When making any type of business acquisition, there is much to consider, and that is certainly true when acquiring an accounting practice. Many people do not know where to start looking for an accounting practice for sale, and searching the local classifieds is not always enough. Websites such as BizQuest, BizBuySell, and PrivatePracticeTransitions.com are a great place to start. Once you find an accounting practice for sale that you think may be a good fit, you then want to make sure that it has the five essentials listed below.
Accounting businesses typically have repeat clients and referral sources, so they do not rely on walk-in traffic. However, the location of the accounting business for sale is still important. You want to ensure that the practice is well-established and that it has “roots” in the community. This is an indication that the business is stable, and will also show current clients that even though the ownership may change, little else will.
One of your top priorities, when you buy an accounting practice, should be the type of clients and services that are provided. Is the practice focused on individuals? Businesses? Audit? Perhaps a mixture? Does that fit with your career goals and match your ideal client mix? Also, ask how often the business meets with clients. If it is only once a year, then you will want the previous owner to remain on at least one year to ensure a warm handoff of those client relationships, while firms that meet with clients quarterly or monthly will make it easier to help existing clients through the transition.
The Transition Period
The current owner may want to play a large role in the business during the transition period after you buy an accounting firm. They may want to offer advice and information on certain clients and what they need or provide insight into certain processes. You may find this helpful, or you may not, so you need to determine how involved you would like the previous owner to be in the firm once you are officially the new owner.
The most important factor to consider when looking at accounting practice for sale is revenue and cash flow. In short, how much money does the firm make and when does the money come in? This will tell you how profitable the business is, whether there are any negative cash flow months and other key performance indicators that are essential to know when taking over a business. When you buy an accounting firm without first looking at its financials, you are essentially buying it blindly.
It is hard to believe, but some accounting firms still use mostly paper documentation, or they rely on outdated platforms that are no longer efficient. This will not only make operations more difficult once you take over, but it will also cost you more in the end as you will have to invest in new technology that will serve you and your clients better.
Our Washington Business Brokerage Can Help You Find the Right Accounting Business for Sale
When you want to buy an accounting firm, you should not do it alone. At Private Practice Transitions, our Washington business brokers can help. We will ensure that you understand all of the most important aspects of any business you want to buy and that the transaction proceeds as smoothly as possible. When you need help buying an accounting firm, call us at (253) 509-9224 or contact us online to learn more about how we can help.