Ten Costly Mistakes That Sellers Can Avoid - Accounting Practice Sold

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1) Selling with a Contingency or Earn-Out:

Where the real selling price of your Practice is decreased if the buyer does not achieve the guaranteed level of sales retention.  We work very diligently to structure a selling price that will not be affected by the retention of sales that the Buyer may experience, because we believe that client retention for a new Buyer should be very close to that of the departing owner.  Under normal circumstances, if the new Owner provides the same level of service, the retention should be the same as that for the Seller.  We work on the premise that the buyer has a significant amount of control over client retention, so the seller should not bear this risk.

 

2) Selling too cheaply:

In a comprehensive study that we did, analyzing over 800 actual sales of Accounting and Tax Practices, we determined that the selling price ranged from .85 to 1.2 of actual annual sales.  This range was affected by such things as location, mix of sales, sales trend, owner cash flow, staff, etc.  We have developed an Evaluation Model from this analysis that will take the particular attributes from your Practice, and generate an expected Selling Price.  Armed with this information, you will be better equipped to maximize your selling price, and not sell it below market value.

 

3) Unnecessarily carrying a note:

We have financing sources that will work with Buyers of Accounting and Tax Practices, and make funds available so that you can receive 100% cash at closing if your practice qualifies.

 

4) Wasting your valuable time with unqualified buyers or “Tire Kickers”:

We know how to find and pre-qualify all Buyers before they meet with you, and we review them for their ability to get financing and that they also have the necessary qualifications to manage your Practice.

 

5) Breaching confidentiality:

If you try to market your Practice yourself, confidentiality is almost impossible.  Also, nothing is as aggravating as a broker being careless with the confidentiality of your selling efforts.  Confidentiality is our first concern.  We do not release any specific information about your Practice until we have a signed Confidentiality Agreement  and a Buyer Profile and a Financial Statement. Our relationship with you as I market your practice begins and ends with confidentiality.  We are specialists, and market only accounting practices and understand your special concerns in this area.

 

6) Negotiating the sale yourself:

The art of negotiation is one of the most critical in achieving the maximum price from potential Buyers.  Price negotiations work far better if they go thru a third party negotiator,  as opposed to the Owner trying to be the Seller and Negotiator by himself.  We are experienced negotiators, and have the ability and experience to extract the maximum selling price from potential Buyer.

 

7) Working with a non-specialist:

We market only accounting firms and only firms.  General Business Brokers do not have the depth of understanding of how to value an Accounting and Tax Practice.  General Business Brokers do not have qualified buyers looking to acquire an accounting practice.  General Business Brokers do not do the extensive specific marketing that we do in, trade journals, direct mail, telemarketing and other media that Accounting Practice Buyers will pay attention to.

 

8) Paying in advance for brokerage services:

We do not require any up-front money from you.  Once your sign up with us, we will spend our time and our money to find the right Buyer for you.  There is no out of pocket expense for you until the deal is closed, and you have the proceeds from the sale in your hands.  You owe me nothing until the job is done.

 

9) Waiting too long:

We have found that many Practice Owners are hesitant to sell because they don’t have an easy exit strategy in place.  We can provide that easy exit strategy, because we do all of the work.  All we need from you is a little of your time to help us learn what we need to know to sell your Practice, and some time with  Buyers that we have located and pre-qualified for you. You have only one life to live.  Chances are, that life will be longer the sooner you get out of accounting.  (Hint: don’t show this one to potential buyers).

 

10) Selling without my help:

Possibly the biggest mistake you could make is to try to sell your practice without using the help of a  accounting practice sales professional.  We have proven that we can get you more money on better terms after paying our fee than you can get on your own.  Our services are free.  That means free consultation, free marketing, free negotiating, free hand holding and all the rest.  That means freedom from worry and hassle. That means no lost revenue to you because you have spent time and money to try to sell your Practice yourself.  Maybe you do not believe that is true, but you owe it to yourself to re-read these ten costly mistakes again if you want to sell your Practice on your own.