Selling your accounting firm is a big move – but let’s be honest, the first thing you’re probably wondering is: How much can I actually get for this thing?

I get it. You’ve spent years (decades?) building this practice. You’ve navigated tax seasons, client emergencies, and maybe even the occasional panic attack over an IRS notice. Now, you want to be sure you’re getting what it’s worth when you sell.

Here’s what you need to know about valuing your firm for an external sale – no sugarcoating, just the real talk:

1. Cash Upfront: Show Me the Money (Or… Not)

Spoiler alert: Most buyers are not showing up with a briefcase of cash like in the movies.

Expect a down payment between 60-80% (90% is excellent).

The rest? That’s where retention periods and payout plans (Seller Notes) come in.

2. Retention Period: What You Get Depends on What They Collect

Brace yourself—most deals in this industry are at least partially based on collections.

Translation: You get paid a percentage of what the buyer actually collects from your clients over time.

This could be great—or frustrating—depending on how smoothly your clients transition. (Hint: It’s why you want to train your clients to stop showing up with shoeboxes of receipts to chat with you for 2 hours.)

3. Firm Size: Bigger Isn’t Always Better

That fancy office and extra staff? It might look good on paper, but a smaller firm with low overhead can sometimes be worth more to a buyer.

Why? Profit margins. Buyers love a lean, efficient firm that’s not weighed down by rent and payroll. Remote practices go for the highest multiples.

4. Payout Period: Get Ready for the Long Game

Most sales get fully paid out over 3-10 years.

  • Smaller firms: Usually 4-6 years.
  • Larger firms: Could stretch to 10.
    If an SBA loan is involved? You’ll likely get more money upfront, but the buyer will be repaying that loan for the next decade.

What Does This All Mean for You?

The value of your firm isn’t just about revenue. It’s about the terms of the deal, the buyer’s risk tolerance, and how smoothly your clients transition.

Bottom Line:

The biggest deals aren’t always the ones with the highest sticker price – they’re the ones that pay out (and let you actually enjoy retirement).

 

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