Buying a CPA practice is a major step and not one that should be taken lightly. When acquiring a business, you need to be sure it is the right fit for you, otherwise there will be a lot of headaches down the road. When finding the accounting practice you want to buy, due diligence is necessary and critical. It is important to do your market research and to find out as much as possible about the particular practice of interest.
Much of the information you need can be gleaned through outside sources, but there are some things only your seller will know. For this reason, you need to know the right questions to ask before you jump in.
What is your reason for selling? First, you need to know why the person is selling their CPA practice. It could be that they are retiring, getting into another type of business, or leaving the area. These are all legitimate reasons for selling. On the other hand, they may be selling because they are not happy with the way the business is going, either because of financials or simply the stress of operating it. Pay very close attention to the answers you receive to this question. If you are speaking to the seller face to face, pay attention to their demeanor as they give you the answer. This may reveal whether or not you want to move further into the process.
How much support are you willing to provide? When you buy a business, even one you are very familiar with, it is important to have some level of ongoing support as you transition into ownership and become more comfortable with the operation. Many sellers will be willing to offer training and support for a certain period. The seller may be willing to be available for at least 6 months to a year in a consulting role. This will help you deal with issues that may arise during the early months of running the practice.