Draper Hinks was contacted 18 months ago by a potential vendor who wanted to understand how the process worked for selling his practice. He was a sole practitioner with staff and was thinking about retiring at some point in the near future. He was concerned for his staff and his clients and wanted to find a good home for both of them.
It is quite common for us to find a vendor who will put the needs of the staff first, the needs of the clients second and their own needs third. Many vendors have worked with their staff for a long time and seen them through good and bad times. Where loyalty is shown by the staff the vendor feels a responsibility to them to find a buyer that will have their best interests in mind. The same goes for the clients. Some accountants consider their clients to be their friends. We are often told that the vendor has been asked to attend weddings, funerals, graduations etc of clients, so the relationship with the client can be a very strong bond.
Often the price paid for the practice is the third on the list of things for the vendor to consider, after staff and clients. So when we sell a practice we look for the best “fit” between vendor and buyer. This means we look to have a number of buyers for the vendor to meet. In this case the vendor contacted us 18 months ago and we were able to let him know how the process worked. He left it for a year before coming back to us to say he was ready to take the next step.
We found him six potential buyers for him to meet and interview on a one on one basis. We got him four good offers. He had second and third meetings with some of the buyers before making up his mind which offer he would accept. We let the successful buyer know and another meeting was held. Heads of Terms were agreed and the time frame for due diligence and completion was laid down. Then out of the blue the vendor had a stroke and died. Nothing had been signed. The deal was agreed on the basis that the vendor was going to be able to do a handover, which was obviously not going to be the case. The buyer pulled out of the sale, the widow contacted a local firm and sold – at a knock down price.
Draper Hinks was not contacted by the widow. We had a number of buyers keen to buy. We would have held her hand through the process, making sure the deal was done quickly and all parties were happy. This did not need to happen. If you want to talk about this, or any other matter please email me at firstname.lastname@example.org quoting reference Blog 150109