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Looking to sell our practice need advice please

Not sure how best to sell it, companies to use etc

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Does anyone have any advice please? What are the pitfalls of using a company to sell, where best to advertise, any tips would be greatfully received. Ideally we wanted to recruit another senior accountant but it seems impossible (used Reeds, Indeed and a specialist recruitment company) so have decided to sell up :-(

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By JoF
02nd Sep 2019 16:43

Draper Hinks are recommended by quite a few on here. Nicola Draper is a poster on here.

Edited

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By James Green
02nd Sep 2019 13:38

If northern based I’d suggest Kevin Smith at Vivian Sram. Have bought and sold through Kevin over nearly 20 years and find him very good.

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By sellingsue
02nd Sep 2019 13:43

Thanks James, we're in West Mids

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By zarar
02nd Sep 2019 16:02

What about getting a subcontract qualified accountant to help, rather than sell up? I would be interested in chatting,PM me

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Replying to zarar:
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By sellingsue
02nd Sep 2019 16:35

We have tried but I've sent you a PM

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By Slim
02nd Sep 2019 21:08

Why are you finding it so hard to recruit another senior accountant?

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Replying to Slim:
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By sellingsue
03rd Sep 2019 12:12

There are very few around that are a) available and b) looking for practice opportunities, most seem to be moving into industry

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By Clinton Lee
09th Sep 2019 23:59

I'm an expert on finding the right partners to take businesses to market (probably the UK's only expert on this).

I'm aware of the names mentioned here, Draper Hinks and Vivian Sram. My own accountant sold his business through Sram some years ago. Both are good firms.

Just so you're aware, there are close to 1,000 intermediaries in the UK that handle the sale of businesses. They are transfer agents, business brokers, corporate finance firms, M&A advisories, boutique investment banks, whatever.

Of those there are 24 that are sector specialists who handle just the sale of accountancy practices - they don't sell businesses in any other sector - and are more likely to be able to find you a buyer and to get you a good price.

However, it does depend on the size of the business. Many of the best firms have thresholds - you need to be a certain size before they'll take you on, otherwise there's not enough meat on the bone for them.

Some, like Abbott & Crowe, don't exist any more, but other sector experts include the likes of Bains Watts, Goldsmiths, Nicolson, Owens Professional, Procter, Retiring Accountants, Swat UK etc.

There are about 50 other firms who have a slightly wider specialisation: the sale of professional service businesses. These include the likes of Hornblowers, Transcend Corporate, Rockworth, Odyssey Corporate Finance, IMAS, Corbett Keeling, Cavendish etc.

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By meadowsaw227
10th Sep 2019 12:00

I am (slowly) preparing my practice ready for retirement, all the dross have been "Dear Johned" and I plan to stop at the same time as two or three of my bigger clients.
I purchased my practice on a handshake with no reductions for bad debts, lost clients etc and have manged to still make a good living out of it.
I have looked at using a specialist to sell my bock of fees and found the process is heavily weighted in favour of the buyer with so many "cop out" clauses to reduce the multiplier it is almost not worth the heartache.
To end up with anything between 0.75 and 1.10 is pitiful.
The idea at the moment is to give all my clients sufficient time to find a new accountant before just closing the doors and walking away.

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Replying to meadowsaw227:
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By Clinton Lee
01st Oct 2019 13:19

meadowsaw227 wrote:
I have looked at using a specialist to sell my bock of fees and found the process is heavily weighted in favour of the buyer...

I'm surprised you say that.

The sale of accountancy practices differs in one respect from the sale of ANY other kind of business (in the UK at least).

In general when it comes to selling businesses the intermediary (business broker or whatever) engaged to handle the sale is paid entirely by the vendor. Not so when it comes to selling a/c practices. The bulk of the operators specialising in this sector work on a basis where they are paid by both parties - the buyer AND the seller.

It's a weird setup, but it works for the sale of a/c practices.

Given the broker is not acting on behalf of either the buyer or seller there's no incentive to structure the deal in favour of one party or the other.

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Replying to Clinton:
By Red Leader
01st Oct 2019 15:06

Incorrect, in my experience. Normally the buyer of the accountancy practice pays the fee, about 5%.

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By NewACA
10th Sep 2019 13:44

Hi Sue, I find myself in a similar position, but keep deciding not to sell, just get a senior accountant and work say 2 days a week in the firm myself to ensure its all going ok and not lose clients etc. I have a new business that is a money making machine, and less stress, but requires insider accountancy firm knowledge hence a preference to keep the firm going, but not grow.

I think to get a senior accountant you have to make a very appealing offer, as it is very difficult. Larger successful firms generate their senior staff over many years from trainees. Essentually yoy need to entice someone away from another practice. I did have a trainee, who is still with us after 5 years, but didnt pass the exams, doesnt want to progress beyond semi senior level, she is good at what she does though.

My firm size turnover is £250k odd, so just a sole practitioner, so not very sexy. I got three candidates for interview after 2 months advertising: LinkedIn, Indeed, Reed plus local well respected recruitment agency who provided two candidates, LinkedIn the other one. I offered 6 weeks holiday, it's a part time role really, which I think is an attractive offer for mums who want a senior role, but school hours only. Also offered all the exempt Biks such as free mobile, various £50 benefits, flu jab, Christmas wine, multiple annual free dinners etc.

I work in SouthEast, just outside m25, offered £40 to £50k. All three candidates were qualified, but none clear winners. I did a tax test, making up some client emails wanting tax advice, typical run of the mill stuff, but open ended to allow though that know a lot to shine, but most of them didn't even know a number of basics.

I didn't think I'd need an accounts test, thinking they all came from practice and were qualified, that was a mistake! Person we gave job to wasn't at the point of being able to do more complicated accounts or review the junior accountants work, so am trying again, but will make up an accounting test too.

Perhaps the salary offer was too low, I'll try again but offer up to £60k FTE this time. All the candidates came from micro firms who may not have survived a larger firm, I need someone coming from a larger firm really, but I think I'll struggle to entice someone from a top 20 firm, but with the part time offer and increased salary, who knows!!

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Replying to NewACA:
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By sellingsue
10th Sep 2019 17:24

Feel your pain, we've had two now that we've recruited that on paper looked ideal but just as you've described not up to the job we were expecting. Currently feeling like just giving notice to clients and closing the door but that's not going to happen I need wine and I'll feel better about it tomorrow lol

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7om
By Tom 7000
10th Sep 2019 14:55

Hold on till April 20... when off payroll working comes in and 200,000 Ltd companies all have MVLs, and the accountancy forms contract 20-90% depending who they are.... the market will be awash with ex practice accountants with no where to sit...

The other option, just call the 3 firms who are nearest to you to sel/mergel... clients don't travel and purchasers hate paying agents fees

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By [email protected]
10th Sep 2019 20:06

Why not outsource and reap the rewards until you find right accountant
Selling should be strategic decision and if you wish to continue you can avoid selling for the lack of finding suitable accountant

Regards
Sumit

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