Selling Tips
Get your Accounting Firm ready.
While you may be ready to sell, your practice may not quite be ready for the market just yet. Most buyers want to invest in a turnkey practice that has low owner hours and a high cash flow ratio, as well as a stellar staff and client list. In other words, they want to see a return on their investment without spending significant amounts of time in the office.
Consider your objectives and goals
Consider your time frame for selling; waiting an extra year or two can give you time to better prepare your business to sell at a higher price. You also need to have a plan for what to do after you leave. Whether you’ll be relaxing or working, it’s prudent to have the next phase lined up.
Know your firm’s value before selling
Go into your sale with a concrete figure and a rough price range, as well as the lowest figure you’re willing to accept and the highest figure you’re going to shoot for. In most cases, the final selling price ends up somewhere in the middle, but having a frame of reference to start with is critical.
Time the sale well
Accounting firms tend to be cyclical in nature. There may be long periods of drought followed by floods of incoming business, especially when tax season rolls around. With that in mind, it’s important that you think about the timing of your sale. There are pros and cons to selling the firm both before and after your busy period.
Work with a Financial Advisor
A financial advisor will provide valuable, unbiased advice and may notice things that you might miss when selling your own firm. A third-party financial advisor can also help you to negotiate and structure the deal, whether it’s an earn-out payment plan or an upfront deal, depending on your desired outcome.
Entice Buyers with Modern Technology
If your practice still relies on outdated spreadsheets-or worse, paper ledgers-you may struggle to find a buyer. Buyers actively seek profitable and efficient accounting firms to invest in, so the use of cutting-edge cloud accounting software is a fantastic way to ensure that your practice is appealing to potential buyers. If you can prove that your team is proficient with modern accounting systems, you can confidently raise the asking price for your firm.
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