller usually has the right of discovery to see the appropriate files and even to speak to the client, to ensure the loss is genuine.
The clawback clause is one of the more complex areas of the agreement and requires deep understanding and expertise to ensure it is fair to both parties and that both the buyer and seller understand what the implications are for them. Your solicitor can advise on an appropriate clawback clause for your needs.
Recently, we arranged the sale of one firm that was a one-man set up with a turnover of below £25,000. Other brokers had turned him away, saying he was too small to sell and no-one would be interested. We found him six potential buyers within weeks and he then had two offers on the table. He chose the one that was the better fit with his business, which was not the higher offer.
If you are thinking of retiring or just giving up, talk to Draper Hinks first.
Anonymity is vitally important during negotiations. If you advertise your accountancy practice for sale or a broker does so on your behalf, it doesn’t take a genius to work out who you are. It is one reason why we do not advertise.
It can also be detrimental to the sale and your selling price, as once the rumour mill has started, it is hard to stop. Clients and staff may hear it and start to look elsewhere.
It is one of the many advantages of using an experienced broker like Draper Hinks. We will keep your identity a secret until potential buyers have signed and returned a document containing a confidentiality clause. We will then provide them with a copy of the report containing your details. However, if you wish for your details to be anonymous, we will withhold them until you give your permission for this information to be released.
We also ensure the buyers are serious and financially able to make a purchase.
The potential buyers must have your details before a meeting can be arranged.
We do not give any of your details to your clients or staff
If you are thinking of relocating, an urban premises demands a higher price than a rural one. You might also consider areas of potential such as a redevelopment area, a new business park, an affluent area or an area with a lot of businesses. You should, of course, take account of how much competition is already in these locations. However, you should not overburden yourself with leasehold obligations.
It is certainly the case that urban practices have a higher value but while an urban location can drive prices to the higher end of the norm, a rural practice can still be worth a good price. Indeed, we have seen an increase in people looking for a rural practice that could give them a better lifestyle than they might have in a town.
Do ensure you already have in place agreements with any partners in the firm as to what will happen should you die.
Basically, the regulations state that the seller may not dismiss his staff to make the sale more attractive to a buyer.
A buyer must not make your staff redundant above his own staff or offer your staff a new employment contract that is worse than the one he or she had before.
Try and ensure you do not have a heavy liability concerning any leasehold. A buyer may want to service your clients from his own premises or will need a bigger office for future plans. If he doesn’t want your leasehold, you may be able to sell or sublet (but check your contract). Remember, if you have the head lease and then sublet, the landlord has the right to chase you for any unpaid rent if the tenant defaults.
In the case of freehold, it is a buyer’s market at the moment and is subject to the vagaries of the property market. You should seek advice and valuations from three local estate agents and investigate whether a change of use would be allowed and therefore affect its value.
Smaller practices wanting to buy as a way to grow may not have spare management resources or financial resources to acquire bigger practices. The acquisition of another small practice or block of fees can provide the solution.
Accountancy practices can also grow their client base by good marketing and PR. These days, you need a good website, with the right SEO words to achieve higher rankings on search engines.
A regular short blog and listings on local business sites will also raise your profile and therefore attract more clients. You could also network (at business networks, social clubs, charities, churches, etc) and form alliances with local solicitors, banks, IFAs and estate agents.
If a seller asks us to do a mail shot for them, we charge a small fee to cover it, but no other fees.
If a buyer asks us to do a mail shot for them, we charge a small fee for this and a brokerage fee if the purchase goes through.
As we are constantly dealing with the sale and acquisition of accountancy practices (the only profession we deal with), we may well have some firms on our books which would be suitable. We will also actively look on your behalf, approaching appropriate firms nationwide that may be on interest.
If you want to sell or buy, do contact us now, even if you only considering a sale or purchase in the future.