Why Accountants Attempt to Sell on Their Own
Undoubtedly, practitioners understand the value that their expertise brings to their clients. We’ve all seen the results of clients who self-prepare their taxes using that well-known tax software (no need to mention names) … Accountants would never advise clients to prepare their own taxes, sell their own home or, if a business owner, to sell their business on their own.
So why does the DIY mentality prevail when it comes to selling their practice? Well, tax and accounting professionals understand financial statements, amortization schedules, taxes, business Law, etc.; clearly, much more than the average individual. However, a professional broker with market segment specialization brings more to the table than expertise in these areas. An experienced broker builds a market for practices that does not exist in a private party transaction.
One buyer provides very little, if any, room for negotiation. A broker brings a large pool of qualified buyers and creates a competitive environment. This gives the seller the opportunity to pick and choose who their successor will be. This is beneficial to the seller and to the clients. The right buyer is just as important, if not more important, than the right price and terms. Ideally, a seller can have both. Simply put, the greater the number of buyers to choose from, the greater the chances of finding the right buyer at the best price and terms.
Another advantage to using a broker is the experience they bring to the table. A skilled broker has knowledge developed from guiding hundreds deals. They know how to navigate these complex transactions, identify warning signs, and are very effective when it comes to calming the emotions of both buyers and sellers. A good broker brings exceptional negotiating skills and the ability to bring a deal to a successful close.
When buyers hear a practice is “For Sale By Owner”, they immediately think DISCOUNT. Buyers understand very well that this results in less competition which translates into a reduced price and favorable terms for the buyer. Another contributor to the DIY mentality is the belief that the seller will net more by avoiding commission. However, analysis of thousands of transactions has proved this to be inaccurate. Even after paying commission, sellers will usually net more in a transaction where they have professional representation.
You’re an expert at running your business–not selling it. Heed the advice you would give your clients; consult with an expert. Contact us today for a free and confidential consultation. It costs you nothing to do so. However, getting this wrong, may cost you a lot!