This article is an excerpt from our new book, “Prepare your CPA firm for a sale.” Which can be downloaded at poegroupadvisors.com/prepare.
Often, for whatever reason, people find themselves needing to sell quickly, and they wonder, “What can I do to spruce up the practice to make it as favorable as possible?” I put these things in the category of curb appeal. There are quick things that you can do to help your firm present better to a buyer.
How would a buyer see your firm?
Ask yourself, “how would a buyer see my firm?” If you have a traditional office, is it clean? If a buyer walks into the owner’s office, are there piles of paper everywhere, or does it look pretty tidy? Buyers want to buy a practice that’s easy to operate. The systems need to be easy to understand. The records should be easy to follow. The work papers from one year to the next must be consistent, and there should be an easy system to replicate and review the work and understand the files.
Another important factor involves the numbers. Do what you can with the time that you have to make the practice look good on paper. Many practitioners have old accounts receivables. Not that buyers are buying the accounts receivables, but if there are a lot of slow-paying clients, that doesn’t look good. Do what you can to clean that up. Slow-paying clients could mean no-paying clients, and a buyer wants reliable income. Trying to collect old receivables is always helpful.
Some systems changes can be relatively easily implemented. If you’re almost paperless, you can go ahead and finish the transition and become fully paperless. If you still have a server but also use a couple of applications, you could easily switch to the cloud and eliminate the server. That shift is attractive. No one wants a server with an uncertain and unpredictable lifespan. Even if you’re mostly virtual, some simple changes can have a big impact. We recently spoke with a client who had a small-town practice. She had almost completely turned her firm into a virtual one, but some things were still in the traditional mode. She was still meeting with a handful of clients in person. I encouraged her to go ahead and make her firm fully virtual. This small change will help get the practice sold much quicker, especially in a small town.
Third party impressions
It may be helpful to ask a friend or colleague to come by your office and give their impressions or do a walkthrough. It’s amazing how that stack of papers in the corner you’ve blocked out of your mind can be a problem, and someone else can spot it right away. Poe Group Advisors has been brokering accounting firms for over twenty years and we are always happy to be a resource. You can reach us at poegroupadvisors.com or email us at firstname.lastname@example.org
Longer Time Frame
We’ve been coaching accounting firm owners for quite some time and have found that if they have a strong reason to change, they will. Selling is a big event. It’s a big life shift and connecting with the reason you want to sell makes implementing firm improvements more manageable. If you have a few years to make your firm more valuable, check out Accounting Practice Academy, an 8-week workshop to reduce owner hours and increase cashflow. Next
session begins in October and it’s a great way to get your firm in the best position for a sale.
Ready to chat about your firm? Book a call and we can go over your firm’s valuation and ways to improve your firm for a sale.