If you are in the market for an accounting practice, chances are you’ve had experience working in an accounting firm and are now thinking of branching out on your own. There are several things to consider when actively looking for an accounting practice to buy. It is best to have the questions you would like to ask lined up so that you don’t miss an important detail. Here are some important touchpoints to consider.
Why Is the Accounting Practice Listed?
Although there are several factors that might seem more important, this is an especially sensitive subject. If the actual practice is up for sale, that could mean that much of the clientele would probably follow the new owners. With that said, you need to do some research because you don’t want to walk into a practice in need of major reputation repair. You may ‘think’ you have hundreds of clients on the books when, in fact, there may be only a couple dozen who remained faithful. Due diligence will go a long way in this respect.
Questions to Ask Yourself
It is also important to know what you expect from buying an accounting practice. According to advice from Poe Group Advisors two decades of experience, you need to ask yourself questions such as:
- Where do you want your practice to be in three years?
- What are your strengths and weaknesses?
- Am I ready to relocate if necessary?
- What type of clientele am I looking for?
- What fee structure will I establish?
- How much can I invest?
Among other introspective considerations. While you want the sellers to offer full disclosure, you need to expect the same honesty from yourself.
When the Time Is Right
Once you have taken the time to fully come to terms with exactly what you are looking for, the time will be right. At this point, you might want to work with a firm that has years of experience in facilitating accounting practice sales and the transition if necessary. It pays to have experienced professionals who can help you choose the right practice that meets your requirements, in a location you are willing to live and work in. You may find that buying an accounting practice in the city where you currently reside is not really an option.
One of the main reasons why accountants seek to buy a going concern is because there typically isn’t that 18 to 24 months of establishing a new business. If you can find an accounting practice for sale that meets your criteria, it’s a matter of presenting an offer, negotiating counteroffers, and then closing on the deal. The key takeaway in all this is to know what you want and expect before making that initial offer. Just remember, you may not get everything you are looking for so be prepared to bend if need be. Take enough time with your advisor to have a full understanding of what you are looking for and from there you can begin the search.
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