practicesales

The Benefits of using a Broker

Tue, 06 Jun 2023 13:56:38 GMT

Using a specialist to sell or merge your accountancy practice comes with many advantages. Firstly, they understand what the buyers in the industry are looking for and so are in an excellent position to provide you with advice about how you can make your business more attractive, which should in turn lead to a better sales price.

As a specialist in your sector the broker will have a high-quality buyers list and will be able to match your requirements with the best of the buyers that are in the market looking to acquire. Additionally, choosing a broker that understands the ins and outs of an accountancy practice means they are more likely to know what objections a potential buyer might use to try and negotiate the price and so will be able to offer you advice on the reasonableness of any offer.

Confidentiality is often a key requirement when selling an accountancy practice and a specialist broker will understand your need for this. A good broker will go to great lengths to protect your identity in the marketplace until you are ready (or not) to reveal that you are selling your practice.

A specialist broker in your sector will also understand that there are multiple ways for you to exit the practice if that is what you want to do. It doesn’t always have to be an all or nothing scenario and this also helps them match you to the perfect buyer. This cuts down on time lost through buyers not fully understanding your exit strategy and should reduce the time required to complete a deal.

As you don’t usually pay the sales fee when using a specialist broker to sell your practice then you really have nothing to lose but everything to gain using a good broker. They should help take away the stress, be able to reassure you throughout the sales process and offer advice and solutions to make sure the deal is completed and everyone is happy with the sale.

Making Retirement Work for You

christine@practicesales.co.uk (Christine Lukies) — Thu, 18 May 2023 13:14:00 GMT

It's never too early to start planning!

If you are thinking, after the last few years, that now is the perfect time for you to take a step back from your business by either selling up and retiring or cutting back on your working hours then here are some things you might want to consider.

If selling up and retiring is your goal, then it’s never too early to start planning. It is likely that once you put your Practice up for sale it is going to take a few months to complete the deal. So, use the time to make sure that your future is going to look exactly as you imagined.

Doing nothing might sound idyllic but drifting through your days without purpose or goal can quickly lead to mental health problems, particularly if work is an important part of your identity. According to the charity, Centre for Ageing, those who felt they were in control of the retirement process had better outcomes in retirement.

Planning and preparing for your retirement will give you a sense of control and purpose. Whether you decide to start exercising more, eat healthier food, take more holidays, or volunteer, the simple act of re fashioning your life post retirement can help the transition from worker to retiree status.

If you don’t feel quite ready for the role of retiree then working less hours is a good alternative. You can still sell your Practice but work on as a consultant during an agreed transition period. This allows you the opportunity to step away from the day-to-day operational management of a practice but carry on working, which can help with feelings of self-worth. It also allows you the time to start introducing other interests into your life and adapting to a future away from the office.

Retirement doesn’t have to be an all or nothing step. Working out what is best for you is the most important decision. Here at Practicesales.co.uk we work with people to discover what you want from your future and how we can help you achieve that. Maybe 2021 is the year for the new you to take shape? Why not contact us to find out more about how we can help you achieve that.

The Key to Due Diligence

Tue, 26 Jan 2021 12:26:14 GMT

Making sure you get your due diligence process right could save you a lot of hassle and problems further down the line.

When you buy a practice one of the key steps in the process is carrying out due diligence. It might seem obvious, but a surprising number of buyers get caught out because they haven’t undertaken a thorough due diligence exercise. It’s not about catching the seller out but more about making sure that you fully understand the business you are buying, before you sign the contract.

Here are some of the things you should be looking at:

· The figures that make up the Gross Recurring Fees (GRF). Your seller should provide you with a list of clients and their GRF for the previous 12 months. This is the starting point for calculating the price you will pay for the practice and any potential clawback. You should ensure that the figures do not include one off fees.

· Take a closer look at a sample of clients, particularly large fees and ensure that the clients are still active, haven’t ceased trading, are deceased, or are in the process of being wound up or are insolvent.

· Check the payment history of clients. You are looking for serial bad payers or extended credit terms that have become the norm. These types of clients can be difficult to move to more commercially acceptable payment terms, affecting the cash flow of the business.

· Look at a sample of the files to determine the quality of work and the client relationship. If there is anything that makes you feel uncomfortable at the prospect of completing the negative WIP for any clients then now is the time to discuss this with your seller and agree a solution.

· Check that all the clients have had the necessary money laundering checks carried out.

· Think about how the practice will dovetail with your working methods. For example if you use cloud technology and pricing software to determine fees can you successfully transfer clients who usually turn up with a carrier bag of receipts on the 30 ^th January every year? You will need to take an overview of the practice to determine the value of the client base to you.

