The Age Old Question
If its true that it’s a seller’s market, why do I need to incur heavy consultancy fees using an agent or a broker when, as a professional, I should be able to sort out my replacement myself? After all, I know my clients, my staff and my business better than any outsider ever could.
Why You Need Help
We call it ‘objective professionalism’. The sale of the goodwill of an accounting firm is probably the biggest financial transaction that will ever be undertaken by the principal(s) of a practice The selling process is vital and professional advice is fundamental to a worry-free experience.
As a seller (vendor) you will be understandably concerned that the purchaser may not retain your clients, giving rise to a claim under the claw back clause which could cost you dear. You need advice with marketing so that you are confident that your anonymity will be retained so that neither your staff, clients nor competitors will be made aware of the sale until you can introduce the new owner to them in a controlled manner. Expert, objective advice is vital in the selection of a short list of suitable buyers because if you don’t have strength in depth, you may move forward with a selected buyer only to find you have no immediate replacement if he drops out. Also, if you sell to the wrong buyer, you may get the highest sale price but suffer extensive ‘claw back’ claims at the end of the first year.
What if the purchaser over extends himself and cannot make subsequent payments or dies while you are still an unsecured creditor? Should you sell to a first time buyer or a long established local firm; sole practitioner or group practice? Can’t the fees be serviced from my offices or should I let the buyer integrate them into his offices? What if he ‘hikes’ the fees once he takes control, and clients leave? Could I be storing up trouble which will erupt when the purchaser slaps in a big claim under the claw back agreement?
APMA’s Track Record Speaks For Itself
To our knowledge, during the past 10 years or so, no practice whose sale we have brokered has lost more than 5% of the fees bought, during the warranty period. In fact, we are more used to purchasers billing up to 115% of the fees they bought! Like it or not, the new owner is usually more ‘bright eyed and bushy tailed’ than the vendor, who has often become jaded and less enthusiastic about generating more business from his existing clients, let alone going out there and finding more clients. There is often a need to make way for new blood – but that’s no reason to give your goodwill away! APMA’s unrivalled experience is not only based on a 100% successful selling track record during the past 40 plus years, but has answers to the many pitfalls which you, as an inexperienced seller, cannot hope to have.
APMA Will Take Your Cares Away
How? By calling on our 40 plus years experience selling fees! We have a formula for success which has been refined over the past four decades plus enabling the boast that Jeremy Kitchin has not failed to sell a practice or block of fees within the agreed parameters during the past 3 decades plus.
So How Is It Done?
We send you our Selling Fees Pack, available free of charge from our website, which includes a questionnaire and blanket letter of confidentiality. Once completed and returned we will arrange a time to visit you during which we get to know you, your firm and your requirements. We will discuss in detail the mechanics of how we would proceed with the sale of your practice/fees. This meeting is likely to last up to 3 hours.
A few days later you are sent a draft letter of engagement and our proposed marketing strategy, prepared along the lines agreed, to identify those firms to be targeted with a personal letter and, if appropriate, the cost and timing of advertisements to be placed in the specialist accountancy press. We also give you a valuation and the complete sale package you may expect to receive.
Marketing & Short Listing
When you have approved the contract, which regulates how APMA is to proceed, we implement the marketing and handle all the response. Those respondents interested in purchasing your practice must complete a paperwork screening process, including signing a Letter of Confidentiality and to confirm that they have funds available. While this is taking place, you will be preparing your Client Schedule analysed under headings that we will provide. We will then produce a short list of all those firms that have completed our ‘assault course’ showing themselves to be ready, willing and able to buy. By this time 75% of the purchasers will have dropped out.
Short Listing & Due Diligence
You will normally be asked to choose up to 8 firms and we will arrange ‘face fitting’ interviews, one after the other, usually at a neutral venue. Following these interviews, you will produce a final short list of between 2 and 3 firms to each meet you again and carry out due diligence in your offices, this time outside business hours. But before this takes place, each firm will have been asked to discuss their outline offer with me.
The Sale & Afterwards
As a result of these second meetings you will be in a position to decide who you wish to sell your practice to. We will assist you in drawing up the Heads of Agreement Document and Draft Sale Agreement, both of which can be purchased from this site, and advise on the commercial clauses which should be included in the contract drawn up by your solicitor. Finally, we shall be available to arbitrate, if necessary, if there are any disagreements when the claw back clause ‘kicks in’.