Firstly, how do you find a buyer? Most sellers are understandably concerned about confidentiality and do not want the local business community to know that they are considering selling. The fear is that staff may become unsettled and look for other jobs; clients may start to look for other accountants and competitors may actively target your client base, repeating the rumour that you are about to retire. Many firms can identify a local firm that they believe would be interested and will approach them directly provided they are happy that confidentiality will be maintained. Alternatively, you may choose to employ a practice mergers and acquisition agent to represent you. This allows for the initial exploration to be anonymous and signed confidentiality statements put in place before information is exchanged.

The price that you get on a sale depends on a number of factors. The desirability of the practice, the amount of fees involved, property issues, the pattern of payments sought and the extent of any warranties or claw back all affect the price. Typically, the price for smaller practices (say fees up to £400,000) will be based on a multiple of fees, either gross recurring fees or gross fees. Conversely, the price of larger practices (say fees of £1,000,000 or more) will often be based on a multiple of super-profits. This is the surplus profit after paying a salaried partner to take over the portfolio of the exiting partner.  The typical multiple will be three or four times super-profits, although as always, individual deals can vary significantly.