Purchase a block of fees

I am sure that this can work well, but even with the best of intentions it can work out that the £40K that you buy turns into a lot less ongoing.

PM me if you would like more details than I can put up on the public forums.

Hi

I am in the same situation as yourself and this is what I have found:

1. Going rate is anywhere between 1.5 times to 1.75. If you offer 1.75 then you will find a much better range range of blocks of fees to buy. I am buying at 1,25 but there are additional conditions, more on it below.

2. The best place is to register with an agent such as http://www.apma.co.uk/ or goldsmiths. Goldsmiths though take cash from you upfront to do a search (as they did with me) but so far have not delivered anything and I havent heard from them at all so tread carefully with them. APMA are better in that they have more on their books and only take a fee upon success which is fair enough. You need to tell the agent what you are prepared to offer and what you are looking for and then they go out to the sole practitioners they know and put it before them. Also try Foulger Underwood at http://www.foulgerunderwood.com/.

3. Payment is usually structured as follows: 1/3rd up front after intro, 1/3rd one year later and the remainder two years later. I am pay on a more condensed time scale (18 months instead of two years hence the reduction in asking price).

the above is based on my experience, other may have different experiences. 

Good luck on your search and new business.

Contrary to other peoples thoughts:

• The going rate is currently 0.9 - 1.2 (the multiple) times the annual recurring fee income.
• For a block of £40k you are likely to have to pay 50% of the consideration (the multiple x £40k) on completion with the balance on the first anniversary (12 months after completion) subject to losses (the claw back).
• Additionally, you will typically need 3 to 4 months of the turnover (£13k to £10k) as working capital.
• You would normally find the competition to buy a £40k block of fees, which was offered on the open market, to be very high indeed.  We sold a £40k block of fees in Uxbridge 18 months ago which attracted 91 would-be purchasers!  As a first time buyer you may not be as attractive to a seller as a local established small firm.

Do some research on our website to learn more - www.apma.co.uk

Serving the profession for 39 years,