Welcome to the accountancy practice sales and mergers section of our firm. We hope that the following articles will provide you with a detailed description of the current market environment as well as highlighting the mergers and sales process. This information has been made readily available to read for both current clients and also potential clients who are either in the process or implementing an exit strategy or thinking about it.
If you feel that we have missed any important information then please contact us as we are always looking to provide the most up to date and important information to our followers and supporters.
Considerations when buying an Accountancy Practice
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Taking over an established practice can be a far less risky strategy than starting a practice from scratch, given that established companies already have a client base, proven track record and all the assets and expertise required to generate a regular income stream. Accountancy is one of the industries which may be considered more recession proof than others, given that companies will always require accountants to produce their end of year accounts or payroll, and tax returns still need to be completed whatever the economic situation. Buying into the accountancy industry represents a significant investment, and care must be taken to consider several variables before taking the plunge.
How to Get Finance for the Purchase of an Accountancy Practice?
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Times are tough for practice of all sizes, and one of the drivers for the current economic climate is the fact that business owners including accountancy firms find it very hard to raise credit. Whereas in the past all it took was an appointment with the local bank manager to arrange an extension to an overdraft facility or a loan to finance an acquisition of a new business or to buy a new piece of machinery and increase output, things have never been tougher. The economic crash in 2008 was caused in a large part by over-lending, and the major banks were criticized heavily for not doing enough background checks on businesses or individuals before handing over the cash. As a consequence of this, banks and other financial institutions have dramatically cut the availability of credit to all sizes of companies and many businesses find it very difficult to get any credit at all. The severity of the situation was brought sharply into focus for the general public recently when it was announced that the very high interest rate pay day lender Wonga was venturing into the business lending market.
How To Value An Accountancy Practice?
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Despite the turbulent economic conditions of the recent years, the trade in the buying and selling accountancy practices is still relatively brisk. A profitable practice with a comprehensive and loyal customer base will always be attractive to a potential buyer, but the main problem for the seller of the business is how to price their practice correctly and where to find a buyer. In the accountancy industry, most accountants who are thinking about buying or selling a practice do so through a specialist accountancy broker like our company. Brokers are market specialists and are the best people to advise on setting the correct price. However, before buyer and seller sign on the dotted line there are several variables which should be considered.
Tips/pitfalls for choosing a legal representative for the sales process
The legal process we go through when deciding to buy a business is not the most glamorous aspect of negotiating the sale, but is the most critical aspect to get right. A poorly managed legal transfer can cost huge amounts of money and time to put right, and in the worst cases the legal bills can cause even the best businesses to fold. One of the first steps in the whole process of selling or buying a business should be to get legal representation, but how do you go about choosing the best legal representative?
Do you sell or merge an Accountancy Practice?
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There are a whole host of reasons why a practice owner may decide that the time has come to hang up the calculator and double entry ledgers and sever his/her ties with the accountancy industry. Most often, it is a change in personal circumstances such as retirement, relocation to another part of the country or a reassessment of priorities after a major life event such as the birth of a grand child or life event which hastens the decision to put the accountancy practice on the market and move on to the next challenge. Although in many ways selling an accountancy practice is similar to selling any other business, there are several other steps to the process which have to be carefully navigated.
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I started my accountancy practice in 1988 and over the last few years was thinking about my exit strategy. As soon as i spoke with you i realised I had an experienced, credible and reliable partner to work with. My practice valuation was in line with my expectations and all communication was carried out in a confidential manner. None of my staff ever suspected. The marketing phase was very efficient and I was presented with a long list of 6 interested buyers. I received 3 offers and eventually agreed a purchase price in excess of the listed practice valuation. Due to the interest in my practice the negotiated earn out period was shorter than i was expecting. I would like to thank you for your honest and efficient work through what could have been a stressful period for me. I would highly recommend your services to any practice owner who is looking for a reliable broker. Mr C. London, 2012
Finding the Right Accountancy Practice Broker
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Selling an accountancy practice or buying into a new one is one of the biggest commitments anyone will ever make, and it is therefore critical to get the decision right. Most people who venture into the accountancy industry by buying into a business have neither the time nor the expertise to complete the process themselves, and use the services of an accountancy practice broker to assist them with the search for a business opportunity and the conclusion of the deal. There are a large number of brokers out there however including us, so how does a prospective buyer or seller decide which of the many brokers is the best option for them and their business?
If you are selling your practice or block of fees privately and would like to purchase some legal documentation to get you on the way please read about the following legal templates. These products can be downloaded from our website and save you £000's in legal fees should you decide to use them.