In recent times, the accountancy profession has witnessed a notable increase in practice acquisitions. Factors such as the ongoing Covid-19 pandemic and the ever-evolving regulatory landscape have left many accountants feeling weary and contemplating their exit strategies.
These challenges have accelerated the exit plans of some firms, exacerbated by issues like the persistent recruitment struggles and the looming spectre of Making Tax Digital for income tax self-assessment (MTD ITSA), set to roll out in April 2026.
During a recent episode of AccountingWEB’s Any Answers Live, Johann Goree from OnPoint Accounting shed light on the growing trend. “A lot of people are trying to get out now while there’s potentially less businesses for sale, rather than wait until MTD ITSA and then there’s a glut of businesses available, which will drive the price down.”
Goree, who recently acquired Jo Wood Virtual FD, sees accountancy firms as becoming increasingly attractive to investors because the profession has a huge asset of recurring clients and fees.
“Whereas a tax return client won’t go searching every year for a new tax accountant, a law firm that specialises in divorces has a low-value client portfolio because they only expect to see a client once in a lifetime,” said Goree.
Selling the practice
Jo Wood, the former owner of Jo Wood Virtual FD, also appeared on Any Answers Live to tell her side of the acquisition. While MTD ITSA has been raised across AccountingWEB as one of the main drivers behind some firms’ decision to call it quits, Wood was looking for freedom and flexibility.
She wasn’t looking to sell. However, after consulting a business coach, she realised that she didn’t want to retire at 60 or build a £1m practice, her end goal was to sell her practice in three to five years.
She approached Goree, knowing that he had recently acquired a practice, to pick his brains about getting the practice into a saleable condition. Goree not only confirmed the readiness of the practice but he also made an offer.
Remove yourself from the firm
Wood said most business owners look in the mirror and see all the bad bits and assume no one else would want the business because it’s not perfect. But that’s not always the case.
Before selling up, Wood had started to remove herself from this business and created a situation where the team didn’t rely on her. Without realising it, she had made the firm much more attractive to any potential buyers.
“When I started this practice in April 2019, I made sure that I was going to use data capture tools to leverage my time and I knew I was going to have an employee because I can’t be doing sales, marketing, letters of engagement and pricing, while also doing everybody’s bank reconciliations and VAT returns. You can’t do everything.”
While she was still involved in the onboarding process, Wood had started to remove herself from the bookkeeping, payroll and operations, and had already set the wheels in motion for her departure by making the clients realise that the team can do everything she could but better because they have more headspace and are approaching things from a different point.
It’s actually the same advice she shares with her Six Figure Bookkeeper members: “Stop being operational – get out of your business. Create a business, not a job. To create a business that operates without you and is profitable, you need to get out of the way of your team.”
The business was at the point where she could have removed herself even more and it would have still kept generating money but she couldn’t shake the idea of her end goal: freedom.
Breaking the news to clients
Once the practice is sold, then comes the difficult part: selling the idea to the clients. Goree was aware that the first response from clients after they said “congratulations” would be “when are you putting my prices up?” So he felt it was important to counter those fears straightaway by putting in place a price guarantee for 12 months.
While the unknown of an acquisition can be scary, the success of the transition for clients is all about how you pitch it. With Wood already stepping back from the firm’s operations, Goree noted that the transition would be seamless for clients because the team is already handling the client relationships, while clients also benefit from a broadening of services and expertise that they didn’t have access to before the acquisition.
The pitch was solid, so the next step was announcing it. Wood and her sister, who also works for the firm, broke the news to clients personally before the news was made public, and left messages with those who didn’t pick up the phone.
She was concerned about the reaction from some of her larger clients but since she had already had conversations with them about their exit plans, they greeted the former practice owner with congratulations.
“I didn’t realise I was setting them up for this conversation by talking about their exit plans, but having these conversations with your clients is so important, because you don’t know what’s on your horizon,” said Wood.
Goree made himself available for clients as soon as they heard the news. Every client was given a link to his diary so they could book time with him if they wanted to chat.
Wood had 24 hours to tell all her clients so the wildfire didn’t spread. “Once you start, you’ve got to move quickly because if a client was the last to find out they wouldn’t feel valued,” said Goree.
Breaking the news to staff
The same urgency should be applied to communicating an acquisition to employees. When Wood broke the news to her team on a Zoom call, Goree was sitting in the waiting room ready to say hello and assure his new employees.
He started the ball rolling straightaway and told the team that they were keeping all their contracts of employment and he was enhancing their benefits immediately. Within minutes of that meeting, they had the links they needed to access their new benefits.
Wood said there was a real mixture of reactions. Everyone was happy but they also had questions about their future. That’s why Goree emptied his diary for the next two days after the announcement - they were his focus. They had his email, his mobile number and a link to his diary if they wanted a more formal conversation.
Once the staff and clients were told, Goree and Wood then approached software providers and other stakeholders.
Takeaways
This is Goree’s second acquisition in two years and he’s learned a lot along the way. “We’ve made mistakes in the past, and we’re probably going to make mistakes with this acquisition. But those mistakes are smaller and less painful.”
For those considering growing through acquisitions, Goree said: “There’s nothing in the world that’s stopping you from buying a business and structuring the deal how you want to structure it, as long as the seller is happy.
“I’ve had about 24 different conversations with 24 different people about acquisitions in the past two years, and the majority will fall by the wayside. But don’t be put off by that. Just start building conversations in your network.”
Wood also shared some final advice for firms looking at selling up: let others lead and stop micromanaging.
“You’ve got to understand what’s really important in life for you. Sometimes something in life will come and completely change the trajectory of what you’re looking for. So make sure that whatever it is you’re doing in business, you’re removing yourself more and more so you have that choice, whenever that opportunity comes up.”
Catch up with this episode of Any Answers Live now on demand to hear more advice from Wood and Goree and hear their answers to questions from the AccountingWEB viewers.
