When is the best time to sell a Practice?

If you are thinking of selling your practice then Autumn is a very good time to do it. Lucinda Kitchin explains all

Listening to Time of the Season by The Zombies put me in mind of the different seasons in this marketplace. Although for many the workload in professional practice is consistent throughout the year, for others the profession is a seasonal one with the peaks and troughs marking the passage of time, indeed the passage of our lives. For those of us with children we are possibly even more aware of the relentless ticking of the clock as we watch those children grow, travelling through this journey of life.

In accountancy the ‘seasons’ are, of course, marked by familiar milestones throughout the year such as Self-Assessment, for many a time of chaos and stress with the ‘Ghost of Tax Return Season from January’s Past’ casting its dreaded shadow over Christmas and new year.

Year end deadlines

Then we have the financial year end in April and the deadlines it brings with it; the changes to be implemented, updates to be made, professional development to be completed. There are quarterly budgets that herald changes coming in, changes which impact on the lives of the man on the street, the client: the sole-traders, the collaborators, the SMEs, the investors, the forward-thinkers, the professionals, the care-givers, the care-takers. Then we have the usual deadlines falling at regular intervals – submission of VAT, PAYE and corporation tax to remind us that the clock keeps on ticking. Tick tock. Tick tock.

These markers represent distinct seasons within the associated mergers and acquisition market, too. For the brokers and agents who facilitate the purchase and sale of goodwill, January is often the quietest season as many keep their heads down and plough through stacks of files, chasing clients, inputting calculations and quietly contemplating the next stages of their professional lives – whether that may be an exit, growth of the practice, or simply the implementation of a more effective staffing structure.

For the overworked it is usually the Self-Assessment season that feeds the desire to find a solution it is hoped will bring the relief that they seek. If that solution could be an exit, the leap is most likely to be taken shortly after the SA season has ended. Perhaps on return from a precious post-January break. That is when the broker’s phone is most likely to ring, signalling the start of the first annual selling season. That is also when the ambitious practitioner may strike, setting the wheels in motion looking at ways to grow – perhaps by acquisition. Thus February through to the summer holidays is the busy season as merging partners are sought, acquisition opportunities pursued and prospective vendors are tempted out from remote corners by offerings of attractive multiples, short payment schedules and flexible terms.

Then, almost as suddenly as the selling season began, the seasons change once more and for the broker it all starts to quieten down again as we enter the summer lull.

So what is it that makes the autumn the busiest M&A season of them all? Could it be the sweet nostalgic taste of those heady weeks on the beach in the sun still on the lips but fast becoming a dim and distant memory? Or could it be the anticipation of another January that weighs heavily on the practitioner’s mind? Please take note, my ambitious friends – this second annual selling season could represent rich pickings for the acquisitive accountant if they are prepared to act now!

Emergency exit

Then, as Christmas approaches once more the buying/selling season abates, as those who don’t have the luxury of sufficiently motivated staff and smooth-running systems get their heads down, instead changing their focus to the latest revisions, implementations, complications and not to mention tax – will it ever be made digital after all – or perhaps it can be avoided somehow, maybe via a swift (emergency) exit?

If you want to make a change, whatever that change may be, autumn could be the next best time to make it happen, for now is the Time of the Season. Tick tock. Tick tock.

  • Lucinda Kitchin, Jeremy Kitchin Practice M&A (APMA). Email lucinda@apma.co.uk or call 01623 88 33 00

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