For many accountants looking to run their own accounting firm, purchasing a block of fees, or buying an established accountancy business is a faster route to building their own practice from scratch. It is also a proven way of expanding an accountancy practice for ambitious accountants looking for more growth for their practice.
Accountancy Firm Brokers
There are several accountancy practice brokers available in the UK, with a range of different sized practices for sale, from the smallest sole trader to the largest international practices.
Many retiring accountants or those looking to sell their accounting firm will prefer to use a broker as this will keep their firm’s name anonymous until a non-disclosure agreement has been signed. Naturally for the practices who have employees, they won’t wish to worry them about the handover of their firm to a new owner and will look to minimise any disruption within the business for both the buyer and the seller. Sometimes deals can fall through and the business may need to continue as it was throughout the process.
Brokers also have the advantage of typically having a list of buyers who have previously registered their interest in firms in certain location or within their budget range.
Accounting brokers will likely guide on the sale price, payment terms, process, timescale and financial and legal implications to consider, and will pass on their fees accordingly.
Retiring accountants
Some of the best value deals can be done through your own local contacts and engaging with accountants who may be looking to retire soon. If you’re already running a practice you may have deemed these to be your competitors or you may have heard of them without having met them. To be successful here it’s time to put aside any history and find a way to engage. Consider a direct approach by writing to the practice or by calling and finding out more. Respectfully registering your interest gives you the best possible chance of being considered when the time is right, without any broker fees.
If you are a qualified or part-qualified accountant, then you may wish to make some connections to these retiring accountants through your qualification body and the various events and continuing professional development training meetings that are held throughout the year. While not an easy subject to broach without offending, it will take some time to find out who might be looking at retirement.
There are some accounting brokers that specialise in practice owners that are looking to retire and of course there are some franchisees of accounting franchises that are looking to retire as you will read about next.
Buying from an accounting franchise?
When an accountancy franchise has an accountancy practice for sale, these are referred to as ‘franchise resales’.
Accountancy franchises typically have franchisees within their network who are looking to retire and their franchisor will want to keep a franchise location operational within that territory. Franchisors have a vested interest in marketing resales to find new buyers and continue servicing clients rather than see them leave the network to a local competitor. A good accounting franchise will always support their franchisees to grow and sell to a new incoming franchisee who wants to take the reins of a successful practice. It’s important to do your research here and check any franchise agreements that you will need to sign.
Established franchisors will typically have a list of practices for sale that you can enquire about and you may choose to attend a Discovery Day so you can learn more about life as a franchisee running a tax practice.
What are the benefits of purchasing an existing accountancy practice or franchise resale?
Buying an accountancy practice represents an excellent foundation upon which the purchaser can further develop an established business with an income stream from day one.
When you buy an existing practice you are investing in a ready-made business with premises and practice management systems in place.
Buying an established franchise resale means you are in business for yourself but not by yourself. It can provide the following advantages:
- A reliable income stream from day one
- A nationally recognised brand with goodwill and established reputation which clients know and trust
- Significant potential to grow through opening more offices and shops and selling additional services such as financial services and more complex tax services through a franchisor’s centralised teams
- Experienced staff in place
- Mentoring, marketing and accounting/tax support and training from the franchisor
- Reduced risk in running your business
- Access to funding relationships through the dedicated franchise departments at the major banks.
How is an accountancy practice valued?
The traditional way of valuing accountancy practices is a multiple of the recurring fees of the practice, however, this will vary depending on the profitability of the practice, how it is run, as well as the potential it offers for future growth. Ultimately it is worth what someone is prepared to pay for it.
The market for accountancy practices is buoyant – with strong demand from those looking to buy. This is evidenced here on our own website, with the accountancy practices for sale section, one of the most viewed pages. We also have regular successful franchise resales throughout the year.
Purchasing an accountancy practice is a popular way to invest and grow an existing business. Accountancy services are valued by clients, and with the added support of a franchise, there are many options to diversify and sell in additional, complementary services to the client base, as well as improve efficiencies to increase profits. There is generally a premium on the asking price of a franchise release because of the additional support and increased opportunities available for substantial growth. You will be buying a proven model with solid processes and will hit the ground running to ensure your best possible chance of building the successful accountancy practice that you may be looking for.
Do you have any TaxAssist Accountants practices for sale?
We hope you’ve found this article useful to support your research into buying an accountancy business and if you hadn’t previously considered buying a franchise then we do have a range of opportunities available which can be accessed here. We also have an FAQ section and a guide to the franchise resale process to help with your research and due diligence.
