Block Of Fees For Sale

I'm looking to sell my £22k annual GRF fee block

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I've been operating my online practice part-time for about four years but I am about to return to full-time employment and so I want to find someone who will buy my fee block and look after my clients.

It's a £22k block of annual GRF, with just under £16k on monthly DD payments and the remainder pay on completion. 29 clients in total; 23 ltd co's, 1 partnership and 5 sole traders/individuals. Xero used mostly, with a handful on Excel, 2 on Sage and 1 on Quickbooks. As I've operated online there have been no geographical restrictions so clients are located around the country, in a variety of sectors. 

Looking forward to hearing from anyone interested.

Replies (18)

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By FactChecker
30th Mar 2024 17:25

Two suggestions:

1. Expand a little on the types of services you are providing to those clients (at c.£750 each they could be nicely profitable all the way through to permanent loss-makers).

2. Mention anything that makes them more of a homogenous group (which can increase attractiveness and hence value).

As it stands there's little to suggest more than an opportunity for someone to acquire a 'lump' of which up to 50% may be 'dumped' (by either party) - so with no cohesion a discount is more likely to be demanded rather than a premium offered.

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By Paul Crowley
30th Mar 2024 17:50

I agree with fact checker.
Most of these clients are going to get VAT added on so will see a 20% apparent hike in fees.
And if it is all online, then the clients are quite likely to look around, different accountant and 20% hike in fees, would likely trigger that.
A common agreement is not to increase fees during year 1 to help retention of clients.
Assumed that you are doing the PAYE for the companies and the director's tax returns.
Who is doing the VAT and bookkeeping?
My concern would be that retention is a challenge.
Also a bit of an issue with direct payments, as in you have received money before providing the year end stuff, so possible that a chunk of work needed that the client has already paid for.
Not withstanding the above, all online probably makes it attractive at both ends of the scale.

You have not described the arrangements on monthly payments. Are you operating on the basis of a monthly fee?

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By DKB-Sheffield
30th Mar 2024 18:12

I'm with Paul and FactChecker. Particularly given the date... 30th March having paid a year's fees - sounds like 12 month fee revenue already in-hand, but a lot of accounts and tax work yet to be done.

However, calibre/ ability of clients would always be somewhere near the top of the list. Where on the scale of nappies, through potty training, to 'being able to see to themselves' are these clients? If they still need their hands holding to cross a road, ave £750 p/a becomes less of a pull factor. Worse if say 50% of the annual fees come from 2-3 clients(?) - i.e. what is the fee spread/ mix?

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By I'msorryIhaven'taclue
31st Mar 2024 11:30

You have 23 limited company clients priced from £55 pm for annual accounts, CT600, confirmation statement, director's SA return, and (unlimited?) ongoing advice and support. A partnership on similar terms from £42 pm; and 5 sole traders from £20 pm. All of which amounts to £16.5k of your £22k t/o.

Does the other £5.5k t/o come from "add-ons" of accounting software, bookkeeping & VAT, and payroll?

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By SimplerAccountants
31st Mar 2024 13:15

Thank you to the four of you who've commented prior to this post and who have so far been trying their utmost to deter any potentially interested buyers by highlighting potential pitfalls that are true of any business. All of the points raised get addressed as part of the process, and everything gets considered in the price, there's nothing unusual here.

All relevant information around services provided, fees charged etc is available for interested parties (it's all in a spreadsheet ready to go) and easily obtained via a proper conversation, rather than a public rip-apart (I'll await you all coming back with replies claiming you're doing it for the greater good and that I'm at fault for not including every last detail in my post). I'm not going to post the ins and outs of my business on an open forum for you all to pick holes in when you have no interest in the fee block. Any 'business for sale' listing, anywhere, only gives basics, with more information given to interested parties via the appropriate channels.

It's a profitable fee block, that takes an average of less than a day a week to service (as I said, I've been running it part-time). All my clients are low-maintenance, good people, I hardly hear from any of them. Everything just works.

Just as a little teaser, as you care so much, I run five monthly, fixed-amount payrolls (so very straightforward), and prepare VAT returns for ten of the limited companies. That's all that I'm putting in the public domain; as I said, any required information is available and will happily be shared with genuinely interested parties.

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Replying to SimplerAccountants:
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By FactChecker
31st Mar 2024 13:28

If you honestly believe my post was "trying (my) utmost to deter any potentially interested buyers" ... then you should take a deep breath and read it again.

It was intended as a couple of tips on how to improve your 'advert' ... no mention of "including every last detail in my post" or "post(ing) the ins and outs of my business". And I fail to see how it could be read any other way.

I've bought and sold many small businesses (through direct approach and/or agents and/or listings), so thought you might appreciate the heads up. But it's your life, so good luck.

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Replying to FactChecker:
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By SimplerAccountants
31st Mar 2024 13:39

You're right, I stand corrected, and apologise as my post should not have been aimed at you.

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Replying to SimplerAccountants:
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By DKB-Sheffield
31st Mar 2024 13:57

I apologise... my intention was certainly not to put any potential buyers off. Indeed, if buyers don't approach you based on my post - they probably weren't interested. Fees in-hand/ advance payments should always be part of a negotiation. By raising it, and you acknowledging that it will be considered, that would surely provide additional reassurance to a propsect?!

