1. Explore Your Options
Only you can decide what is best: sell, merge, or close your doors. Each option has pros and cons with the value of the business ranging from zero when you close your doors, to some amount that a buyer is willing pay you to purchase your firm in a sale. The degree of client care you offer during this process also varies greatly from no client care when you close your doors to providing them with an option for great service moving forward after you are gone if you choose to sell. When you choose to sell your business, you control who the buyer will be. You will try to choose a buyer that you like and you feel your clients will enjoy working with. You will also try to choose someone that you feel will offer your clients the same great service you have provided them throughout the years. Choosing to locate your successor is something you can do for your clients that will most likely ensure they receive great client care after you are gone.
2. Know What You Want
I refer to this step as “defining your goals”. If you don’t know what you want to achieve when you sell your firm, how will you know when you find it?
Some things to consider are:
Are you willing to work after the sale? If so, how much and how long would you work? Most buyers request assistance during the first tax season after the sale to ensure a smooth transition of the client base. Are you willing to offer seller financing for a portion of the sale or will you only accept cash offers? Are you willing to offer a buyer some form of revenue guarantee?
Realizing what you wanted AFTER a deal is done may lead to seller’s remorse, so do some soul searching before you start the sales process. It will make the whole process much easier and much more rewarding!
3. Be Prepared to Sell
You may have decided you want to sell your business, but are you really ready to put the business on the market? Let’s see.
Have you assessed your practice to see if you need to make any changes that would improve the business and maximize the sales price? Here are some tips to increase the value of your firm:
- Make sure the office is clean, updated and organized.
- Have non-solicitation or non-compete agreements in place with current employees.
- Evaluate your fee structure and make necessary adjustments as needed.
- Consider eliminating difficult or unprofitable clients.
- Be prepared to provide buyers with the most recent 3 years’ tax returns, financial statements and a breakdown of the firm’s revenues .
- Evaluate all overhead items and make adjustments as needed.
I realize that many changes mentioned here may not be easy to make, but choosing to do some self-evaluation along with appropriate action could significantly improve your bottom line!
4. Use Effective Marketing
Because accounting practice sales are complex, choosing the right marketing tools can certainly increase your chances of a successful sale.
Quality marketing yields quality buyers. The key to locating the right, quality buyer is saturating the market with advertising. At Accounting Biz Brokers, we use a tailored approach to each individual firm utilizing various forms of advertising such as trade journal ads, targeted email marketing campaigns, postcards, multiple websites, and social media. The more buyers you can locate, the better price and terms you will receive when you sell. Locating the right buyer can be challenging, but good buyers are out there and many of them are ready to purchase now!
5. Negotiate to Win
All six steps we are discussing in the sales process are important however negotiating may be the most important step of them all. You could potentially do everything well up to this point and not achieve a satisfying deal if the negotiations do not go well.
The best deals are the ones where all parties believe it to be a good deal. Work to create a “win-win” deal with your buyer. Creating goodwill between you and your buyer will pay great dividends after the sale is finalized.
In some situations, you have the perfect buyer and seller, but negotiations get stressful and the parties just give up and walk away from the deal. As business brokers, we have seen this level of frustration often. Many times, we can get the parties to review where they are in the process, offer them some options to consider and get the deal back on track! Handling these complex negotiations requires a unique skill set and when done properly, can yield great results for all parties.
Accounting practice sales are complex. We know how to simplify the process and help our clients and customers achieve the success they desire.
The last step we will discuss in this series is the transition phase of the deal. The deal is inked, the parties are ready to make the transaction public and start transitioning the clients to the new owner.
As a seller, your role includes notifying the clients and employees of the sale, assuring all parties that you will be involved in making this a smooth transition and assisting your buyer in any way you can to help them be successful. Initially, this may be accomplished with the seller and buyer sending letters to all of the clients notifying them there has been a sale, who the new owner is, including his/her contact information, and where their records are located. Clients need to be reassured the new owner plans to offer them the same great service they have been accustomed to receiving from the seller. This may require some face to face introductions as well as some special attention given to certain clients, depending on the client’s needs and the complexities of their accounting and tax issues.
Success can be yours! Just take the time to work through the process until you feel you are making the right decision and soon you will be on your way to the next phase of your life! Enjoy!
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