Sell Your Accounting Practice in the West Coast
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Are you asking any of the following questions as you contemplate selling your accounting practice?
- Will I find the right person for my practice, my staff, and my clients?
- Will I get paid? What’s my risk of not getting paid, or not receiving what my practice is worth?
- How much will it cost me to sell my practice?
- When should I sell?
- What is my role when engaging a brokerage? Will it be complicated or time-consuming?
- Can’t I do just as good a job selling it myself?
- Is my practice well-positioned to sell? If not, what do I need to do to make it attractive to buyers?
Experience Yields Results
Since 1995, ProHorizons—a West Coast brokerage and consulting firm focused on tax and accounting practice sales, acquisitions, and business development services—has engaged in this dialogue with thousands of accounting professionals in the same place you are today. We’ve translated that experience into a proven accounting practice sales methodology resulting in success stories from sellers and buyers nationwide.
Why ProHorizons?
Entrusting ProHorizons to guide your accounting practice sale gains you access to:
- Exposure throughout the West Coast and beyond to thousands of prospective buyers through our Accounting Practices for Sale list service. Your identity remains anonymous until we’ve developed a candidate for you to meet and evaluate.
- Extensive promotion through integrated marketing campaigns, industry resources, and promotions localized to your geographic area.
- Efficient use of your time, as we manage all inquiries, screen prospects, and present candidates meeting technical criteria (e.g., is the prospect capable of running your practice?) and who are financially situated to put a deal together.
- Financial assistance for qualified buyers through our established relationships with stable, experienced lenders specializing in funding accounting practice acquisitions, enabling many sellers to receive substantial cash at closing.
- Complete confidentiality throughout the sales process to avoid prematurely alerting clients, staff, or your competitors.
- Expert guidance grounded in our proven accouting practice sales methodology and Our Commitment to You.
Resources to Support Your Broker Selection
Still weighing the benefits of working with ProHorizons vs. selling your accounting practice on your own? Read Why Sell Your Accounting Practice with ProHorizons? In addition, check out this short video from the IBBA on why selling through a broker is better. Finally, we offer How to Select a Brokerage and Consulting Vendor. This complimentary tool helps you discriminate between empty guarantees and realistic, valuable services to support your search for the right broker.
We understand selling your accounting practice is an important—and often sensitive—personal and professional milestone. For that reason, you’ll never receive a “hard sell” from ProHorizons. We’ll listen to your circumstances and goals, and recommend an informed course of action. Contact us today for a complimentary, confidential Initial Consultation.
ProHorizons’ Accounting Practice Sales Methodology
Our four-phase process is structured to explore all of our clients’ options and to ensure they find the right buyer with the right price and terms.
Phase 1: Understanding Your Business
Understanding your firm thoroughly is the key to positioning your business correctly and finding the right purchaser. In this first step, we’ll discuss your practice, clients, staff, financial statements, goals and expectations.
The outcome of the Discovery Interview determines our next steps together. In some cases, we will immediately proceed through the remaining phases of our sales process. In others, we may recommend some short-term adjustments to your business to better position it for sale. Many sellers consult with us years before they actually plan to sell.
Phase 2: Preparing Your Business
With an understanding of your business and goals, next we’ll evaluate your core market(s) to document key factors that may affect the perceived value of your business:
- Is your market area growing or declining?
- Are any of your competitors interested in expanding?
- What factors are prospective buyers utilizing in their business acquisitions?
In most circumstances, we begin with a baseline price of 100% of the industry standard multiple of gross billings. Then we rely on our practical experience to adjust the price according to factors such as size of staff, type of work performed, profitability, business reputation, and market trends.
Each situation is unique, therefore, we will always collaborate with our clients and focus on their goals when calculating the price. Some of the goals that affect price may include:
- Requiring a large down payment
- Seeking a quick cash sale
- Waiting for the highest price the market will bear
- Pursuing a secure income stream
We understand that putting a price on their company is a challenge for all business owners. In addition to personal factors and the terms of the deal, the amount is a concern. If a price is too high, buyers will not be interested; if the price is too low, sellers will not get the return they should. Our combination of analytical data and real-world experience presents your business at a fair price to potential buyers.
Once the prior steps are complete, our staff will prepare a comprehensive Business Sales Memorandum. This confidential document is the cornerstone of our presentations to your potential buyers. It details the core aspects of your business and the information the buyer needs to make a purchase decision.
Phase 3: Marketing and Selling Your Business
Once we have finalized the Business Sales Memorandum, we are ready to market your business to qualified buyers through a variety of channels:
- Mining our database of thousands of screened and qualified buyers.
- Networking with our extensive contacts to generate leads and referrals.
- Purchasing high-end industry lists to reach new prospective buyers.
- Conducting integrated marketing campaigns to contact prospective buyers.
- Listing your business on our site, exposing it to thousands of prospective buyers worldwide. Visit our practices for sale page to see how this works.
- Advertising in leading industry journals and newsletters.
- Building relationships with potential buyers through our webinars, workshops and industry conferences.
Our goal is to find multiple buyers, as this will increase your options when negotiating price and terms.
Our screening process measures prospects on two levels: 1) How serious is the prospect about buying, and if they are financially capable to acquire, and 2) How will the prospect fit within your business structure and environment.
Through this screening process we strive to ensure you only speak with the prospects that are ready, willing and able to buy and will provide a successful transition for you, your clients, and your staff.
Phase 4: Closing the Transaction
With the screening process complete, next we focus on the following factors to generate multiple offers from qualified prospective buyers to position you well for the negotiation stage:
- Which prospect has the skills and ability necessary to continue your business?
- Are the down payments large enough and terms adequate?
- Do the prospects have good credit?
In most circumstances, we begin with a baseline price of 100% of the industry standard multiple of gross billings. Then we rely on our practical experience to adjust the price according to factors such as size of staff, type of work performed, profitability, business reputation, and market trends.
Each situation is unique, therefore, we will always collaborate with our clients and focus on their goals when calculating the price. Some of the goals that affect price may include:
- Requiring a large down payment
- Seeking a quick cash sale
- Waiting for the highest price the market will bear
- Pursuing a secure income stream
We understand that putting a price on their company is a challenge for all business owners. In addition to personal factors and the terms of the deal, the amount is a concern. If a price is too high, buyers will not be interested; if the price is too low, sellers will not get the return they should. Our combination of analytical data and real-world experience presents your business at a fair price to potential buyers.
Caveat Emptor or “Buyer Beware” was once the rule in business transactions but in recent years courts have undermined this standard. So it is imperative that the seller work with the buyer to ensure thorough due diligence is conducted. We have a process and sample checklist that will help structure and document the buyer’s due diligence. We also work with you on your due diligence requirements from the buyer.
Third party financing or bank financing is in the best interest of both parties: less risk of collection through a larger down payment for the seller and improved cash-flow for the buyer through longer amortization. So, we leverage our lender relationships to assist the buyer in securing the needed loan and work closely with all parties to see the loan funded.
A well-written agreement that spells out everything—price, terms, etc.—can be the difference between a deal that sounds good and one that is enforceable.
Our standard purchase agreement is very comprehensive and covers:
- Terms
- Financing
- Non-competition agreements
- Transition
- Guarantees
- Down payments
- Protection of the unpaid balance
- Repayment schedules
Once your deal is closed, it is important to adequately transition the buyer into your practice. We assist you in this process by helping you plan conversations with your staff and clients, providing sample client correspondence, and acting as your sounding board as questions arise.
