Myths of Selling an Accounting Practice

Source: AICPA CPA Insider

• The seller must stay with the practice for a long time after the sale—There are two reasons why this may be a myth:

   

  • It is difficult to get clients to pay attention to the buyer when the seller is present. So the transition may be easier when the buyer spends time alone with clients.
  • There may not be enough for the seller to do, or enough money to pay for his/her time.

• The selling price for a practice will be determined by the average selling price of accounting practices—In reality there may be no practices that sell at the average price. Factors affecting the value include location, characteristics of the client base, quality of staff, earnings, etc.

• Once a value for the practice is determined, the next step is to find a buyer—This is a myth because the value is not the same for all buyers. Buyers’ abilities and willingness to pay vary. Sellers should try to identify all potential buyers, then choose the ones willing and able to pay the most.

From AICPA CPA Insider, May 7, 2007, www.cpa2biz.com. For the complete article, click here.