This is the most often ask questions by both buyers and sellers. There is no real answer to the question as the practice will ultimately sell for what the market will bear. True market value cannot be determined until the product is brought to market. That being said, there are important factors that both the buyer and seller will look at to gauge the asking price and terms when being brought to market.
A few important factors when determining price for an accounting practice:
- Location (rural or metro area)
- Profitability
- Employees
- Owner’s ability and availability to transition
- Average billing rates
- Historical revenues
- Mix of client services
- Certified or non-certified practice
There are many other factors involved, the above is just a snapshot of some of the most frequently used to assess value.