When you are looking to start your own accountancy firm or are looking to take one over as a certified public accountant, there are plenty of things you need to know about buying an already existing accounting firm.
There are many reasons to buy an accounting firm that is already in practice rather than starting one by yourself. A core reason is related to the cost; if you purchase an accounting firm that is already operating, it will come with the accounts, employees, licenses, and the office already set up, so you will not have to spend the money getting these resources yourself.
But how exactly do you begin the process of buying an accounting firm? Here are the best tips to help you with a successful purchase.
Look For Smaller Firms
In simple terms, if you are looking to purchase an accounting firm, you will likely want one that is smaller, not only because it is easier to purchase but because individuals that run smaller firms are more likely to be looking to sell them in the next few years.
Of course, building the required relationships with these individuals early on can be tricky, and it is well worth seeking advice from a group on how best to approach smaller firms for discussions about sales, so head to a company such as Poe Group Advisors for more information on doing this successfully.
Network!
Looking for an accounting firm to buy is daunting. There are a range of websites out there which list all of the firms that are up for sale, but these can be (and often are) difficult to navigate, as you don’t get a feel for what you are purchasing. So, it’s well worth doing a bit of good old-fashioned networking by attending accounting events where you can directly talk to the individuals who are looking to sell their businesses, as well as getting a feel for the success of any potential practices you may be looking to buy.
Focus of Profitability
You should not be overly focused on the revenue of an accounting firm you are looking to buy. Rather, you should be aiming your sights on profitability.
For instance, it is better to purchase a smaller firm that has a lower yearly revenue than to purchase a larger one and potentially lose money. After all, the majority of people looking to buy accounting firms are looking to build them up. So, it is better to look at the potential gains rather than buy said gains and then lose them.
Look At The Client Base
It’s also worth looking at the client base of any accounting firm you want to take over. If you have an accounting firm that has some amazingly good clients, this is worth more than one that has multiple poorer clients on its books. It can also be worth seeking legal advice in scouting for what makes a good client base and which ones are worth paying more for.
Get Legal Help
Finally, you will always need to get legal help. Any takeover of a company will require a whole team of legal representatives and other agencies to ensure that the process goes to plan. In order to make sure that this is all done by the book, you should always bring in legal help into the process, as early as you possibly can.