If you are selling your CPA practice or firm, or even just thinking about it, what is most likely of paramount importance to you is finding a qualified buyer who is a great fit for your practice while receiving maximum value and maximum cash at closing. You are likely thinking: “Right. Well tell me something I don’t already know.”
Let’s do some critical thinking using the Socratic method: Just how do you foresee finding this buyer and getting that maximum market value and cash? Will only one offer give you enough leverage in the negotiation or do you need a pool of qualified buyers and multiple offers? How much mergers and acquisitions experience do you have? Do you have any experience structuring an M&A deal? Do you have a large stable of SBA and conventional lenders who have a history of approving CPA practice sales with a high price and cash at closing amount? Do you have the ability to maintain confidentiality for yourself in the early stages of the process? Will client attrition be minimized by an individual with comparable experience to yours or a small, medium, or larger firm that is growing via acquisition? Do you have the time to make promotion, marketing, prequalification, negotiation, and selling your CPA practice your top priority – or do you have a CPA practice to manage?
Not just any M&A experience will do. Go to Google and you will find countless business brokers selling day care centers to corporate housing businesses, and more, all on the very same webpage. Don’t you and your practice, your employees and clients, deserve an accounting practice broker comprised 100% of brokers with Big 4 CPA experience, that leads the industry in negotiating maximum value deals with the most cash at closing?
Here are our top reasons for hiring an accounting practice broker. Every reason is a factor that will play a part in determining if you find the right buyer and whether your CPA firm’s value and cash at closing is maximized – or whether you will sell yourself short.
Time and Energy
If you are like most accounting practice owners your time is a finite resource. As far as demands on your time goes, you should continue working to get billable work out the door, retain your current clients, manage your staff, while keeping current with changes in state and federal regulations, etc.
Do you really have the time and the energy that it takes to find the right buyers and then market and promote you business, vet buyers, negotiate the terms of an LOI and the final sale? Most (likely 99.9%) accounting firm owners do not have the time or resources to do even a mediocre job of all of the tasks necessary to put the right buyer in place and derive maximum value and cash at closing.
Identifying the right buyer and bringing competition to the table
This is clearly a case when the amount effort put into the endeavor is directly correlated to the end result. Signing with a business broker who passively lists your CPA firm and the asking price on a website will produce a minimal yield of qualified buyers. A passive broker is unfortunately a strategy that can often lead to the wrong buyer, as well as the wrong price.
We have a massive database of legitimate qualified buyers for generalist accounting firms – as well as every accounting specialty niche imaginable. Our buyers are actively looking to acquire a quality practice and are much more likely to compete for your business – especially because we typically obtain multiple offers for the CPA firms that we are selling. Our pool of buyers tends to be more willing to enter into bank financed transactions and pay the most cash at closing in comparison to your typical competitor down the street. These facts, coupled with the negotiating and analytical skill of Ex-Big Four CPAs, translate into maximum market value for the CPA practices we sell.
Maintaining Absolute Confidentiality
The CPA who approaches selling a firm as a DIY project is most often headed toward disappointment on a grand scale. Confidentiality is often broken by a DIY seller who discusses a potential sale with a buyer who later indicates that they are unwilling to sign a confidentiality agreement. Breaches of confidentiality can occur in the very first phone call or in that courteous reply to an inquiry.
This is because without a broker, the seller identifies himself/herself to all potential buyers at some point before any confidentiality agreement is signed. We have heard horror stories of DIY sellers who have had their employees or clients contacted by potential buyers who said they were not interested and who were unwilling to sign a confidentiality agreement. In such situations, revenue may be detrimentally affected, key staff may leave, and the seller may be forced to reduce the price of the CPA practice for sale or work for as long as it takes to repair the damage.
An accounting practice broker is your shield that removes your massive exposure to this very real risk. Buyers receive no information related to an accounting practice for sale until each buyer has signed our standard nondisclosure agreement. We thoroughly redact the information we send to our buyers to eliminate any identifying information. A large group of buyers will be identified with all but the best weeded out, one-by-one, until we have a short list of buyers who meet all qualifying criteria and who are willing to pay top dollar. The seller is in the driver’s seat and gives us authorization as to which of the buyers on the short list he or she would like to meet. Any buyer not approved for a meeting by the seller will never receive the seller’s name.
Confidentiality procedures any less comprehensive than the above are a recipe for disaster.
What if you are that seller who does have Big 4 M&A experience? Let’s say you can find the right buyer and have the skill to negotiate and structure a deal. Can you also compartmentalize the fact that this your business, and work with the required efficient professionalism to hammer out all the details without sabotaging the relationship with the buyer?
The way we work is that we make the space for the seller and buyer to work on their relationship to support the transition. We are the buffer that prevents nerves from getting raw, which can easily kill a deal.
DYI sellers tend to kill their own deals and rarely get top dollar.
Negotiating and Structuring the Deal
The ability to “walk the fence” between the psychological and analytical sides of a deal is a skill and also a gift. Not everyone is cut out to be a negotiator that understands not simply the analytics of a deal but the psychology of what keeps the seller and the buyer motivated and moving forward to close. We have seen sellers kill a deal by simply standing fast with the analytical side of a deal.
Exceptional ability to negotiate and structure the deal is paramount to achieving a structure that fulfills the seller’s needs while reducing the seller’s tax liability. If not structured properly a seller can lose as much 30 points in a deal to taxes alone. If you don’t believe this, call us.
One of our many value added benefits as Ex-Big Four CPAs and accounting practice brokers is that we create the conditions for you to achieve the best possible the deal structure without unnecessary stress. This enables you to focus on your practice and get on with planning the transition.
If you think you can do it on your own, call us and you may reconsider …
Our Focus is on Your Business
We are a boutique M&A accounting practice brokerage. Nobody is better positioned to achieve maximum value than Accounting Broker Acquisition Group. We have the largest database in the nation of CPAs who are active potential buyers – including all areas of specialization.
At Accounting Broker Acquisition Group we achieve maximum value for our accounting businesses for sale because in addition to having qualified buyers we possesses the gravitas and experience to consistently perform all of the above for our sellers.
Because of our proven methods we consistently achieve significantly higher sales prices and cash at closing for accounting practices for sale than any of our competitors anywhere in the nation. We are the only national business brokerage of its type comprised 100-percent of brokers who are CPAs with significant “Big Four” merger and acquisition experience.
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