When your client is considering selling their business, it’s a good opening for a conscientious accountant to forge stronger professional links that will help prepare the client for the negotiation process and offer opportunities to ethically extend your fee-earning role.
By acting in the capacity of a ‘critical friend’ you will be able to show your client how to get their business ready for sale, how to optimise its value, how to approach negotiations and also offer advice on the tax implications of various deal structures.
As many small-business owners will often only instruct accountants to perform specific functions – to prepare and submit tax returns, for instance – it’s important to be open and transparent about the fees that will be incurred if you agree to oversee any or all of the sale process. A scale of charges for each service you provide may be helpful here.
Preparing for Sale
Anyone who’s ever sold a business before knows that taking the time to get their business paperwork in good shape before marketing the company for sale pays dividends down the line. Recruiting the help of an accountant at this stage is likely to be a good investment on the seller’s behalf. As an accountant, it’s here where you can not only earn a fee but can potentially make the biggest positive contribution to your client’s exit strategy.
Many clients will prefer to pay an accountant to prepare an information pack that contains all of this data in an easy-to-understand format that will do much to reassure potential buyers of the careful stewardship of the company.
Pricing to Sell
Although your client may already have a good idea of the price they’d like to realise for the business, they may wish to ask for a professional evaluation based on a review of the financial figures. Because valuing a small business is usually based on cash flow, taking into account profits, depreciation and assets, an accountant is often well placed to work out what a fair price might look like.
A good accountant will be able to advise their client on what to include in the sale and what might dissuade buyers from making an offer. If you can help your client to review every aspect of their business and remedy problems that come up, you’ll more than earn your fee.
Discussing Tax Implications
Another potential pain point for small-business vendors is tax. Most clients will be happy to pay a fair fee to an accountant if they can be assured of not only calculating the right amount of tax owed but also if they can count on receiving advice on how best to structure a deal so that their tax liability is minimised.
It’s an opportunity to explore tax reduction options – including the availability of government incentives, allowances and expenses – to ensure that the best route is followed.
Sealing the Deal
Although solicitors are hired to steer the legal process through to completion, there’s also a role here for the accountant who may well be involved in drawing up the ‘Heads of Terms’ on which the final agreement is based. An accountant may also be asked to perform due diligence on the buyer to discover if they are well placed to move ahead with the deal.
While accountants need to look for new fee-earning opportunities as their clients’ businesses change, it’s also crucial to ensure that clients continue to receive the best advice based on their circumstances. A business sale is a good way to consolidate your client-accountant relationship and to secure future collaboration.