Had a letter through the post today from a company specialising in selling accounting businesses. They were offering to give a free valuation and advice about selling a business.
I'm not really in a position to sell, I've got a few more years to go yet. I am tempted though to get them in as it would be interesting to know how much my little bookkeeping business is worth.
Has anyone else been through this process?
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John
Full Time Book-keeper, Dad of 3 Teenage Girls, Part-Time Taxi Driver :)
Isn't the general rule of thumb one to one and a half years normal recurring fee income.
They'll probably tell you more than that to get you to put your business up for sale with them but thats about what accountants will pay for your client stock.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I had a pal that took ill and his dear lady wife offered me all the client list for one years fees. I wouldn't have paid half. I'd no idea he was charging so little and the very few that were remotely realistic would have taken a good learning curve which outweighed a couple of years fees.
Got some recent experience on this, the starting point I was led to believe was 1 years fee income (1.5 sounds better for the seller though) with a pro-rata clawback should the client leave within a year.
I dont think there's any easy answer e.g. the seller might have a unique aspect to their business. I do some work for a Chinese Accountant but would need to be fluent in cantonese to buy their practice.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Yes, I've also heard that 1 to 1.5 times the annual turnover is the ball park value but it would be interesting to hear of actual examples to verify this. I guess that sometimes it may depend on the right buyer being around at the right time.....
