Discussion:Sale of my practice
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| {{ForumReplyPost|UserID=Chautauqua|Date=28 June 2006|Text=Chriskrim....Invite him to lunch and tell him why if he asks. He will probably ignore the letter.}} | {{ForumReplyPost|UserID=Chautauqua|Date=28 June 2006|Text=Chriskrim....Invite him to lunch and tell him why if he asks. He will probably ignore the letter.}} | ||
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| + | {{ForumReplyPost|UserID=Warren|Date=28 June 2006|Text=I've seen several different formulas for sales price and terms of sale. It seems that they all are about 100% of annual fees from retained clients payable over a 4 or 5 years period. Sometimes with interest and sometimes without. But I have seen prices as low as 75-80% in a case where the sole practitioner CPA had died and I have heard about prices slightly over 100%.}} | ||
Revision as of 17:50, 28 June 2006
Discussion Forum Index --> Tax Questions --> Sale of my practice
Discussion Forum Index --> Business Growth Community --> Sale of my practice
Discussion Forum Index --> Hawaii User Group --> Sale of my practice
Actionbsns (talk|edits) said: | 15 May 2006 |
| I'm not sure if this an appropriate question for here and if not, perhaps someone can refer me to a better place. I'm planning on selling my practice in Hawaii - the mainland and family are calling me home. I sold a business in California prior to moving here and went through a local business realtor, but I wasn't doing tax work in that business. Any suggestions on the best way to proceed? There are a number of national websites for advertising the sale, I'm not sure if that's the best way or not. Or maybe it's best with a local broker again. What are the things that have to be considered from a confidentiality standpoint? I think this is a bigger issue with the tax practice than it was for simple bookkeeping. Any thoughts and suggestions will be appreciated.
Paula | |
| 15 May 2006 | |
| From Accountants World I found this link. http://www.mergerplace.com/
I've never used it but perhaps it might be helpful. | |
| 15 May 2006 | |
| The timing is a little off, as I'd like to move to Hawaii in 3-4 years. I have an existing practice in WA. Neal | |
| 15 May 2006 | |
| I'd like to set up a buy-sell agreement with a long term employee in the event of my early demise. Anyone have any docs they would be willing to share, or direct me in someway? I'd like to do this so that there is someone transition for my clients, and to ascertain a saleable interest for my beneficiaires. Thanks, Neal | |
| 15 May 2006 | |
| Nealab,
Will you consider selling your practice in WA? Where in WA is your business located? | |
| 15 May 2006 | |
| No, I do not wish to sell at this time. Just looking to have an agreement in place in case I die early. | |
| 16 May 2006 | |
| When selling a tax practice, I believe the concern from the buyer's standpoint is whether the clients will stay. Retension. Some purchase agreements will payout 20% of gross receipts for those clients retained over each of five years. There of course will be a contract signed that will both address the confidentiality issue, as well as the covenant not to compete. | |
| May 16, 2006 | |
| I know a local firm on Oahu that was interested in purchasing small practices. They may still be interested. The prospective buyer will be interested in many of the following:
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| 16 May 2006 | |
| If I was going to go the broker route, I would contact one that specializes in accounting practices even if they are not local. As opposed to dealing with someone that was local that did not specialize in accounting practices. I live in a small city 300,000-400,000 and the local business brokers do not know much about marketing an accounting practice. | |
Actionbsns (talk|edits) said: | 17 May 2006 |
| Thanks for the input. I'm wondering about the companies who send out all those little blurbs throughout the year trying to list practices. Has anyone used one of those firms, or does anyone know of anyone who has used a firm like that? Then there are the internet business brokers. We are watching several of them for a specific type of business and I often see firms for sale, but I'm not sure how the firm was included. When I sold my business in California I used a local broker who specialized in businesses, his fee was either a percentage or a flat fee of something like $5000 for the sale, whichever netted him the greater commission. I'm more concerened this time with confidentiality issues especially with the tax prep part of my practice. | |
Centralcoastcpa (talk|edits) said: | 20 May 2006 |
| Actionbsns/Paula, Somehow my name got out that I was considering selling my practice and I have received a few solicitations from brokers that supposedly specialize in accounting practices. They are as follows: www.accountingpracticesales.com, Business brokers, Inc. ph. 1-800-727-4272 listing info at www.go2bbi.com, and www.prohorizons.com
What island is your practice on? I've been toying with the idea of moving back there (did some college there years ago). Sue | |
Actionbsns (talk|edits) said: | 21 May 2006 |
| I'm on the Big Island. I have always received solicitations in the mail from business brokers who specialize in selling practices. I think some of them just do a google search for certain areas and then mass mail. That's one of the reasons I thought I would address this here, to see if anyone had experience using any of those brokers. Thanks for the additional information, though. | |
| 21 May 2006 | |
| Accounting Practice Sales | |
| 24 May 2006 | |
| Several years ago I sold my practice (have since then ramped it up again). I used a broker that had advertised in a CPA magazine. They weren't specialized in accounting/tax but I don't think that is necessary. My business sold for 110% of gross revenue. There was an adjustment clause to the sales price after 1 year for the clients who left. I had a non-compete agreement for 4 years which was specific to that client base and a certain amount of mileage around that office. The terms of the 4 year note carried interest and had annual payments just after tax season (when the bank account should be able to accomodate the payment). | |
Actionbsns (talk|edits) said: | 1 June 2006 |
| Natalie, I just checked. Thanks for the information. I also contacted Accounting Practice Sales, left by Dennis. They are in Texas and routinely send out direct mailers regarding practice sales. They seem to have a good plan and I like the person I spoke with. When you do a Google search for this their's is the first name up. We are now waiting to clear up a nasty personal issue that developed with a family member this week. Then make some decisions on timing and listing and moving on. | |
| 5 June 2006 | |
| Actionbsns,
I'm on the Big Island (Kona) and keep getting soliciations from VR Business Brokers over in Hilo. They have represented some of my clients and the clients overall have been satisfied with their work. They do not specialize in accounting/tax practice. Its pretty much love the one you're with. Let me know how it goes. I'll be interested in selling in about five years. | |
| 28 June 2006 | |
| Hello all,
I am new to this forum, but I would like some thoughts on the following. A good friend of mine works for a CPA who is thinking about retiring, but he may not be there quite yet. From what she tells me, he has quite a few monthly accountings, but they are all done by hand. I was toying with the idea of sending him a letter introducing myself and letting him know that if he ever thought about selling that I would like to talk to him. What are your thoughts on doing something like that? What kind of things should I be thinking about? What things do I look at to see if this is a good buy? How do you price the business? Terms of sale? etc... I just started my own CPA last October and it may be a good way to get off the ground. I realize it would take some time and effort to get everything computerized. Should this play into the price? I thank everyone in advance for their input. Chris | |
| 28 June 2006 | |
| Email me at DZCPA@YAHOO.COM with your phone number to discuss. My firm has purchased 5 CPA firms in the past 17 years. | |
Chautauqua (talk|edits) said: | 28 June 2006 |
| Chriskrim....Invite him to lunch and tell him why if he asks. He will probably ignore the letter. | |
| 28 June 2006 | |
| I've seen several different formulas for sales price and terms of sale. It seems that they all are about 100% of annual fees from retained clients payable over a 4 or 5 years period. Sometimes with interest and sometimes without. But I have seen prices as low as 75-80% in a case where the sole practitioner CPA had died and I have heard about prices slightly over 100%. | |