· Examine the wider financial data of the practice. Check the statutory accounts and more recent management accounts if possible. The aim is to get a true picture of the practice as a whole.

· Check that the seller has been compliant with the necessary regulatory bodies and that there are no outstanding PI claims. Also, check the history of PI claims.

· If there are staff in the practice you will need to look at their contracts. Remember that employment contracts and accrued rights are automatically transferred under TUPE.

There is a lot to think about when carrying out your due diligence and sometimes it’s tempting to cut corners or think everything will be ok. Our advice is make sure that you give this part of the deal the time and effort it deserves. You could even consider appointing an independent accountant to carry out the exercise for you.

The team at Practicesales.co.uk are happy to offer you advice on the best way forward and are on hand to make sure everyone is happy with the final deal.

Asset or Share Sale

Wed, 02 Dec 2020 14:49:27 GMT

If you decide to sell your accountancy Practice, then a key decision in the process is whether to make it an asset or share sale. There are pros and cons to both approaches and here we look at what you should consider when deciding which is the best option for you.

When deciding on an asset sale (which for the majority of accountancy practices is the sale of the goodwill) the main advantage is that the due diligence process is much more likely to be less intrusive for a seller. But an asset sale comes with some disadvantages, including:

No Entrepreneurs Relief and if you are corporate seller then you will be liable for a double tax charge.
Your clients will all have to re-engage with the new owner of the business, which can result in a higher attrition rate, which in turn could affect the final sales price.
A seller will need to consider any residual lease or property obligations once the practice is sold.
Once the practice is sold it isn’t simply a case of walking away. The practice continues to need an active status until all outstanding debts are collected, which will include any deferred payments for the purchase of the practice.
Run off professional indemnity insurance cover may be needed, which can be expensive.
Depending upon the agreement reached with your buyer there may be a requirement to carry out pre-sale consultations with your employees to ensure TUPE regulations are followed.
And once the transaction is completed there is the cost, time and effort involved in winding up a corporate sale.

If you don’t feel that an asset sale is the best option for selling your Practice then an alternative consideration is a share sale. The advantages of this type of sale are:

You may be eligible for Entrepreneurs Relief.
Everything will be sorted out as part of the sale package and so there should be little to do once the sale is completed.
Your buyer will not need to re-engage with the clients and this should hopefully increase the retention rate, which will help with any clawback provision.
If your buyer agrees to maintain the Practice Insurance then there should be no need for run off cover.

The disadvantages of a share sale are:

The due diligence process will be far more intensive as your buyer seeks to satisfy themselves that all aspects, tax, finance, regulatory, of the Practice are in order.
The requirement by the buyer for increased warranty and indemnity clauses within the contracts is likely to be greater which means….
The legal process will be more complex and therefore more expensive.
Your buyer is likely to require Completion Accounts.

There is no right or wrong answer about how you decide to proceed with the sale of your Practice, but here at practicesales.co.uk we have plenty of experience of dealing with both options. What’s most important is that you find the right buyer, offering the right deal, so that you can move on and enjoy the next chapter of your life.

If you would like to talk to someone about how you can achieve this and what the best option would be for you then please call us on 01823 765085 for free, impartial advice, on what to do next.

Editorial content supplied by Ian Worthington of Consilium 9 Limited

Growing Your Practice

christine@practicesales.co.uk (Christine Lukies) — Tue, 17 Nov 2020 10:31:00 GMT

This is a subtitle for your new post

When you’re looking to grow your Practice do you consider the traditional marketing strategies of market penetration, product development, market development and diversification or do you just carry on with the day to day work and hope potential clients see your website or office sign and give you a call?

In the current climate, hoping for the best might not be good enough, and if your client base is being hit hard by the current trading conditions, proactively increasing your fee base is a necessity not a luxury. When other accountants are running to catch up you could be ahead of the pack, so when the downturn ends (and it will) you are well placed to capitalise on the business that’s available.

A straightforward way to increase the size of your Practice is to buy a block of fees or take over another practice. A simple but effective market penetration strategy used by companies the world over and there are certainly plenty of opportunities in the accountancy marketplace at the minute.

Many of the more traditional sole traders have decided that with the current pressures, on the back of the challenges of MTD and the increasing requirements for operating in a digital world, now is the right time for them to exit the industry. This increase in the number of practices available provides more scope for buyers to be selective, allowing them to choose to buy a practice that has the best fit with their current operation.

As there are also many smaller practices being sold at the minute this is also an ideal time for accountants who wish to run their own practice to consider going it alone. Buying an established practice, with a client base already in place, takes away the uncertainty of how long it’s going to take to achieve the turnover required to support financial needs. And many of these smaller practices have the scope to be developed, increase revenue and maximise profit with some simple changes.

