How to Buy Accounting Fees the Easy Way
If you’re looking to buy accounting fees in Victoria here’s some advice you probably don’t want to hear - take a ticket and join the long queue of buyers. The demand for accounting fees in Victoria in 2015 is at peak levels while supply remains relatively low due to the baby boomers hanging on longer than anyone expected. While buying fees can be a quick fix there’s an alternative … it's called marketing.
As I write this blog we have more than 230 registered buyers looking to acquire fees in Victoria. The vast majority are in metropolitan Melbourne and we only have a handful of practices for sale. There are loads of frustrated buyers out there who can’t even get an appointment to meet with a vendor. Buyers keep asking - What can I do to jump the queue and get to meet with a vendor? Some buyers think paying a premium is the answer but think again. Others are prepared to buy any old practice in desperation but when the charge out rate, chemistry and culture are not in sync it never works. In fact, these deals often end up in tears (and a solicitor’s office.)
My advice to hungry buyers is this. Before you invest several hundred thousand dollars in someone else’s accounting practice consider investing in your own firm first. Don’t get me wrong, there are plenty of scenarios where buying fees makes sense. For example, you might need an injection of fees to lock in a young-gun who wants to take equity now or leave the firm. You might have your financial planning division humming along and need a fresh client base to mine. However, the vast majority of buyers are in the market because their practice has stalled. They are spinning on their wheels going nowhere and their ageing client base has caught up with them. Their ageing clients are selling their businesses, retiring or leaving. Natural attrition is also taking its toll but the fact is, these firms stopped marketing years ago. I recently wrote a blog about GST -The Accountants Fractured Fairytale that outlined my theory on why some accounting firms have got away without marketing for so long. Basically, the GST disguised the need for firms to market their services.
Buying a fee base from a retiring practitioner can be flawed for several reasons. You might be buying a fee base with precisely the same issues – an ageing client base. It can be a recipe for trouble because in a few years that fee base will be at the same crossroad you are at right now. Paying top dollar for an ‘old’ client base where the majority of the top clients are aged over 55 will come back to bite you. You might be trying to sell that same client base in 5 to 7 years time when the baby boomers have flooded the market with practices for sale. The economics of supply and demand mean you could be buying at the top of the market in 2015 and selling at the other end in 2020.
Let's face it, in any business, marketing should never be taken off the agenda. Marketing is a process that requires planning and is ongoing. It's not something you switch on and off. Having said that, some marketing tactics can be activated and deactivated like Google and Facebook advertisements. I spoke with a practitioner recently who told me he hasn’t taken on a new client for ten years because he is snowed under. Under interrogation he admitted he had lost of few clients lately and his ageing client base is about to give him a big wake up call.
The acquisition strategy is seen as a quick fix but when supply is sparse you need to make sure you have your organic marketing strategy and tools in place. Marketing methods have changed and yellow pages and local paper ads simply don't cut the mustard anymore. Without an online prescence and a focus on niche markets you are fishing for clients with the wrong bait and tackle.
If you're looking to grow your practice but your marketing engine has stalled, your referrals have slowed or you have an ageing client base ... join me at the Ready Set Boom Seminar on February 29, 2016 where I will put some of the fastest growing accounting firms in this country under the microscope. You'll learn their marketing secrets and see what tools they are using to win more referrals and why they are winning more of their 'ideal' type of client. You'll also see how they are regenerating their client base with younger business owners.
At this morning seminar in Melbourne I will dismantle the components of an accountant's marketing ‘machine’ and strip down the engine of a website that consistently generates more than $100k of new business every year for a suburban Melbourne accounting firm. It doesn’t matter if you’re a sole practitioner or a four partner firm, the content of this seminar could give you a serious competitive edge. Don’t waste your time attending if you are searching for a ‘marketing silver bullet’ or have a track record of failing to implement. This event is strictly for committed, pro-active and ambitious accountants looking to grow their firm and attract quality SME clients. Spend just over 3 hours working on your business on February 23 at the Ready Set Boom. I guarantee you'll be glad you did.
Until next time ...