Discussion:Sale of a tax practice
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Discussion Forum Index --> Business Growth Community --> Sale of a tax practice
Dreamcatcher (talk|edits) said: | 12 December 2005 |
| I am considering retiring. Does anyone have any insight on how to take care of clients who have become friends and not leave them out in the cold? I may even want to keep some of them, especially some that I do consulting for. Do I sell my clients, sell my practice, sell my home with the office in it? Anyway, I need some insights as to how others have retired and how to price my practice. Thanks | |
| 12 December 2005 | |
| Dreamcatcher
I can only speak from my experience. When I retired and returned to my home state I wanted to jump-start a tax business. Through word of mouth I have purchased two existing tax prep businesses. Here is how we (buyer/seller) handled it. As the seller you must know other independent preparers in your area. Pick the ones that you know do a good job. Call each, explain that you want to retire and are looking for someone to take over your clients. If they express an interest, interview them to determine whether they are someone you would be comfortable turning your clients over to. When you find a match, negotiate a price. In both cases I paid the seller a percentage of my prep fee from each of the seller's clients that came to me. Between 30 and 40 percent for one to three years is reasonable depending on the number and complexity of returns you do. A promissory note can serve as a contract. You should send a letter to all of your clients telling them that you have retired and recommending that they take their business to the buyer. This, of course, is entirely the client's choice, however, it worked out very well in both cases for me. Any referrals that your former clients give to the buyer are not considered "your clients" for purposes of the buyer/seller contract. Hope this helps you | |
| 13 December 2005 | |
| Try GO2bbi.com for more info. We have purchased 5 tax practices in past 17 years. You will not leave your clients in the cold if you find a good caring accountant to take over your clients. Usual selling price is 100% of first years collections. This amount can be paid out to you over 1 to 5 years. | |
Gregg Gillaspy, CPA, CFP (talk|edits) said: | 2005-12-16 |
| I bought a very small practice out (in comparison to our firm) this year. We are paying 65% of the first year revenues from these clients to the seller and will pay 35% of the second year revenues from these clients to the seller.
That way, we get to 100% of one year's revenues but it covers 2 years in case any clients don't return after year one. | |
