Six Steps to Selling Your Practice Cont....

6. Seek Professional Help
The selling of an accounting or tax practice is tremendously different then the selling of almost any other business or professional practice. This is mainly due to the fact that these deals include retention periods, are structured differently than traditional buy/sell agreements, may start off as a merger with an ultimate buyout, include exposure concerns and accounts receivable issues, plus much more. Having someone who has personally handled at least six transactions of this nature, specifically relating to the industry, is key. The benefits to the seller, and to the buyer as well, include:

The proper intermediary can exchange information without providing each other the names, can screen the buyers to ensure financial and professional requirement to close the deal, and can provide the advice that comes from experience.

When dealing directly with each other, emotions can kill many deals. Remember, the buyer wants to pay the least and the seller wants to receive the most. These are adversarial positions that can be softened by the right intermediary.

Time kills all deals for many reasons. Having a good intermediary or advisor should not only better protect both parties, but also speed the process along.
There are strong needs for expertise in the drafting of these agreements. Without experiencing multiple closings specific to this field, how could a mediator fully protect both the buyer and seller? For example, every buyer wants a contract containing representations clauses that would protect him from items that cannot always be uncovered through due diligence. A seller who is providing a retention period needs protection that ensures the buyer is properly accountable for retaining clients and servicing them within certain constraints. These are the types of things that protect both parties and create positive deals for everyone.

Conclusion
The decision to sell your practice may be difficult. But, the actual process doesn't have to be. One of the first questions a buyer may ask is why you are selling. Are you getting out for health reasons, burnout, or do you simply desire to change your specialty? Are you retiring? The answer will help you to establish the type of successor you will need. Being aware of the reasons you seek a sale will be important in many ways as you go further into the process.

For questions or information regarding Mergers and Acquisitions please contact Max Krotman at mkrotman@globalforceintl.com

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