The Ten Most Expensive Mistakes when Buying and Selling an Accounting Practice


One of the smartest and fastest ways to grow fast is to purchase another practice, especially if it’s undervalued.

The buying process, however, is full of hidden perils. Identifying the right firm, negotiating the right price and integrating the purchase into your practice are three of the riskiest decisions you will ever make as a practice owner. Making a practice sale-ready and selling it for an optimal price is equally risky. The difference in selling a practice for 90 cents in a dollar fees and receiving $1.20 is huge. Yet, buyers and sellers of accounting firms continue to commit costly but avoidable mistakes. When it comes to buying and selling practices, we have learned much about what works, what doesn’t, and why and submit these as the most common mistakes

Mistake 1: No plan to maximize value

Without preparation any prospective offers can only be at the lower end of the scale. All that glitters is not gold acquisitions rarely meet the buyer’s expectations. You do not know when an opportunity may walk in the door. Be prepared! Make your practice sale-ready

Mistake 2: Ignoring ugly financial warts

P & L: Cash lock up, etc.
Balance Sheet: Unrecognised liabilities.

Mistake 3: Lack of preparation time

If you have worked for 20-30 years building, or assisting to build a firm, you’re not going to decide over a weekend what to do. There is much to be done. Whether you are a buyer of a seller, the best prepared usually secure the best deals.

Mistake 4: Delusions of granduer

Don’t delude yourself by expecting an outlandish price (seller or purchaser). Check the market and know what it is really worth. All too often due diligence is not carried out.

Mistake 5: Making a bad first impression

Finding a buyer or seller is a lot like hooking a fish on the line you only get one chance to reel it into the boat.

Mistake 6: Looking like everyone else

Differentiating your firm from competitors can attract new clients and create new opportunities and ultimately may make your firm worth more.

Mistake 7: Running a one-man show

Buckle your safety belt! You are about to begin the most unpredictable race of your life  so you’ll need a good pit crew.

Mistake 8: Letting key assets walk away.

There is a window of opportunity of about 18 months in which cultures may be merged get this wrong and you may finish up just like Stockford Ltd. Ouch!

Mistake 9: Getting soft advice or none at all

Don’t rely upon your own advice and experience.  Effective advisors will push you to achieve higher goals.

Mistake 10: Managing your own negotiation strategy

You don’t get what you deserve in life, you get what you negotiate.

Author: ATL Network: Is your practice Sale Ready?

The five most ‘Expensive Mistakes’ when Selling an Accounting Practice

magnifying-iconWhen you are contemplating the potential sale of your practice, there is a lot to consider and a lot to do. We have come across many situations that have led to really poor outcomes for practitioners. Listed are what we consider to be the five most expensive mistakes you can easily avoid with a little planning and preparing.

Mistake 1. No plan to maximize value.

Without preparation, it is highly likely that any prospective offers will only be at the lower end of the scale. You do not know when an opportunity may walk in the door. Be prepared! Spending the time to analyse you practice and focus on those areas that drive value and those areas that detract value will pay handsomely if done well.

Mistake 2. Ignoring ugly financial warts.

Having unprepared financials can be a real problem – excessive cash lockup, poor debtors management, slow processing of work in progress, unrecognised liabilities such as long service leave, declining revenues due to the loss of key clients, etc. These issues will present ‘red flags’ to potential buyers and should be appropriately managed well before sale.

Mistake 3. Lack of preparation time.

If you’ve worked for 20-30 years building your business, you’re not going to ‘action’ over a weekend, all items to prepare your practice for sale. Most likely, there is much to be done. The best prepared usually secure the best deals. You can do a lot in 6-12 months, but most practices will benefit from a preparation period of two to three years to help them maximise their sale value.

Mistake 4. Head in the clouds.

Don’t delude yourself by expecting an outlandish price. Check the market and know what it is really worth – ‘the market’ is rarely wrong. We would recommend you have a valuation prepared by an independent valuer. Protect yourself by ensuring you have multiple parties interested in purchasing your practice.

Mistake 5. Managing your own negotiation.

You don’t get what you deserve in life, you get what you negotiate. It never ceases to amaze us when we learn of practitioners running their own sale/negotiation process. The long list of expensive mistakes continues to be recycled. Seek quality external advice for the sale of your practice.

More information: Sale Ready Program

Author: ATL Network

Accounting Practitioners – What’s your plan?

Whats your plan

The average age of Accountants in Public Practice is 58 and getting older. Less than 20% of all practitioners have a documented exit or succession plan. So while many practitioners are thinking about retirement and life after their current business few are planning for it.

Like most things in business and life planning and preparation are critical. The value of your business is probable a key to your future so it is time to take a little time focusing on NOW.

Some questions you might be asking yourself are:

  • How can I exit my business on my terms and on my timetable?
  • How can I maximise the value of my business?
  • How can I ensure financial security for my family when I exit the business?
  • How can I ensure my business goes to the party of my choice?


  • Is succession a viable option?
  • If I just ‘put it on the market’ will there be a buyer and what would they pay?
  • How long can I keep working in my business if I cannot sell it?

The importance and need to have well structured exit plan is essential for all practitioners. For many practitioners, their business is a large part of their ‘net wealth’ so improving business value improves their future. As a business owner you want to know how to:

  • What do you need to do so it sells for more rather than less?
  • Who can help you sell your business effectively?
  • How do you exit on your terms and your timetable?

We can help. Call us 1300 79 66 27.