Seller Info

Sale Preparation:

Getting your business for sale is comparable to getting a house for sale…hence the term, ‘getting your house in order.’ Any business owner that is seeking an exit strategy, through sale of their business should focus heavily on the preparation process, prior to the sale. The packaging of your business, will play a pivotal role in the sale process, from listing to closing.

The first two questions asked by most potential business buyers are, “what is the gross revenue, and what is the EBITA.” The higher you can push these figures, the higher your potential sale price will be. Managing your business in a manner consistent with keeping these figures strong, will ultimately get you the price you are seeking. In addition to the management of the revenue and EBITA; the documentation process is vital…not only as it relates to revenue and expenses, but general business practices as well.

The cleaner the bookkeeping and accounting records are, the more accurate the financial statements will be.

Management of your accounts payable and accounts receivable in a clearly delineated manner will assist any potential buyer in a seamless due diligence process. Ensure you maintain monthly bookkeeping, complete with account reconciliations and recording of expenses and revenue. Keep records of asset purchases, loan documents as well as extraordinary expenses. When you utilize the consulting services of Tax Firm Sales for aide in selling your accounting practice or tax firm; we work with you to build a business profile, complete with financial statements. The cleaner the bookkeeping and accounting records are, the more accurate the financial statements will be, thus creating a higher quality value in your practice.

The complete documentation of pertinent business practices is also a valuable tool used to increase the value of your accounting practice or tax firm. Who are the employees? What are their key duties, weaknesses, strengths, contacts, compensation, non-competition restraints and feelings towards working through a transition? Building employee profiles can assist a buyer in analyzing the strengths and weaknesses of the staff and plan their own transition plan. Who are your most trusted vendors and what services do they perform? What do they charge for these services and would you recommend continuing the relationship? Who are your top 10 clients and what services do you perform for them? Are they aware that you are seeking a sale? Do you believe they would be supportive of a transition and how would you facilitate that transition? What other services do you believe your accounting practice or tax firm can expand upon and what are your competitive restraints? What are the challenges to running your practice? How can you improve them? Can they be improved prior to a sale or are they processes that a new owner would have to tackle?

These are all questions that prospective buyers can and most likely will ask while evaluating your practice. It is better to be upfront with buyers and solidify a trustworthy relationship. No business is perfect, if you say yours is, the buyer will most likely not believe it…there is always room for improvement, they just want to be the ones to do so. Being upfront will be appreciated and can aide in sometimes embarrassing discoveries during the due diligence process. Tax Firm Sales encourages a strong open line of communication between buyer and seller; if there are issues of difficulty to be discussed, this is where you bring in your consultant…preserve the relationship, lean on your consultant to work through uncomfortable issues, especially in relationship to pricing.

The more documentation the better, you have worked long and hard to build a strong business, why undercut your price when a few simple steps can assist in maximizing it. Let Tax Firm Sales help ‘get YOUR house in order.’

Choosing Your Representation

Services Summary:

  • Business Practice Sale Identification
  • Consultative Valuation Services
  • Business Marketing Services
  • Buyer Pre-Screening/Pre-Qualifications
  • Buyer/Seller Negotiations
  • Employment Contract Negotiation Assistance
  • Financial Statement Preparation
  • Tax Advising
  • Financing Identification/Assistance
  • Geographic Marketing (part of profile creation)
  • Marketing to database of Qualified Buyers
  • Business Plan Assistance
  • Entity Formation Services (buyers)
  • Closing Processes

Why choose Tax Firm Sales to be your consultative solution to transition your business? Because we are the experts in this field. As owners of our own Certified Public Accounting practice, we understand the difficulty in growing this type of practice and the importance of choosing the right successor. We work to not only identify potential buyers, we also work with them through a pre-qualification process to ensure they are able to legitimately complete a purchase of an accounting practice or tax firm.

Our strong salesmanship in marketing accounting practices and tax firms has resulted in buyer identification in less than a week, at top price!

