Many business types grow through acquisition, tax practices and CPA firms are such businesses. If you think about it, it would take a very long time and a lot of money in marketing to get 100 new clients. If you market to 1000 people, you would be lucky to get 30 people to even call you back, and out of those you might close a few. So growing through acquisition definitely makes sense in this industry.
When determining whether the practice is a good fit you, there are several key components. Whether it’s a tax service business or a CPA firm, how many of the clients are mail in and how many require a "face to face" meeting. If it’s mostly mail in, then Geographic's don't matter much. However if there are a healthily percentage that require a meeting and your office is too far from the main demographic, then will most likely have a much higher attrition rate.
Another consideration in with CPA firms or Tax Practices, the billing rate should be on par to what you are currently charging. If your rate is approximately $250 an hour, don't buy a practice that bills at $150 an hour, thinking that you'll be able to implement a rate increase with these clients. Rate increases are very touchy and they can be increased but after a few years when trust has been established. Trying to do that in the beginning of the transfer will ensure a disastrous attrition.
It's important to look at the type of business the business is doing. Are they doing personal returns, corporate fillings, booking keeping, etc… you want to find a business that not only compliments your current client base but also you’re skill set. If you’re going to take on a lot of work that’s getting done throughout the year make sure that you have the staff to support it. You are not an Island and during the first couple of years of the transition the clients will be watching you and how you handle them the previous person might have earned some grace after 15 years but you have none and must be at your best.
Finally be ready to pounce! These types of businesses get sold quickly so be prepared. Know what you want, have your proof of funds ready and a resume of the current practice that you’re running. The seller is going to want to know who you are for two very important reasons. One he/she has known these people for a long time moist probably and he doesn’t want the accounts to be put in the hands of someone unprofessional or incompetent. Not only would he feel terrible but he will most like field all the "bad" calls for quite some time. Secondly, these businesses are most always sold with a note and some type of guarantee. The seller will have a vested interest in your success, so he’ll be interviewing you as much as you’re interviewing him.
Stay tuned for more articles regarding buying and selling CPA Firms and Tax Practice Businesses.
About The Author: Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Christina Lazuric CBI CBB, Business Broker: Orange County
Premier Brokerage for selling Orange County Service based businesses since 2005! CBB provides a step by step approach to Business Brokerage, M&A Services, Business Consulting & Valuations. Contact me about selling or buying service based businesses: 949-257-7823 Cell.
|Chris Seaman, Business Broker: Southern California
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
|Peter Siegel, MBA: Business Purchase Financing Solutions
Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.
|Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs
Founder Of BizBen.com (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.
|Rick Carlson, Business Broker - Southern California
You Will Never Feel Lost In The Shuffle. Many Brokers Simply Send Out An NDA And That's The End Of Communication. All Buyers Receive A Personal Meeting With An Ace Acquisition Specialist So They Can Recommend The Perfect Business For You. Phone Rick direct at 800-985-4939.
|Ryan Clark, Business Broker: Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.
|Bob Hughes, Business Broker: Coachella Valley Area
Business broker & President of Hughes Properties. I have a wide variety of entrepreneurial experience with personal ownership & sales of numerous businesses, and have sold over 200 small & mid-sized businesses in the Riverside County marketplace. Phone me at 760-275-6914 Cell.
|Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
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|Workshop: Successfully Valuing & Selling Your Orange County Small Business
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