MYTH #1 – I CAN SELL MY PRACTICE BY MYSELF
Many accountants are in the business of helping their clients in everyday business transactions, one of which is valuing and possibly selling their business. Accountants may seem that they can cross over and sell their practice the same way. There are many different considerations that a potential seller may not think about prior to trying to sell the practice themselves; the utmost being confidentiality. Accounting is a professional and personal service business. Word spreading that the owner is going to sell the business may be detrimental to the practice as a whole. The word spreading to the clients, the employees, and competitors may cause a disruption in the day to day business activities which eventually could lead to problems for the practice moving forward. Owner’s trying to sell the practice on their own have immediately conceded trying to keep this a confidential transaction. They must also decide if selling the practice on their own is worth their time. Generally, selling an accounting practice takes a few months. This is time that will need to be spent outside of business owners. This includes marketing for prospective buyers, qualifying and meeting with prospective buyers, negotiating a fair deal for the practice, etc. Hiring a reputable and established 3rd party can eliminate the headaches and dead ends while ultimately achieving the same end result.
MYTH #2 – I KNOW WHAT MY PRACTICE IS WORTH
There are "Industry Standards" and books galore out there that specify what a practice is worth. Accounting practices are ultimately worth what the market will pay for it. Each market is slightly different, which will yield different results. There is more to a deal than just the price; the terms must also be favorable. Net income of the practice, location of the practice, average billing rates, key employees, among other factors will be keys in determining the overall value for the practice. Selling an accounting practice and knowing what the real value of the business is needs to be determined before setting the initial asking price and terms.
MYTH #3 – SELLING MY ACCOUNTING PRACTICE IS JUST LIKE SELLING MY HOME
For reasons stated above, selling your accounting firm is vastly different than selling real estate. In real estate there are established comparables that the realtor can show you to give you an idea of what your home would sell for in the open market. Accounting practices have many more moving pieces other than location and condition of the structure.