Preparing to Buy a CPA Practice

There are a number of steps to consider before buying a CPA or Accounting Practice. It is very hard to purchase a CPA or Accounting practice in a metro area. Some things to consider: demand is strong, there are always multiple buyers, and usually, there are multiple offers on these practices.

So, how do you differentiate yourself? Here are six steps that will substantially improve your success chances.

Table of Contents

Be prepared to submit a bio

Be prepared to submit a bio and have one representing you as you want to be seen. If you have tax experience, make sure that the bio clearly describes this experience and any other experience that will help convince the seller that you have the right skills. Most sellers and good intermediaries will require this before you meet with any potential seller.

Have your mode of financing already pre-determined

Have your mode of financing already pre-determined. There are banks that lend specifically to CPA’s (practice solutions group), and most banks will do an SBA loan for a practice. The seller usually supplies some financing as well. That being said, a buyer should have already had a conversation with a lender and know the way to proceed. This will show the seller that you are prepared and are taking this seriously.

Listen to the seller

Make sure to listen to the seller. Most buyers come in with their canned questions, but they forget to really listen to the answers. There are incredible clues, and some sellers will be bold enough to tell you exactly what they are looking for. If you listen, you can differentiate needs vs wants and the items that will be the most important to the seller.

Be prepared to write an LOI or purchase agreement

Be prepared to write an LOI or purchase agreement within a day of meeting with the seller if your investigation leads you to believe you want to proceed; there should be no question in the seller’s mind that you want to buy the firm. The speed with which you move will give you a distinct advantage. While others decide how to structure the offer, you already have an offer on the table.

Have both binding and non-binding components

If you are writing an LOI, the LOI should have both binding and non-binding components. The LOI should contain an exclusivity clause and a confidentiality clause, as well as a response time that is all binding. An open-ended LOI just gives the seller time to pull in other offers. The LOI should also provide the seller with something you think they may want but may not be expecting.

Outline your timeline

Be prepared to outline your timeline and give definitive dates where there will be a purchase agreement, loan application, loan approval, final contingency removal, and close. Showing the seller how you will move through the transaction will help them see the milestones and commit to the project plan.

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