Spending years growing a successful CPA, bookkeeping, tax planning, and financial adviser business in Alpharetta, Georgia, is often challenging, but rewarding. At some point, however, it may become challenging to continue working long, exhaustive hours, and dealing with constant employee issues. If you have made the tough decision to sell your business, it could be essential to be prepared and knowledgeable regarding the process of selling.
If you are hoping to sell your firm outright, or if you would like to merge with a larger, more established firm, there are a few standard elements to consider. Buyers will typically have lots of questions that you will most likely need to be prepared to answer.
We are in the market to purchase or merge with other like-minded accounting and tax planning firms in Alpharetta, Georgia. We place a high value on transparency and accountability, so we are interested in learning about your firm's operations, like the types of clients you serve, the history of your practice, and the growth trends you have experienced over the years.
Valuing Your Firm
One of the most important aspects of a firm sale or merger to a seller is how much the business is worth. In order to attract the right buyer and structure a great deal, it could be essential to consider how a potential buyer might analyze your business.
In most accounting firm sales, a simple baseline to establish a firm's value and selling price is typically 1.1 to 1.3 times gross revenue on the high end. However, a better and more realistic, the baseline is considering what a well-qualified buyer would be willing to pay in the current financial climate. Recurrence of revenue, size of the company, location, cash flow, and the terms of the deal will most likely affect the firm's valuation.
Setting the Terms
How much a buyer will have to pay down for practice in Alpharetta, Georgia, could be a critical factor in a successful sale. The lower the down payment, the more attractive your business could be to a new owner. A smaller down payment takes some pressure off the buyer's initial financial investment, as it gives them more time to pay and a higher retention period.
The retention period is a defined part of the sale where payments are divided out over the years and are based on the number of clients retained and revenue collected. When a company sells or merges with another firm, customers loyal to the seller might not feel comfortable with the new owner. Therefore, there could be a real possibility of some clients choosing to leave, reducing the book of business. Allowing a more extended retention period allows the buyer to pay a percentage earned of the actual collections each year. Additionally, it could provide a more extended period for the buyer to build a new business.
In some firm sales in Alpharetta, Georgia, the seller might agree to remain with the company in a specified capacity for a defined period. This could help in the transition period and make customers feel more comfortable about staying with the firm. If you are looking to merge or sell your practice in the Alpharetta, Georgia area, we want to could be an interested buyer. We also consider mergers in this area with established companies, and we could work with firms that need CFO business advisory services. Whether it is a complete sale, merger, or CFO business advisory partnership, we are here to help you position your business for a successful transition.
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.