HOWEVER...

SimplerAccountants wrote:

It's a profitable fee block, that takes an average of less than a day a week to service (as I said, I've been running it part-time). All my clients are low-maintenance, good people, I hardly hear from any of them. Everything just works.

This IS an answer to my direcr question, and is likely to entice more buyers than would be 'put off' by my earlier comments.

A block of time-consuming PITAs generating a total £100 profit per annum is an immediate turnoff.

Whereas...

All clients are low-maintenance, profitable, and 'good people' makes this an attractive proposition (be it GRF of £20K or £20M)

I do wish you luck!

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Replying to SimplerAccountants:
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By I'msorryIhaven'taclue
31st Mar 2024 14:03

Ummm.. I wasn't tyre-kicking. Just trying to evaluate what you're selling. With all due respect, you're the one who's issued an invitation to treat in a public forum.

Ok, so per your teaser submitting forty VAT returns @say £100 and five monthly payrolls would account for the remaining £5.5k of annual fees. I assume the clients carry out their own bookkeeping, and you check over that when you submit their VAT returns.

Which takes us back to the mainstream £16.5k t/o. For limited companies, we have per your fee list £55pm = £660pa for each company client's statutory accounts, CT600, director's SA return, annual confirmation statement, and ongoing advice (albeit with a fair usage policy). Those are GRFs, with presumably no VAT, of which you will have already received advance instalments of say £8,000*

Is that a reasonable summary of the financials?

*23 clients @ an average of 6 monthly instalments received in advance (assuming an even spread of AP year end dates) is 23 x £55 x 12/2 = £7.6k (plus a few hundred in advance from the s/e clients).

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By Kosher
31st Mar 2024 16:41

I know how this system works having taken on 80 clients in 2004, after the accountant was sent to prison for theft. I signed a contract to pay him(to get him off my back because he was telephoning, writing letters and calling at my premises) but did not make any payments, it turned out he'd already had £35,000 up front from clients by DD and I had to work from September 2004 to March 2005 for nothing and still had my business costs to pay. I would never do it again and I think most accountants will be wary of paying you what you ask for.

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Replying to Kosher:
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By I'msorryIhaven'taclue
01st Apr 2024 09:21

He hasn't asked for anything yet. Just saying.

Did the "theft" arise from his accepting and spending up-front payments but not performing any work?

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Replying to I'msorryIhaven'taclue:
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By Kosher
01st Apr 2024 10:29

Yes it did partially result from work not done. He stole off his mortgage broker clients and forged prescriptions to buy cocaine and uppers. I was one of the employees there and saw an opportunity to own my own practice.

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Replying to I'msorryIhaven'taclue:
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By Kosher
01st Apr 2024 10:29

Yes it did partially result from work not done. He stole off his mortgage broker clients and forged prescriptions to buy cocaine and uppers. I was one of the employees there and saw an opportunity to own my own practice.

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Stepurhan
By stepurhan
01st Apr 2024 22:02

Just going to highlight something else that might hinder you posting here.

You have been a member of this forum for over 3 years, but this question and your responses in it are the only posts you have made. You therefore have no established reputation here and hence no way for people to judge if you know what you are talking about. With no proven track record, your claim that everything is hunky-dory doesn't have any foundation to support it. For only £22k of fees, few people will want to spend time on due diligence to counter that, so you're probably going to struggle to find a buyer.

People are not asking for the detailed ins and outs of your business. They are asking perfectly reasonable questions to determine if the offer is worth pursuing. Getting snippy about being asked is only limiting your pool of buyers even further. If you're not willing to work with an agent, and I understand why at that level of fees, then you have to work harder on making the offer attractive. Even if that means revealing more than you would prefer to for an initial contact.

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Replying to stepurhan:
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By I'msorryIhaven'taclue
03rd Apr 2024 08:45

£22k of fees, net of VAT £18.33k

7hrs a day x 52 wks = 364 hours

£18.33k / 364 = £50 hour

It's the thrown-in help and support I don't like - never been keen on that, as people take advantage. Trying to work on a big job yesterday >£10k fees I was plagued by a new client haggling down the quote we gave him in January because his old accountants gave him free unlimited access (to their office junior). No free beer from yours truly!

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Replying to I'msorryIhaven'taclue:
paddle steamer
By DJKL
03rd Apr 2024 09:28

Yes, but remember not all these hours will be direct client hours, a fair bit will be admin/AML,CPD etc, the curse of the sole practitioner, a purchaser may have admin staff capacity re existing staff already doing CPD, so with synergy the marginal fee per hour of additional work likely will possibly be less for an established firm purchasing- when I had my sole one man part time practice circa 1/3rd of worked time got lost in non billable time.

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By tom123
03rd Apr 2024 09:45

Well, I read yesterday the Carole Middleton's Party Pieces administrators were charging £566 per hour - so I think we should all re-train..

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Replying to tom123:
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By FactChecker
03rd Apr 2024 14:32

It's an endemic part of nature innit? :=)
Scavengers may not be popular, but they put in the least amount of effort and risk for the greatest returns ... just watch the vultures/crows after the lion (or car) has done the hard graft.

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