How to Buy with Confidence

Whether you’re buying to expand your current firm or looking to go out on your own, purchasing a public accounting firm or tax practice requires a plan tailored to you. Having the right strategy from the beginning can mitigate some of the risks associated with a purchase and will put you on the path to buy with confidence and transition with ease.

Phase 1: Locating a Firm to Purchase

• Analyze your strengths and begin your search. Consider your current experience and educational background, determine the ideal firm size, client mix and service offerings that suit you best. Know what you’re looking for.
• Assemble a team of professional advisors to assist you with the process, including an experienced broker; a seasoned, competent business attorney; and an industry specific lender with years of experience financing firms and tax practices.
• Start the lending process by initiating the pre-approval process with multiple lenders, understanding capital requirements, and the process needed to complete the loan.
• Identify an acquisition by seeking out multiple firm offerings and targeting the right cultural and professional fit. This will include meeting with prospective sellers to narrow your search.

Phase 2: Negotiations and Due Diligence

• Negotiate to acquire your selected firm. Bring an offer of terms that is fair to all parties, addressing not only the asking price but all terms involved including any employment contract for the seller. Transparency and flexibility will yield better results for everyone.
• Perform due diligence. After executing an offer or LOI, conducting your due diligence may include a thorough review of tax returns, financials, client demographic information, and operations of the firm.

Phase 3: Closing and Transition

• Prepare for closing. Having your attorney prepare the closing documents shortly after the offer or LOI has been executed will allow all parties ample time for review and revisions. Once you’re satisfied with your due diligence, everyone has approved the closing documents, and you’re prepared to fund the purchase, closing can occur.
• Support client retention by meeting with clients and being introduced as the hand-picked successor. This oftentimes also involves the seller staying in a part-time role for a brief period of time after a sale to boost client confidence.
• Encourage staff stability by retaining existing staff to preserve historical knowledge and maintain trust, as clients often have deeper personal relationships with staff than with the owner. Winning over the key influencer in the staff can expedite a smooth transition.
• Implement strategic planning through a clear one to two year transition plan to minimize disruption and establish you as the successor, building your own bonds with the client base.

You can buy with confidence when you employ these strategies, all while protecting the goodwill of your acquisition and ensuring you transition with ease.