Our consultants offer a complete range of services starting at the identification of your accounting practice or tax firm. We work with you to prepare your practice for sale, build a profile to market it, assist in valuing your practice, pre-screen buyers, facilitate meetings, negotiate sale process and close your business…we are there every step of the way. Our strong salesmanship in marketing accounting practices and tax firms has resulted in buyer identification in less than a week, at top price! We don’t settle for a flat one-time gross method and our directory of potential qualified buyers is vast, spreading nationwide. Not only do we work to negotiate the sale and locate the buyer, we also assist the buyer in identifying financing options and qualifying for them through preparation of required documentation. We are hands on consultants who believe in strong, frequent communication with our sellers and our buyers and we also believe in fast seamless business transitions. All too often, a consultant will create an introduction between buyer and seller and then they disappear and leave most dealings to the buyer and seller. Consultants with Tax Firm Sales are there every step of the way to assist in creating and preserving a strong relationship between buyer and seller. We are there to provide information, seek answers to questions from either the buyer or seller and work towards a smooth profitable transition for both buyer and seller. Specializing in strong business, we at Tax Firm Sales want to be part of a continued success of a new owner. Offering industry low consulting fees and industry high hands on consulting services, we at Tax Firm Sales are ready to assist you in your next successful accounting practice or tax firm sale transition, every step of the way!

Don’t Shortchange Yourself

  • Gross Revenues
  • Growth Trends
  • Assets Included
  • Staff Strength
  • Debt Service
  • Competition
  • Geographic Location
  • Management Style
    • Absentee Managed
    • Owner Managed
  • Financing Options
  • Seller’s Discretionary Earnings

What should you sell your practice for, or better yet, what CAN you sell your practice for? There are many factors that contribute the price you can collect on your accounting practice or tax firm. One-time gross should not be the only factor considered when considering a fair price for your practice. There are many factors that should be taken into account, including but not limited to the list on the right.

Although not an exhaustive list, the factors on the right are items we at Tax Firm Sales take into consideration when assisting in the valuation of your accounting practice or tax firm. All too often, sellers believe that they can take matter into their own hands, put a price on their accounting practice or tax firm and do everything themselves. The fact of the matter is, having a consultant assist in the transition process will not only assist in obtaining a higher price, but in most circumstances, sellers can walk away with more money in their pocket (even after fees) and less headache/heartache than dealing with the process alone. Not only does the use of a consultant ensure you don’t short-change yourself, it is a crucial contributor to a strong pre/post transition relationship between buyer and seller. This relationship, although more important to some rather than others, is one that should be preserved; not only does this work in the best interested of the transitioning parties, but it is the best thing for the employees and the clients involved. Don’t be fooled by one-time gross plus commission consultants; buyers want to truly understand what they are buying and why the price is what it is. Let the consultants at Tax Firm Sales assist in correctly valuing your accounting practice or tax firm and showing that value to the best buyer.

Let Us Get to Know Your Business

One of the reasons utilizing a consultant is helpful, is the process of pre-screening and pre-qualifying potential buyers. We at Tax Firm Sales want to get to know you and your business. The more we can understand what your goals are and how your business operates, the better we can communicate this information to potential buyers, maximize your price and eliminate those that don’t qualify for purchase. Instead of explaining your practice over and over to buyers who don’t even qualify for a purchase, let your consultant do that work for you! We don’t want to be a simple introduction, we want to be a critical part to the successful transition of your business. The more we can understand the operations of your business, your exit strategy, your staff members and your overall transition goals, the better we can work with buyers to identify the right fit.

Confidentiality is very important with Tax Firm Sales.

Confidentiality is very important with Tax Firm Sales. We do not openly market the name of your business (unless pre-authorized, more the norm for Franchises); we require all potential buyers to submit a Non-Disclosure Agreement as well as personal financial statements and buyer questionnaires prior to discussions between buyer and seller. We spend a substantial amount of time talking with buyers and discussing the nature of the business at hand; our goal is to not send a buyer to an seller until they are ready to submit a Letter of Intent (LOI); the meeting with the seller and buyer should be to solidify information provided and answer any questions that are ‘burning’ in nature. We advise against price discussions between buyer and seller, this should be reserved for consultant conversation, on both sides. Ultimately, it is the seller that decides to accept or reject the offer proposed. We will work with the buyer and seller to get them as close to their goals as possible, once the LOI is submitted, it is then in the hands of the seller to move the process forward. You must feel comfortable with the offer presented, you should be excited to move forward through a transition with your offer; if you’re not, then we will continue to find the best fit for your accounting practice or tax firm. Spending the upfront time with the consultant to understand your business and understand how the consultant will market your business is well worth it. A strong relationship between seller and consultant will make any transition more seamless and will maximize the benefit for the seller all around.

