Business Overview

• The owner is a CPA
• This practice was established in 2001
• Software in use includes Lacerte
• Approximately 62 bookkeeping clients generating $80,500 in revenue
• Approximately 639 individual tax returns with an average fee of $645 per return
• Approximately 95 business tax returns with an average fee of $3,010 per return
• Approximately 34 other tax returns with an average fee of $1,512 per return
• Approximately 83 payroll clients generating $133,600 in revenue
• $45,200 in revenue via consulting and other services
• Annual cash flow including owner’s salary and benefits, personal vehicles, and any other non-operational expenses of the business: $650,500 (2021)
• Lease expires on June 30, 2022


  • Asking Price: $1,200,000
  • Cash Flow: $650,500
  • Gross Revenue: $1,000,000
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A

Why is the Current Owner Selling The Business?

There are all kinds of reasons individuals decide to sell operating businesses. However, the true factor vs the one they tell you may be 2 absolutely different things. As an example, they might state "I have way too many various commitments" or "I am retiring". For numerous sellers, these reasons are valid. However, for some, these may just be reasons to try to hide the reality of changing demographics, increased competitors, recent decrease in revenues, or a range of various other reasons. This is why it is very important that you not count entirely on a seller's word, however instead, make use of the vendor's answer in conjunction with your overall due diligence. This will paint a more realistic picture of the business's current circumstance.

Existing Debts and Future Obligations

If the current company is in debt, which many companies are, then you will certainly need to consider this when valuating/preparing your deal. Many operating businesses take out loans so as to cover points like stock, payroll, accounts payable, and so on. Keep in mind that occasionally this can suggest that earnings margins are too small. Many businesses fall under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may additionally be future commitments to consider. There might be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with vendors that have to be satisfied or might cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the location bring in new consumers? Often times, businesses have repeat consumers, which create the core of their day-to-day profits. Particular variables such as brand-new competitors growing up around the location, road building, as well as personnel turn over can influence repeat consumers and negatively affect future incomes. One crucial point to consider is the location of the business. Is it in a highly trafficked shopping center, or is it hidden from the main road? Obviously, the more people that see the business regularly, the greater the chance to build a returning client base. A final idea is the general location demographics. Is the business located in a densely populated city, or is it located on the outside border of town? Just how might the neighborhood typical household earnings influence future revenue potential?