What happens at a Meeting Day.
At Draper Hinks when we are asked to sell an accountancy practice for a vendor we find out from them where we should be looking for a suitable buyer. This would normally involve some kind of geographical search around their existing office/s. Once we have identified the area we contact suitable purchasers to find out if they are interested in buying the accountancy practice we are selling. On our database at any one time we can have in excess of 900 registered buyers throughout the country.
We ask all buyers to sign our Letter of Engagement that includes a confidentiality clause stating that all information we given to them by Draper Hinks is confidential. Once the signed paperwork has been returned, report of the accountancy practice for sale is sent out. This includes information such as details of what accountancy systems are used, how they charge for their time, information about clients (without names), staff, premises, PII claims, details of any fee protection cover they may have etc etc.
Once the buyer has read the report, if they are interested in meeting with the vendor, they will let us know. We will have allocated a day for the meetings to take place where the vendor will have booked a venue. The meeting day gives the vendor the opportunity to interview a number of potential buyers. Sometimes the meeting days are over subscribed and we have a waiting list. If the accountancy practice for sale is large ie there are several staff members, an office as well as a client base, then we would normally allow an hour and a half per meeting. If we are selling an accountancy practice for a sole trader with no office and no staff then the meetings will be booked in for an hour each.
Each buyer is asked if they have bought before, if they have funding in place and what their turnover is. If they have bought before, they will have relevant experience the vendor can ask about. Funding is important because if the buyer has to arrange funds through a bank then it can take months for that to come through. Turnover is important because a buyer will need to have turnover at least as large as the vendor’s. We have had an instance where someone approached us to buy a practice with fees in the region of £150,000 where his turnover was £10,000 and he was still in a full time job with a notice period of six months. Needless to say we did not book an appointment for the buyer to see the vendor .
At the meeting day the potential buyers of the accountancy practice are given the opportunity to ask any questions of the vendor that they want (within reason). Often Nicola Draper will be asked to attend the meeting day by the vendor. She will chair the meetings, take notes and make sure all areas that need to be covered in the meeting are covered. Sometimes she has had to cut meetings short where there has been a falling out between seller and buyer. In one instance, a buyer attended a meeting day and told the vendor that she had been unprofessional in how she ran her business and had given wrong advice to her clients. Nicola stepped in and stopped the meeting early. In another case the buyer forgot the name of the vendor and kept calling him Malcolm when his name was Simon – that did not help. Nicola prompted the buyer and said that vendors name was Simon but the buyer forgot again. Needless to say in both of the above examples the buyers were unsuccessful in taking things further.
At each meeting the vendor gives some background about themselves, how they started their business, how they built it and why they want to sell. The buyer is then asked to give some background about how they started their business, built it and why they are looking to buy. Why a buyer is looking to buy is probably the most important question that gets asked in the whole of the meeting. It can set how the meeting runs. For example, Nicola attended a meeting day in Bristol and the buyer was asked why he wanted to buy the practice. His answer was because he kept losing clients and so he needed to buy some more very quickly, to replace the ones he had lost. That was another meeting that was cut short.
At the meeting, the buyer of the accountancy practice is given an outline of what the vendor is looking for in the way of a deal ie how the money is to be paid, in what tranches over what period of time, or if a one off fee at a discount is being sought, or an earn out over a number of years. The income multiple will be discussed. A time frame will be given for the closing date for indicative offers (which are subject to due diligence) and when the deal is envisaged to be completed.
Having a meeting day is good for vendors because:-
• They can meet several buyers on the same day. They can compare like for like.
• Nicola will prep them on how to get the most out of each meeting whether she attends the meetings or not.
• The vendor will get a good understanding of what the buyer is looking for.
• They can look for someone that will “fit” with their clients and their staff.
• They do not have to accept the first offer they get and they know they are getting full market rate for their practice.
• They have access to Nicola’s extensive experience.
• A vendors of a smaller practices are not intimidated by a larger firms
Having a meeting day is good for buyers because:-
• They get the opportunity to meet with the vendor and ask any questions they want about the practice for sale.
• They know at the end of the meeting what the vendor is looking for, how the deal is to be structures, when the closing date is for indicative offers and when the completion date is set.
• All buyers have access to Nicola’s extensive experience.
• The process is professionally handled and is managed in a timely manner.
Draper Hinks only deals with the buying and selling of accountancy practices. It has been doing this for over a decade and is very successful in what it does and how it does it. If you are thinking of selling your accountancy practice then contact Nicola Draper at Draper Hinks at n.draper@draperhinks.co.uk she would be happy to discuss your situation in complete confidence.