Accounting Firm FAQs

Sellers

How is the value of my firm determined?

Some key factors that affect the value of an accounting firm include gross revenue, recurring revenue, profitability and location.

Why should I use a business broker?

A business broker acts as an intermediary, a professional who focuses on completing the transaction. An experienced broker will be able to protect confidentiality, attract qualified buyers, successfully manage the due diligence process and bring the parties to the closing table.

How long will it take to sell my practice?

Plan on a four to six month window of time to sell your practice. If your practice is priced right and your records are organized and detailed with a desirable physical location, the sale will move much quicker.

What expenses should I plan on incurring?

Typically, the seller should expect to pay the business broker's commission and a portion of the closing attorney's fees.

Buyers

How do I find a practice for sale?

In the competitive world of acquisitions, it makes sense to use the services of a specialized broker. Many times, brokers are aware of practices for sale that are never advertised on the open market.

Where do I find financing for the sale?

It is important to use a lender with experience in financing accounting practices due to the difficulty of financing "soft asset" deals. Speak with your agency broker to get in touch with the leading lenders in the industry.

What expenses should I expect?

In addition to paying a portion of the closing attorney's fees, the Buyer may also incur costs for corporate registration, fictitious name registration, recording of any notes/liens and initial operating costs.

What are the options for the lease?

When purchasing an accounting practice, a buyer is usually presented with one or two options – purchase the real estate or lease the space. If leasing is an option, it is likely that the seller is already under a lease. While assuming a lease may be an option from the landlord, consider asking the landlord to provide a new lease under similar price and terms as the existing lease. This will provide a number of benefits. 1) The buyer may be able to extend the lease, thereby securing the location for a longer period of time. 2) The seller may be released from the lease due to the ipso facto situation. By the existence of the new lease, the old lease becomes null and void. 3) The landlord benefits from a longer occupancy time.

 

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