Selling Your Accounting Firm In Virginia?
We Look at Things to Consider When You Want to Sell or Merge
There are endless valid reasons to want to sell your accounting firm in Virginia. We're going to look at some of the things to consider when selling and these can be applied to your mergers strategy as well.
Regardless of why you may look to sell or merge, it is crucial for you to identify the right candidate for your business. This will give you the peace of mind of knowing that your current clients will be well cared for and that you get the most out of selling or merging your accounting firm.
Then you can start an alternative career path or plan for retirement. Exciting!
We're looking for firms in these cities
And small towns in Virginia as well
How Do You Know the Fair Value of Your Virginia Practice?
There is no single metric that is used to determine the value of an accounting practice. Profitability is a major consideration, but it’s only one of several factors that are being considered.
For example, the strength of your customer base and its ability to generate future revenue, the services you offer, and the concentration of your clients all play a role in the value of the firm. Other factors include whether staff must be retained, management practices, and past investments in technology.
Location is also important. Selling a firm in Virginia Beach, Richmond or Norfolk may mean higher revenue. Firms in these big cities also tend to sell more quickly. Conversely, firms in smaller cities with a reduced client base may take longer to sell.
Plan Ahead for the Sale
Much of the success of your sale will depend on the steps you take in the lead up to putting your firm on the market. Now is the time to focus on creating the best conditions within your firm. Many financial professionals encourage business owners to study their options between one and three years before they are ready to sell.
Selling an accounting firm is a major decision that requires meticulous planning. It may take more time than you realize to complete the sale.
You might sell your practice for the value of one year’s revenue. However, other factors, such as the timing of setting the price, waiting too long to sell, or being inflexible, can affect the value of your firm and minimize the number of potential buyers.
Envision Your Reasons to Sell Your Firm
The reasons you want to sell your firm will impact the price you will accept for it and who you will sell it to. Some are looking to sell their firm and then use that money to invest in a new venture, pay off debt, or handle other financial responsibilities. Others are tired of high employee and client turnover, they are unsure about their future, or they just want to take a break.
Understanding your reasons for wanting to sell will help you when determining the terms of the sale. What percentage will you require upfront in cash? What subsequent payment plan would you be willing to accept? You may want the new owner to pay you a percentage of revenue until the negotiated amount is reached.
Selling a practice can engender mixed feelings because it is a serious life change. If you have had your accounting practice for decades, it is a part of who you are. You have put your blood, sweat, and tears into making your business thrive and want to know that your business, your employees, and your clients are well cared for after the sale.
At Fusion CPA, we understand the business and the emotional side of selling an accounting practice. We are looking for accounting practices in the Virginia area. If you are interested in selling your practice or want to discuss a mergers strategy, contact us today. We look forward to discussing potential prospects with you.