Block of fee

Hi,

Does any one bought block of fee, if yes what is the experience and what is the normal market rate. Typically I am looking for clients with annual worth of around £30 -40k.

 

Can someone please tell me

 

  1. What type of firms sells block and what is the reason behind this sale
  2. Are they quality clients in any manner.
  3. How do I approach these firms.
  4. What is their typical retention rate.  
  5. What is the normal payment structure.

 

Thanks

Asim

 

Comments
maxxy's picture

Further clarification?

maxxy | | Permalink

Hi

I notice so far 59 reads but no replies. Perhaps a bit more clarication is required with what you mean by block of fee?

Kind regards

Maxine

-- www.maxxy.co.uk www.find-me-an-accountant.com Twitter:@maxinemaxxy

PUREaccountants's picture

Bit confused

PUREaccountants | | Permalink

 Do you have £30-40k to spend on buying clients or is that what you thik their lifetime value is?

Secondly I would never buy fees from another practice, i doubt very much that anyone gets rid of good clients.

If you're looking at acquiring clients to add to your existing business or as a startup then thats a different matter. 

Lets assume you have £30k to spend on a block of clients. The old method for valuing this income has been 1x fee income (averaged over 3years say). Now if you take off the cost of servicing these clients and increase in administration you'll have to be sure that this is worth doing. An alternative method is to value their "lifetime" contribution to your business.

In terms of who or where to buy such a block of fees. I would be looking at all the local one man bands in your area and opening a dialogue with them as to whether they are looking to retire or not and acquire from there.

I acquired my first 100 clients from an school friends father. I paid 50% of fees spread of 2years. Has done me well, bread and butter earnings as they say. What I have found is that over the past 3years i have started to reshape my service offering and so a number of these no longer fit. 

Pro's and con's all round I guess. If I was starting again I would set out what my ideal would be and work from there.

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