Are you looking to sell your accounting firm in West Hartford, Connecticut? Maybe you have run your accounting firm for several years and now see retirement on the horizon. Or possibly you have grown tired of the numbers game and want to try a new career. There are several good reasons to want to sell an accounting practice. However, before signing on the dotted line, there are a few things to consider to ensure that both you and your potential buyers get the best out of the exchange.
Selling Your Accounting Firm in West Hartford?
Make a Clear Plan
A savvy business person knows that diligent planning leads to success, but rushing in without planning leads to disappointment. If you see retirement on the horizon, now is the time to prepare the sale of your accounting practice. Start by addressing the things that you can control, such as creating conditions conducive for a successful sale or merger.
You can plan your exit up to three years before the sale. Selling an accounting practice is a significant decision that requires time and planning. Regardless of how profitable your accounting firm is, you may find it harder to get the appropriate buyer than you might think.
Accounting practices in Connecticut typically sell for the equivalent of one year’s revenue. However, if your firm has a down year or two, its value can drop significantly. During the planning phase, you want to bolster the number of clients you have and sell when the firm’s value is at its highest.
Understand the Factors that Impact the Value of Your Practice
In determining the fair value of your practice, you must remove emotion from the equation. Your business may be valuable to you because your parents passed it down or because it has been an integral part of your life.
However, a potential buyer will be concerned with quantifiable things, such as the strength of your firm’s customer base, its ability to generate recurring revenue, and the services offered. Staff retention, the size of the team, and how your firm has invested in technology also play a role. An accounting firm in West Hartford may sell for a higher value than a firm in an isolated location with fewer customers.
Firms priced between $400,000 and $800,000 are the most attractive to buyers. This doesn’t mean that if your firm is valued less than that or in the millions that there’s no market for it. But you will have a smaller pool of buyers to choose from.
The terms of the sale will interest potential buyers. How much cash do you want upfront? What will the payment plan look like? Some buyers will pay a percentage of revenue upfront as a sign of goodwill. It’s good to know what you need from the sale and transmit that during negotiations.
Build Strong Relationships with Your Clients
When the time comes to sell your business in West Hartford, know that buyers are interested in your clients. That is what they are buying from you. In the lead up to the sale, work hard to keep your clients happy. Until the sale is finalized, don’t tell them about the upcoming change. Keep it confidential, but strive to make a strong link between your clients and your brand.
It is not always easy to sell the business in West Hartford that buyers want. However, if you are dealing with high employee turnover, are unsure about your future, and are ready to merge or sell your CPA firm, Fusion CPA can assist you.
Fusion CPA is a Georgia-based accounting firm interested in small to medium-size accounting firms in West Hartford, Connecticut. Click the link below if you are interested in selling your practice or discussing a merger. We look forward to having a no-obligation discussion with you today.
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