Knowledge is Accountancy Power

Knowledge is Power!

For most accountancy business owners that I have worked with, growth is key to increasing profits.

Another important thing I have learned is that organic growth is hard earned!

Therefore the quickest and in some cases the most sensible thing to do to achieve growth and increase profits...

...is acquisition! 

Acquiring a business however, is not always straight forward. In fact, for first time accountancy buyers it could be the single most costly business decision that they ever make.

So acquiring the wrong business is simply not an option!

In fact, mistakes of any kind are likely to lead to significant losses and must be avoided...

...To help make sure that they are, I've compiled a list of the 5 key things to remember when buying an accountancy practice!

1) Decide what it is that you're looking for.

Purchasing a business is often times the biggest expenditure that any firm can undertake...

...so it's important to make sure you get it right!

Size, location, cultural fit. These things are all of paramount importance when considering exactly which businesses you are going to be looking at in terms of acquisition prospects. 

2) Do your research!

It has oft been said, that if you fail to plan, then you plan to fail...

...now this may seem somewhat simplistic, but in this instance it is absolutely true. You need to ensure that you have all of your own finances in order and are in a position to acquire before you even start thinking about it. 

3) Ensure that you undertake full due diligence.

Following on from point number 2, once you have got yourself ready and have worked out your target. It is crucial that you establish that you establish that the business is as advertised.

I can't count the number of times I have spoken to clients who have gotten to 6 months post-acquisition, only to find that there was an obvious reason that the business was for sale in the first place...

...I can tell you, this reason is rarely good.

4) Consider working with a broker.

If you've done your research and haven't found exactly what you're looking for, then the next logical step is going through professionals.

Brokers work with hundreds if not thousands of businesses a year and so have a much wider net to cast...

...therefore they are far more likely to be able to find a suitable acquisition target and also likely help take a huge amount of weight off your shoulders when it comes to the nitty gritty.

Engage the right brokers and the route through acquisition will always be much smoother.

5) Draft the right sales agreement.

You've done all the hard work, found a target, now it's crucial that you ensure the draft agreement is in place and written up correctly.

Make sure you used an experienced and reputable acquisitions attorney here, it is not an area to be trying to save costs!

Your brokers will be able to point you in the right direction here. Make sure you are thorough and leave no ambiguities.

If you follow these 5 steps then you will be well on your way to ensuring a successful acquisition and capitalising fully on the solid foundations of organic growth that you had previously been built on.

For more information on the acquisition process and the 18 essential points for due diligence to ensure you don't get ripped off, download our free e-Book by clickinghere.

I have worked with thousands of acquirers in over a decade in the industry, and these key points are guaranteed to make sure that acquisition runs smoothly.

Hear about how to spot the real goodwill value of a firm and spot a brilliant investment here. 

Best Wishes,

Steve Hagues

PS. Uncover the 5 most common major mistakes made when acquiring an advisory business and how to avoid them here!