I’m looking for advice on finding firms to buy out. I’ve checked places like APS and BizBuySell, but most listings seem to want full payment upfront. Is it possible to find firms that would allow a 3-4 year payout with a retention clause?
Or are the prices on these sites usually flexible if I negotiate for a longer payout plan?
You could try pulling a list of PTINs from the IRS and contacting firms directly. I was also looking to buy and cold-emailed a bunch of firms. Most didn’t bite, but one guy wasn’t selling and ended up sending me referrals. A year later, he introduced me to a bigger firm, and they’ve sent me a lot of work.
I reached out to my payroll reps, like ADP, and let them know I was looking to buy. I even offered them a finder’s fee if they helped. One ADP rep found a firm run by an older owner who wanted full revenue upfront. I wasn’t into that deal, but he connected me with another firm. We ended up structuring a 20% of retention revenue payout over five years, and the owner stayed on. Now the original contact wants to send clients my way with a similar payment setup, so we’ll see.
TomHarris said:
The attorney who handled my last acquisition (focused on accounting firms) mentioned that around two-thirds of these deals happen without brokers.
Makes sense. APS takes a big commission and often wants full upfront payment. Meanwhile, I’ve heard smaller deals tend to offer payout plans based on collections over several years.
TomHarris said:
The attorney who handled my last acquisition (focused on accounting firms) mentioned that around two-thirds of these deals happen without brokers.
Not surprising. I figure people probably ask around in their network before going to a broker. I’ll message you for more info on your attorney.
TomHarris said:
The attorney who handled my last acquisition (focused on accounting firms) mentioned that around two-thirds of these deals happen without brokers.
Most brokers don’t do much beyond listing a firm as ‘for sale.’
Cael said:
I don’t know of other resources beyond the ones you mentioned, but I’m curious…
Are you starting out solo?
Are you looking to grow an existing practice quickly?
Or something else?
A mix of both. I’ve got a stable workload for myself and an admin but want to boost revenue faster. I’m looking at firms with similar or better fee structures.
Do you know much about how deals work on those two sites?
@Zaren
I sold my practice a few years ago, then took a break and started fresh.
My sale involved three payments over six months, no retention clause.
I’m happy with my new practice now; demand for tax pros is high. If you focus on a niche and find good marketing channels, you can grow as fast as you need.
@Cael
Any advice on your last point? Would you consider consulting or mentoring on client acquisition? If we could boost our client inflow by 3x, I wouldn’t even need an acquisition. We’re growing steadily, but I’d love to speed it up.
I’ve got a small client base, most with over five years’ history. If our fee structures match, I’d be interested in talking about a transaction. PM me if you’d like to chat more.
Lior said:
I’ve got a small client base, most with over five years’ history. If our fee structures match, I’d be interested in talking about a transaction. PM me if you’d like to chat more.
Just messaged you—think you’ll appreciate what I sent. Let’s chat