We look at some sale and mergers guidelines for accounting firms
Negotiating the terms of a merger or sale of an accounting firm usually includes several factors ranging from client retention and the initial down payment to the buyer's expected profitability and duration of the payout period.
Merging or selling your accounting firm may be a decision you're making as a baby boomer who has decided it's time to retire. You might also be a younger entrepreneur who is seeking the security of a well-established practice. In both scenarios, you're likely interested in understanding the typical terms associated with this type of deal and what you can expect to get paid for your accounting firm.
Figuring this value requires an analysis of several factors, which can include size, anticipated profitability, location, and nature of your practice. Negotiating and determining the terms of a deal is more straightforward and easier to understand when the following factors are examined:
- Client Retention
- Initial Down Payment
- Buyer's Expected Profitability
- Payout Period Duration