Having spoken to a large number of Buyers over the last 18 months, there is a common theme when it comes to the information they would like to know to take things to the next step.

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As a Accounting Practice Broker, my aim is to supply a potential Buyer with as much information on the Accounting Practice that I am selling. This comes in the form of an Information Memorandum, a Business Profile or a Business Prospectus. The IM typically gives a Buyer a great deal of information to make an informed decision to take things to the next step which would be to sit down with the Seller to discuss the opportunity.

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The information that I obtain from the Seller can be categorised in two parts – The Business and the Book. The information is broken up into the following:

 

The Book

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• Profit and Loss over the last 3 years (With Add-Backs included)

• Projected Turn Over and Net Profit for the current year

• A Spreadsheet itemising the client base

  • Number of Clients

  • Client Number (names replaced until Settlement)

  • Industries clients belong to – Building, Medical, Retail etc

  • Turn Over of each Industry above

  • Year the client became a client – So I can display longevity of each client

  • Turn over derived from clients who have started 1,2,3,4,5+ years

  • Fees invoiced to each client for the past 3 individual years

• Service Offering – Accounting, Compliance, ASIC Management, Tax Planning, Bas Lodgement, Bookkeeping, SMSF, Audit etc

• Average Fee across each Service Offering

• Total Fee across each Service Offering – Compliance = $42K, SMSF = $67K etc

• Location of Clients

• Age of Client – Average age of client 53 years of age etc

• WIP and Debtors profile to nearest Financial year

• Year to date Income Statement

 

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The Business

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The business information is a bit more vanilla. Remember, you are selling to a fellow accountant who would more often than not, prefer to delve into the Numbers over the Business.

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The information I provide a Buyer would look like the following:

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• Practice Snapshot

  • Key points of the business to set the tone of the document and the Buyer can begin to visual what the practice looks like from a business point of view.

• Practice History

• Client Information

  • Description of the types of Industries they belong to

  • Location of the Clients

  • Age of the Clients etc

• Demographics of the business

• Key Staff information

  • Staff member ID

  • Staff member qualifications

  • Staff member position  - Senior Accountant, Tax Principal, Graduate etc

  • High level overview of staff and staff dynamics in the practice

  • Principal's tasks and duties – Mentor, Business Development, Outsourced CIO

• Software utilised in the practice – MYOB, XERO, BOX etc

• Social media and online presence

• Current Status of the Practice

• Post Sale considerations – Principal would like to move on, or stay in. Seller would like practice to remain in current premises over the Retention period

• Plant and Equipment List

 

Typically I obtain this information through a series of meetings with the Seller where I ask as many questions about the practice as I can. After taking copious amounts of notes, I will put together the Business Profile.

In terms of the “Book or Fee” information, I will give the Seller a format that I would like the information to be displayed in. It is up to the Seller to put together this information as it would be inappropriate for a Broker to do this.

 

I take great pains to present the information of the business in a manner that is easy to read for a potential Buyer and has a high rate of success in moving the Buyer to the next stage of the sales process. Collecting the information can sometimes take weeks but it is important to shine as much light on the operation as possible.

 

Steve Scotland

p. 0410548821   e. Steve@TDMango.com.au