So, if you thought the middle of a pandemic wasn’t the right time to expand your business, or start your own business, then think again. To find out why this might be the perfect time for you then talk to us about what you would like to achieve and we can help you find the right opportunities to achieve your goals.

It's not all about you!

christine@practicesales.co.uk (Christine Lukies) — Thu, 29 Oct 2020 15:04:46 GMT

It's not all about you!
Why your name isn’t always a good thing.

When people start to think about selling their Practice it’s easy to believe that it should presented to the market exactly as it is. However, with some simple planning and preparation you should be able to maximise the value of your Practice and increase the sale price.

One simple way to do this is through the branding of your Practice. Many practices have embraced the name of the founder/owner/ managing partner as their branding. This is fine, but ideally you need clients to be loyal to a brand, not to an individual. Loyalty to an individual can cause issues when a practice is sold and lead to a higher attrition rate of the client base, which can affect clawback. Good branding, however, can increase the value of a practice and make retaining and acquiring new clients easier.

If you think all of this sounds like a lot of effort and expense for a practice you are about to sell then think again. You don’t need to spend a lot of money to achieve a rebrand and you’ll certainly get a good return on your investment. Creating a fresh brand and updating your web presence has become easier and more affordable in recent years and if you already have a prospective buyer you could work on a rebranding strategy together and share the costs.

Once you have your brand then get straight to work on developing your brand loyalty. A simple way to do this is through regular client communication. Newsletters by email are an easy way of staying in touch with clients and any potential buyer will be impressed with effective brand communications as it means they can continue to be in regular contact with clients once the sale is completed.

Here are a few simple steps that you need to take to change your brand

Define your target audience
What are the characteristics of the majority of your client base? Are they mostly one man bands or do you specialise in a particular market segment, such as hospitality?
Define your brand mission
This is what your company’s objectives are and how you will serve your clients
Research the competition
See what others in the market place are doing, what does their branding look like and what sort of services do they offer?
Create a value proposition
This is what services or feature do you have that makes your accountancy Practice attractive to clients. Simply put – why would some choose you?

If the thought of doing these things yourself brings you out in a cold sweat then you can always get someone else to do it for you. Perhaps one of your team might be interested or you can outsource to a specialist. Set a budget and then talk to a few providers in your local area, or go online to sites such as people per hour and put the job out to bid.

Branding is just one of the things you can do to make your Practice sale ready. If you would like to know what other simple steps you can take to maximise the value of your Practice then visit our website for more information.

Looking to the future: A simple guide to selling a practice

Mon, 12 Oct 2020 14:12:47 GMT

Discover the simple steps you can take to maximise the profitability of your practice when the time comes to sell and identify the benefits of using a broker to increase your chances of a successful outcome.

Health and Wellbeing

Mon, 14 Sep 2020 13:56:38 GMT

A recent survey by AccountingWEB on the wellbeing of accountants has revealed that a combination of long hours, the overwhelming effects of coronavirus workload and the stress of helping clients has had a negative effect on mental health and wellbeing. The sheer deluge of work appears to have taken its toll and although many said their health and wellbeing was now recovering, now that many of the government schemes are ending, others admitted to feeling “burned out”. Many accountants are now asking themselves “what now?”.

M any industry experts believe that the only way forward is for accountants is to embrace the digital world and the COVID-19 situation has only served to highlight that it is now possible to fully collaborate with clients through cloud products, online digital communications and apps. Having the right software to support compliance obligations will also be a vital part of any accountancy practice as HMRC moved to digitised submissions. Keeping up with this type of fast paced environment will not suit everyone and for those already feeling the stress and pressure of the last few months now might be the right time to think about the future of your practice and your role within it.

A Changing Practice

Fri, 04 Sep 2020 13:56:38 GMT

COVID, has for many accountants, changed the way they interact with clients and possibly the way they now run their business. It has disrupted the workplace for everyone and some feel that it is unlikely the industry will ever return to the same traditional working methods previously used. Technology and software have played a key role in making sure that accountants could continue to support their client base and communicate effectively with them as well as support inter office communication.

The days of simply calling, emailing or writing to a client are rapidly disappearing with new ways of interaction being fast forwarded by the events of 2020.

Cloud systems and software have become the new way of interacting with clients enabling the exchange of real time information. Colleagues have been able to work collaboratively and continue with the day to day compliance work.

The use of this technology can help ease the burden of an accountants work load, perhaps even reduce stress. Smaller accountancy practices and one man bands should not dismiss the benefits of implementing this type of technology into their business in order to reduce and plan their workload more effectively.

For some this may simply seem like a step to far and perhaps now would be a good time to consider what the future may hold if the business is unable to embrace a move towards a more technological based practice, as this is not a trend but the future of accountancy.