How long does it take to sell your accounting practice? This is sort of an open ended question. It will strongly depend on a few factors. Obviously location is going to be a major component. When selling your practice, firms located in a major metropolitan area will likely sell much faster then firms set in a rural setting. We have sold practices that we listed in December and sold by January 1. These firms are typically in a major metropolitan area.
Size of the practice will also have an effect on how long the practice is available. The larger the practice; typically the more complicated the transaction. Larger numbers means more heads. The buyer will probably need to obtain financing, which brings the banks in. Obtaining financing can take up to 4-6 weeks and will require information from both the seller and the buyer to provide to the lender. This process will be predicated on the speed at which the buyer and seller can provide this information to the bank. Smaller practices are more likely to be cash deals where the buyer can just write a check. Much less time involved for both sides.
Asking price and terms are also a serious factor. Price the practice too high and you will probably receive some inquiries but no real serious offers. Price the practice too low and you leave money on the table. The deal has to make sense for both sides. There is no doubt it is a seller’s market as we see way more buyers than sellers, but buyers are also looking for a deal that makes sense.
Seller’s willingness to provide information and desire to sell the practice will also affect the speed of the sale. The buyer will require confidential information for their review and due diligence. The seller must be willing to divulge their tax returns, financials, office location, accounts receivable aging reports, etc. The sellers organization and overall speed to provide this information will help speed up the sale. Most of our clients provide this information on a very timely basis. This helps the buyer in confirming their decision to purchase. They are comfortable that the books are in order and that the seller is really looking to sell and not just kick some tires.
