Things you should do before you sell your practice
- Analyze the nature of your clients and how they will react to the announcement of the change in ownership of your practice. Give serious thought to how much work shall be required on your part to have these relationships continue with your Successor. If you have a major client whose departure would greatly impact your Successor (and you as Seller), acknowledge this. Give thought to what can be done to maintain this client in the practice. Quite possibly you will have to continue with the “sold” practice for quite some time as fragile relationships are slowly transferred to your Successor. You need to sit back and ask yourself the following question: “If I were buying this practice, what would I require from the Seller to ensure the success of this acquisition?” Your answer is exactly how you should approach this sale.
- Sit down and map out the tax consequences of your sale. Some Sellers later determine that they are not prepared for the tax consequences dictated by a sale and subsequently abort when presented with an Offer.
- Terminate problem clients and replace staff members who should be replaced.
- If there is a loan on the practice, contact the lender. Find out if there is a pre-payment penalty. You need to know if such a condition applies to your loan. We have had some Clients completely blindsided in the final phases of a sale when they then learn that there is an onerous pre-payment penalty on their loan.
- If you are selling to retire, do analyze what your life shall be like without the practice. It might come as a surprise but some Accountants feel a complete loss of identity once removed from their practice. Will this happen to you? You should determine if you have enough activities in your life to keep you busy and challenged. A busy and challenged schedule shall dictate a long and happy retirement. Plan ahead!