Who is the Ideal Buyer for your Accounting Practice?
We frequently ask this question of practice owners who are considering the sale of their practices. The answers are as different as the practice owners that we speak with.
Let me first say that this question first makes a very important assumption. That assumption is that you, as the seller, are not going to work for a long transition period along-side the buyer. You will not have a year or more to mold this person into the practitioner of your dreams. This means then, that you will not have a “clean-slate” to work with.
The simplest and not-all-that-serious answer is “someone who can write me a check.” The best answer I’ve heard is “I’d like to find someone who is just like me.” That is actually quite a good answer with one exception…the buyer needs to be motivated to own the practice. If you are selling, then you are necessarily motivated to do something else, so you need a buyer who is properly motivated.
One of our three primary goals when we sell an accounting practice is to help your buyer succeed after closing.
There are several critical components of success to consider. Here are a few important questions to consider:
- What is currently working well in your practice and what needs improvement.
- What is your management style? What do employees expect and are they productive?
- What reporting systems do you have in place to manage the workflow of the office?
- Do you value-bill or time-bill or some combination?
- How would you describe the culture of the office? Casual/formal…etc. How do people dress?
- How would you describe your approach to tax planning/preparation? Is it aggressive, conservative, or somewhere in between?
- What is it that your clients value most about your services?
- What level of technical complexity does your practice encounter?
- What values have shaped your practice?
You can’t just find a buyer that is technically competent. All of the “soft” skills are the real difference maker. In fact, I would say that personality, risk tolerance, and management style are more important than raw technical skills. Technical skills can be learned much more quickly in fact.
If you are highly conservative in your approach to tax, an aggressive new owner might make your clients very uncomfortable. If you have created a warm, family environment among staff, and you sell to someone with a much more formal approach, then the staff might not stay over time. If you are in the habit of being very patient with clients and your buyer is too quick with them, then that can cause problems with client retention. A “rusty” buyer with great people skills can overcome the technical obstacles.
Another important element of success…maybe the most important is energy and enthusiasm. What is an owner without it?…probably someone who wants to sell!