How Do We Determine What Your Practice Is Worth?

One of the first questions I get from sellers is — what is my practice worth? And the honest answer is, it depends on a lot more than just your revenue.

Yes, we start with your gross collections. But from there, we dig into the details — because two practices with the same top-line revenue can have very different values.

Let’s talk about what we actually look at.

First — the type of work. Tax, bookkeeping, advisory, write-up — buyers weigh these differently. And whether your revenue has been growing or shrinking matters too. Adding clients and increasing revenue tells a very different story than a book that’s been declining.

Second — technology and how the firm operates. Practices that are set up to run virtually or remotely are in high demand right now. They command top dollar — and they open the door to buyers from across the country, not just your local market.

Third — location. A firm in a major metro draws more buyer interest than one in a rural market. That’s just the reality, and it factors into value.

Fourth — your client base. We look at age — if the majority of your clients are older, buyers are going to factor in attrition. We also look at the profile — high net worth clients versus primarily W-2 filers are viewed very differently.

And fifth — arguably the most important factor — your fee levels. If your fees are below market, buyers know it’s very difficult to move them upward without losing clients. Quality buyers will take a pass, or discount their offer significantly. Strong fee levels are one of the biggest value drivers we see.

The good news is — every firm has value. But understanding where yours stands across all of these factors is what gives you a realistic picture going in.

If you want a confidential conversation about what your practice might be worth, reach out. No obligation — just an honest discussion.

Call (317) 546-7720 or email: info@acctsales.com or go to our website at:
https://acctsales.com/practice-valuations/