Preparing Your Accountancy Practice for Acquisition – Part 3!
Welcome to part 3 of how to prepare your Accountancy practice for acquisition!
Over the last two blogs we discussed how important it is for you to have in your mind’s eye exactly what you want to achieve from the sale of your Accountancy practice before you even start the process…
And exactly how to make that happen…
From both your perspective and the perspective of the acquirer!
If you are only just joining us, then check out our first two blogs to get yourself caught up and then you can round it off with…
This third and final blog!
In this week’s segment, we will go through the importance of preparing a sellers pack and carrying out your own due diligence.
Let’s get started!
Prepare a seller pack.
A seller pack is a specially prepared pack put together by you the exiting party.
It outlines your proposition, and includes client make up and key financial information.
Why is it important?
Well, it helps you to focus on what you want to achieve out of the sale and what is important…
**Remember we said at the beginning, that roughly 2 years of planning and preparing before starting the process is best to ensure you cover all your basis.**
Well this is essentially putting your thoughts and planning onto paper and presenting it to the acquirer.
Having the seller pack won’t leave room for doubt or potential discord and it will let acquirers know that you are serious in your deal.
Do your due diligence.
I cannot stress enough how important this is!
You might think that because you are the exiting party then the act of due diligence doesn’t apply to you.
If you don’t carry out your due diligence then how can you be absolutely sure of your acquirer’s ethical and financial position and intentions?
Would you hand over your life’s work over to someone you don’t know?
No, you wouldn’t.
Your due diligence on them is as important as their due diligence on you.
The ‘sale and purchase’ agreement.
Once the due diligence is completed and you are approaching the closure of the deal, you will be provided with a sale and purchase agreement.
Before you get to this stage it would be wise, if you could attain a sample of this document due to some SPA’s running to 100 pages long.
It will help you if you know your way around the document beforehand.
The ultimate payday.
The ultimate question that you will hopefully have a clear answer to…
How do you want to get paid?
Whether it is a one off lump sum or a longer term of payments based around a lifetime income…
Make sure you know exactly which method of payment will best suit you and the lifestyle you want for yourself after you have sold your business.
Consider the timing.
Make sure you are familiar with the statutory notice periods that you need to give to your network and insurers.
It is important to let all these people know in good time, so they don’t think they are an afterthought.
It is also cost effective. Considering your costs for PI, regulatory fees and authorisation, these are usually paid in advance for 12 months with little or no refunds for cancellation during the year.
We hope this checklist gives you a strong idea of how to go through the process of preparing yourself and your Accountancy practice for sale.
This blog has two main aims…
We want to assist you in achieving a premium price for your Accountancy practice, whilst being comforted in the knowledge that your business is going to be well taken care of by its new owners.
And to stress the importance of preparation.
Because as cheesy as it sounds, if you fail to plan then you plan to fail…
And that saying is so true when it comes to getting the best for your Accountancy practice sale.
Best wishes,
Steve Hagues
PS. Click here, to speak to one of our experienced and dedicated consultants who can:
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