The Accounting Practice Exchange provides a platform for professional accountants interested in acquiring or buying into an existing, successful business, rather than going the long and often hazardous route of starting their own.
Our site not only provides a directory of large CPA firms currently on the market, but also businesses that focus on more niche sectors of the financial industry, including bookkeeping, auditing and payroll management. Whether you’re looking for bookkeeping practices for sale – or even if you already have your own business and are looking to expand with bookkeeping clients for sale – then you’re sure to find useful leads on this site.
Whatever your long-term goal, it’s paramount to have a clear understanding of what the pros and cons are in terms of purchasing any kind of business. This page takes a more focused look at bookkeeping, discussing the reasons for and against, presenting some valuable tips on how to carry out a purchase and also presents some alternative options, such as the idea of buying an online bookkeeping business for sale.
The only simple answer to the above question is that acquiring an existing practice improves your chances of success, both in the short and long-term.
But there is a caveat; you need to mitigate major risks, which are:
> Retaining employees
> Retaining clients/accounts
> Conducting a thorough due diligence report
Once these common risks associated with buying any accountancy-relating business have been mitigated, smart entrepreneurs are then able to use these risks to their advantage, giving them the upper hand over other businesses starting from scratch.
We’ll go into how to manage these risks later on (skip to our ‘top tips’ section). But let’s suppose your acquisition goes to plan and you are successfully able to retain the employees and client list of the business – after conducting a full and extensive due diligence check, as well.
What you are left with is an up-and-running business with revenue rolling in from the start. You will already have (hopefully very happy) employees working for you, and (hopefully even happier) clients on your books. You are therefore in a position in which many young entrepreneurs only get to after many years – and many startups fail to reach altogether.
Building up a list of lucrative, loyal clients can take years; in buying a bookkeeping firm for sale, you are essentially acquiring a whole client list after signing on the dotted line – and, of course, ensuring the acquisition funding is in place.
This same notion runs true for employees, too. Starting your own business will mean much of your time and resources are spent on recruitment – with many qualified accountants or bookkeepers already in gainful employment and reluctant to switch jobs.
As well as the top-priority things (i.e. instantly gaining employees and clients), another advantage to buying any kind of business is that you won’t have to sweat on many of the smaller details, which can actually be very time consuming for new venture owners (and after all, time is money). For example, leasing out office space, branding, setting up appropriate marketing strategies, acquiring the necessary business practice licenses etc.
One final advantage worth quickly pointing out is the great value for money purchasing an accounting or bookkeeping business can often present. Providing an initial upfront investment, either through a lump sum or financing the deal through banks, can seem a little daunting for prospective buyers at first. But in reality, many accounting or bookkeeping owners do look for quick sales of their business for relatively low prices, and this is not necessarily a red flag that indicates the poor performance of such business. There are a variety of reasons as to why owners contact us and other online directories who want to quickly sell their business. For example, they might be reaching retirement age and looking to get their hands that cash quickly, while other owners may be switching firms to join partnerships in well-paid positions.
As mentioned before, the most important thing to consider when looking at bookkeeping firms for sale and deciding whether a full business acquisition is right for you is to identify the major risks, and formulate a concrete strategy as to how you are going to not only mitigate them, but also use them to your advantage.
Let’s start with an overview of retaining employees.
Chances are, when looking for a bookkeeping book of business for sale or related business, you’re probably more worried about retaining clients than existing employees after the deal goes through. And this could be a major mistake.
During any business acquisition, an element of doubt lingers over all employees; while they’ll probably be constantly told management that it’s all ‘business as usual’ during the transition process, it’s only natural for employees in this situation to question whether they’ll still be in work in the near future. They may also be eager to know whether they’ll be entitled to the same benefits and enjoy the same working conditions (e.g. Working hours, office environment, job responsibilities) etc.
As the new business owner, it’s your responsibility to take care of each and every concern your new employees have. And this should start at the beginning of the transition process; you don’t want employees to be looking to swap companies just because they have doubts over their positions.
Part of longer-term employee retention involves getting to know those working for you; for example, some may be more ambitious than others, while some might take on job responsibilities outside their scope of work. All of these issues will need addressing with your best HR cap on.
Whether it’s a small bookkeeping business for sale, a payroll business for sale or another other related accountancy practice, the no.1 worry for new owners is whether existing clients will stay on board. After all, this is essentially what your investment is getting you – not the shiny new Macs and ergonomic office chairs for each employee – but that list of accounts.
Here’s the simple fact: If you
> ensure that the transition process is smooth;
> retain your best and most valuable employees (and keep them happy) and;
> do a fantastic job at running your new bookkeeping business (which you have spent years training to do)
…the vast majority – if not all of your clients will carry on their existing business relationship with the practice.
The biggest risk associated with client retention is when new owners focus their efforts on trying to retain 100% of the existing accounts – with each one receiving equal time. This can often mean that client A, who represents 1% of the bookkeeping revenue, will receive the same attention as the next client B, who is much, much bigger and represents 20% of the annual revenue.
The simple way of avoiding this pitfall is to do your due diligence first. Not only will this enable you to establish how the firm operates, but it will also give you an invaluable insight into the payroll clients – i.e. how much each one contributes to the firm’s annual revenue, how much time they consume, and how much effort should be put into retaining them from day one.
Time to start looking?
We hope the information above has been useful. Please feel free to head over to see our diverse range of financial businesses for sale in the US, which includes everything from remote bookkeeping business for sale (or ‘virtual bookkeeping business for sale’), as well as larger CPA practices.