What Does a Successful Deal Look Like?
We spend a lot of time at Poe Group Advisors talking about and studying what goes well and what works in our business.
We love to celebrate when we close a deal. Usually the elements of a good deal are very simple and fall into three broad categories.
Let’s face it, some practices attract more buyers than others. There are hot markets and “not so hot” markets. That said, every practice has strengths and the key is to identify and highlight them! For example, here are a few questions that can help:
• What is really working in your practice?
• What would a buyer see as the three top positive aspects of the practice?
• What makes your staff great?
• Why are your clients so loyal?
• You just went paperless? Great, let’s make sure that we use that as a selling point when we market your firm.
(To learn more about what drives accounting practice values, download our free report.)
Buyers talk a lot about seller motivation. They want to hear about what the seller is doing next. Does the seller have a clear vision and plan for their next job or plans in retirement such as travel? Will the seller move and respond quickly? When Poe Group Advisors, a potential buyer, or the bank makes a request, will they be willing and able to gather information very quickly? Great sellers are also very positive and have integrity. They want the buyer they choose to do well by their clients and staff…and will work very hard to help make that happen. Being transparent is also very important. We like to say “show your warts”. If there is something happening like a slow paying client, it is important to make sure that buyers know this early on. Buyers will value the honesty and will not be worried that there are things lurking around the next corner.
A good buyer knows what is important to them without being inflexible. For example, does the buyer want a tax practice? A motivated buyer will realize that you might need to take on a few bookkeeping clients in the bargain to get most of what you want in a practice. Our successful buyers most often have an entrepreneurial spirit. Many have worked for someone else and have decided that if they are going to work extra hard anyway, they might as well work for themselves. Buyers who can implement successful transition are able to be roll with the punches and expects some hiccups. Inevitably, surprises can and do occur both before and after closing. A good buyer will be solution oriented to work through those surprises.
All of our deals look and feel different but there are patterns. Our philosophy has been to always take note of what works so we can keep repeating that success for our clients.
About the author: Stephanie Smith is a Senior Accounting Practice Intermediary with Poe Group Advisors. Click here to learn more about Stephanie.