Selling Your Accounting Business In Maryland?
Things to consider when putting your accounting business up for sale in Maryland
There are several reasons for contemplating the sale of your accounting business in Maryland. Health, retirement, the desire to start another business venture, or difficulty keeping pace with accounting technology may all play a role.
Regardless of the factors behind your decision to sell, it will take knowledge and preparation for you to get the best results. The goal is not only to ensure a good sale but also to ensure a smooth transition.
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When Is the Best Time to Sell an Accounting Business?
The right time to sell your CPA practice will depend on your specific situation. Your health and the health of your spouse are always things that you want to take into consideration. Also, you will need to think about how you want to spend your retirement years.
If you are a workaholic looking to continue to work part-time until you are no longer able, you might be interested in an arrangement that allows you to merge your accounting practice with a more structured firm. If you are looking to make a clean break and enjoy retirement, you might look to sell to someone who will pay a substantial amount of the value of your firm upfront and then make regular payments until the agreed-upon amount is met.
The best time to sell your CPA practice is when you are ready to walk away and can get the optimal value from your firm's sale to fund your retirement, to pay off debt, or to start a new venture. But you can start planning now.
Choosing the Right Timing of the Sale
Many businesses have slow and busy cycles that impact cash flow and revenue. If you are a compliance-focused practice, then tax season is busy for you. Or many of your clients may work in seasonal industries, such as tourism.
You should know the effect that the timing of the sale will have on a potential buyer. Buyers may be reluctant to invest in your practice when you have weak earnings.
Your accounts revenue can play a role in the sale. Money that clients owe you for work you have already done can be considered revenue. However, if you try to claim that revenue after you have closed the sale of your practice, you may put undue pressure on the buyer. Most buyers want a quick return on their investment. The last thing they want to do is have to pay you more immediately after the sale.
Some sellers have timed the sale of their practice so that the buyer gets control of the practice just before the most profitable time of the year, giving the buyer what they need to start off on a strong foot.
Prepare for the Sale in Advance
Your accounting practice will command optimal value if you prepare for the sale a year or two in advance. During this prep time, you want to step back and look at things from the standpoint of a potential buyer. Ask yourself what you would find attractive if you were looking to acquire a new firm.
Your firm’s financials should be in order. One would expect that an accounting practice would have coherent and comprehensive financial statements for the past few years. Buyers are interested in your employees, your clients, and the trajectory of your firm. Are you adding or losing clients year after year?
Here is where preparation can pay dividends. Use the time in between now and the future sale of your business in Maryland to add new clients. This will allow you to show buyers that your practice is moving in the right direction. You can look at our process improvements checklist. Some firms have hired marketing consultants to help them put together a plan to get new clients. If done properly, the results may pay for the investment.
Talk to Fusion CPA About Selling or Merging Your Business in Maryland
Fusion CPA is a Georgia-based CPA firm that is currently interested in buying accounting businesses for sale in Maryland. If you are ready to sell your CPA firm, you want to retire, or you are looking to merge with a more structured firm, we want to talk with you. Click the button below to set up a no-obligation consultation with our team today.