To Guarantee or Not to Guarantee

Closing Process:

If you have entered the closing process, let us first say Congratulations on this very big step! There is still a lot to do to facilitate the closing of your accounting practice or tax firm sales. You can guarantee your Tax Firm Sales Consultant will be there every step of the way. Processes to consider while going through the closing process include (not exhaustive list):

  • Identify your escrow company (may be independent or attorney)
  • Ensure the following agreements are in place with signatures from both parties:
    • Leases (if applicable)
    • Employment contracts (if applicable)
    • Franchise agreements (if applicable)
    • Purchase agreements
    • Bill of sale
    • Seller financing documents (if applicable)
  • Creation of amortization schedules and outside or seller financing documents
  • Corporate transfer documentation
  • Formation of new entity (if applicable)
  • Transfer of employee documents and records
  • Cutoff of Accounts Receivable / Payable
  • Cutoff and transfer of Work in Process (WIP)
  • Transfer of marketing information
  • Transfer of vendor contacts
  • Transfer of client contracts and contact information
  • Transfer of utility bills
  • Transfer of property keys
  • Transfer of supplies and/or reimbursements for pre-paid expenses (pro-rations)

The closing process is detailed, but is the last step and should be celebrated; a deal is never a deal until it’s closed…lean on your consultant with Tax Firm Sales to facilitate the closing process.

Many accounting practice sales or tax firm sales are now accompanied with some form of revenue guarantee offered by the seller to the buyer. At Tax Firm Sales, our goal is to minimize guarantees. This is more reason to ‘have your house in order,’ and document the successes of your business through historical trending. Proving the success and opportunities associated with your accounting practice or tax firm will minimize the need for potential guarantees. Although a seller should hope for the success of the buyer, it is not their responsibility to ensure it. A strong documentation process, validating the performance of the business, along with a strong transition plan should aide the buyer in the continued strength of the business. Business owners run their companies differently than others may; therefore, revenue guarantees shift business management risk to the seller, when they (in most circumstances) won’t have control over how the business is managed. It is difficult to guarantee something that you have little control over. Guarantees, when offered, should be evaluated for appropriateness and risk to the seller. Work with your consultant at Tax Firm Sales to discuss guarantees and the need for them during the transition of your accounting practice or tax firm.

Transition Support…What’s Expected:

Transition plans can vary dramatically from one purchase to another; there is no perfect model to follow for an accounting practice transition. Most sellers prefer some level of commitment from the seller to continue to be a visible contributor to the practice. Sellers expect to support a new buyer in a transition and some are more open than others to what level of support they will provide. Typically, included in the sale price is a pre-negotiated number of hours that the seller will provide (at no charge) to a new buyer to assist in general transition (including training on the business, payroll, billing, understanding clientele, general business issues of importance). Beyond general training, if a buyer wishes to retain the services of the seller as a professional employee or consultant, the buyer and seller must come to an agreement on compensation after the included transition support.

There are many issues to be considered in a transition plan, the three key areas include: employee management; client management and duties of the new owner.

There are many issues to be considered in a transition plan, the three key areas include: employee management; client management and duties of the new owner. Getting to know the employees and what they do – areas of weakness and strength – their interaction with clients and their work capacity will assist in ongoing management. Employees are not always open to change, mainly geared by insecurity in their positions and income; therefore, being supportive to the employees, spending time with them and showing their value is important to do. If the seller is in a position to seek retirement, more involvement with the new owner will be necessary. The new owner will most likely take over the accounts that the retiring owner was managing. Leveraging the knowledge of the seller on their accounts specifically is important. Once the buyer is well versed on the work flow of the practice, identifying duties of staff, seller and new owner will become easier. At Tax Firm Sales, we believe in transparent business sale transitions with clientele. Clients do not want to walk into their accounting practice to find an unannounced new owner. A change in owner of an accounting practice should be properly and professionally communicated to those that make it successful. Buyer and Seller should work hand in hand in communicating this change to the clientele. There are many reasons for an owner to sell (retirement, health, other business interests…just to name a few); communicating the reason for the sale as well as the support to the new owner is a recommended step for the seller to take. Clientele is important to a seller; we have never met a seller who did not want to see continued success of their firm long after their departure. Selecting the right buyer is difficult and buyers should feel privileged at their selection; sellers should be happy to provide their recommendation to their loyal client base. Large clients should be personally introduced to a new owner, by way of the seller. Take time to consider the clients. A successful transition will show in the retention numbers.