5) Timing: the closing date is increasingly important, as the percentage of tax return income increases within a company. If in the first place a tax company, the seller will want to sell as little as possible May and the buyer does not want to close until November or December. Many tax practices have a negative cash flow during quarters 2 to 4, so a buyer must negotiate the conclusion with that in mind. The greater the practice, the greater the negative cash flow to be taken into account. A few days later, you panic when you learn that this “perfect” buyer has just offered a job to one of your main employees. He also contacted several of your biggest clients to ask if they knew you were retiring as he offered his services as an alternative. The potential buyer also told several other CPAs that you are “retiring,” and this message has filtered into the general market. You painfully realize that you have never made a written confidentiality agreement with this once potential buyer. You may be wondering how a buyer can make an offer before doing due diligence. It`s done all the time.
Here`s how: 3. Buyers should ensure that their non-competition agreement is applicable under local law. Most legal systems will not have non-competition agreements that cover too much geography or too long. However, your prospective buyer could help you find the person who will replace you as the face of the business. If the buyer`s practice is more attractive to talent, ask them to recruit the person and place them in your business. If this strategy is properly implemented, it can eliminate the risk of sales failure. Before you wade too legally, make sure you ask yourself what I`m comfortable with? Do I have any doubts or concerns? Is the risk/benefit fair? I don`t have any information? Is that reasonable? Perhaps the most important thing is what I intend to be clearly written in the agreement? The key to a successful transition is to have the right buyer for the practice sold; Otherwise, the 4 current concepts do not matter. Make sure that professional experiences, management styles and customer service philosophies match fairly well. Work closely with a professional If you don`t think you can handle the transaction yourself, talk to a practice broker.
They can facilitate the process and will probably improve the result.