Common Misconceptions When Selling an Accounting Practice
Selling an accounting practice is something most business owners do only once. Due to the fact that most accounting practice owners have never embarked on such an experience, knowing what to expect can cause fear and skepticism in moving forward with a transaction. Fear and skepticism, in turn, can hinder the selling process and make it much more difficult to agree on terms. With that in mind, if you are about to sell your practice, below are the most common misconceptions associated with such sales, and the truth behind them.
MYTH: You Should Leave the Practice As soon as Possible After the Sale
After selling an accounting practice, you may think that you need to exit stage right immediately. However, your willingness to stick around to help the new owner become acquainted with the operation is a really good thing, not only for you and the new owner, but also your clients. It is true that staying in the practice for one “busy” season is the norm, however, keep in mind that each transition is different. A new owner might need you for a shorter period of time (2-3 months), or you and your successor might decide that you can/should stay on seasonally for more than a year. So don’t go into your transition with a pre-conceived notion of what is “right.” ask yourself how long you want to keep working and, more importantly, how long you would want to help with a transition and then be open to something that you had not previously considered. Ultimately, what is best for you and your buyer, or the “win win” will prevail.
MYTH: Another Accounting Firm is the Best Buyer
There have been more accountants working in the United States in the past four years than at any other time, with the exception of occasional dips due to unforeseen circumstances, such as the pandemic. These accountants often go to work for big firms and as such, you may think another firm is the best buyer you could find. However, big accounting firms are typically not as motivated to purchase existing firms at the value you deserve. Individual accountants, on the other hand, are going to be more motivated, which means they will see value in a different (more favorable) light, and are more likely to move forward with a transaction on agreeable terms.
MYTH: The Average Price of Accounting Practices Determines Your Asking Price
Surely you could find somewhere online that would give you an average price of accounting firms. However, there really is no average. Perform a quick Google search for accounting firms for sale and you will see that prices range from just over $100,000 to over one million dollars. This is because truthfully, there is no average price when selling an accounting practice. Every buyer will place different values on different aspects of your accounting firm. One buyer may not be willing to pay what you want, another may be willing to pay much more. When selling an accounting firm, you need to objectively consider all factors and establish a price you feel is fair for you and the buyer.
MYTH: You do Not Need to Work With a Business Broker in Washington
It is true that you are not required to work with a Washington business broker when selling an accounting practice. However, if you do not, you might fall victim to fear, skepticism, or one of the above misconceptions. And, as a mentor once told me early in my career: You do not know what you do not know, and you may not realize it until you make a mistake that costs you money. If you are selling an accounting practice, the knowledgeable brokers at Private Practice Transitions can help. Call us today at (253) 509-9224 to schedule a meeting and to learn more about how we can assist with your sale.