Selling an accounting practice is a big step, and it’s something that absolutely demands a lot of time, care, and consideration. It’s very easy to make mistakes along the way or overlook certain aspects that might seem small and insignificant for now but could come back to bite you later on. With that in mind, here are nine golden tips to follow when you decide the time is right for selling your accounting firm.
Get Your Data In Order
Put simply, buyers will be way less interested in the prospect of buying a firm with unclear or badly-organized data collation when compared to one that has got all of its data in order. Be sure to take the time to prepare a clear, easy-to-follow Information Memorandum to prove to potential buyers that you’re a serious seller.
Be Honest From The Outset
This one is vital if you’re looking for a smooth, seamless transaction from start to finish, without any unforeseen issues occurring along the way. Be totally honest and up-front about your business from the start, without holding anything back. The littlest of white lies can shatter buyer confidence and lead to entire deals breaking down when the truth eventually comes out.
Avoid Selling To Partners Or Employees
Many accounting firm owners consider selling to an existing employee or partner, and it seems like such a simple option on paper. Unfortunately, in reality, it’s often one of the biggest mistakes you can make when selling a business. There are all kinds of issues that can arise if you try to do this, including employees/partners asking for special discounts or contingencies, or working relationships breaking down entirely due to difficult negotiations.
Check That Buyers Can Afford The Purchase
It’s easy and logical to assume that, if a prospective buyer is showing interest in your firm, they probably have the funds to pay for it. However, there are cases where buyers don’t actually have their finances in order, and if you spend time, effort, and resources negotiating with a buyer, only to learn that they haven’t got sufficient funding, all that effort will be wasted.
Protect Your Privacy
There are over 40,000 accounting firms in America, and selling one is such a unique prospect because it requires very delicate management of marketing the business without giving too much away that could cause unease among your existing staff or clients. This is why it’s often wise to work with a broker, as they’ll be able to negotiate on your behalf and make arrangements for non-disclosure agreements.
Choose A Specialist
Speaking of brokers, be sure to opt for a specialist broker with experience and expertise in the field of accounting. There are plenty of more general brokers out there who may not be familiar with the unique intricacies involved with the accounting world, so it makes sense to opt for a broker who knows accounting in and out.
Be Ready For A Bumpy Ride
In an ideal world, every accounting firm sale would be smooth, simple, and stress-free. Unfortunately, in the real world, problems occur along the way and the sale process can prove to be pretty stressful. That stress can not only affect your life in various ways, it can also lead to deals breaking down, so be prepared for it, accept that it won’t be easy, and make sure you’re totally committed to selling your firm before starting the process off.
Be As Prepared As You Can Be
When it comes to something as important as selling an accounting firm, you can’t just dive right in without proper preparation, hoping that everything will work out. It’s an intricate, complex process with several parts, and if just one mistake or oversight occurs along the way, the whole process can be set back or damaged. Take your time, do your research, speak to experts, and make the right decisions.
Try To Find Several Prospective Buyers
Too often, those selling accounting firms find one interested buyer and start up negotiations with them, completely forgetting to continue marketing the business to others. If you only negotiate with one buyer, they’ll hold a lot of the cards, but if you’re dealing with several at once, all in competition with one another for the firm, you’ll have a better chance of having your demands met or even exceeded.
Selling an accounting firm may seem quite intimidating at first, but if you work with a proven, trusted broker and follow these top tips, you should have a much more positive and rewarding experience from beginning to end.
Interesting related article: “What is Accounting?”