Listing ID: 81130
The Villages accountant is selling a profitable tax practice. The practice services consist of 95% individual returns and 5% business/other returns. The practice is in a good location and high growth area. The expected revenues and cash flows for 2022 are $140,000 and $55,000, respectively. The selling price is $150,000. The owner will assist with the transition.
- Asking Price: $150,000
- Cash Flow: $55,000
- Gross Revenue: $140,000
- EBITDA: N/A
- 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 types of reasons why people choose to sell operating businesses. However, the real reason and the one they say to you may be 2 completely different things. For instance, they might claim "I have a lot of various responsibilities" or "I am retiring". For numerous sellers, these reasons stand. However, for some, these may simply be excuses to try to hide the reality of changing demographics, increased competition, recent reduction in incomes, or an array of other reasons. This is why it is really crucial that you not count completely on a vendor's word, yet instead, make use of the vendor's solution together with your general due diligence. This will repaint an extra practical picture of the business's existing situation.
Existing Debts and Future Obligations
If the existing business is in debt, which lots of businesses are, then you will certainly have reason to consider this when valuating/preparing your offer. Many operating businesses borrow money with the purpose of covering things such as inventory, payroll, accounts payable, and so on. Bear in mind that occasionally this can indicate that profit margins are too tight. 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 likewise be future obligations to think about. There may be an outstanding lease on tools or the building where the business resides. The business might have existing agreements with suppliers that must be fulfilled or may cause charges if canceled early.
Understanding the Customer Base, Competition and Area Demographics
How do businesses in the area attract new clients? Most times, companies have repeat customers, which create the core of their day-to-day revenues. Particular variables such as new competition sprouting up around the location, roadway building and construction, as well as employee turnover can impact repeat customers and also negatively affect future earnings. One vital point to think about is the area of the business. Is it in an extremely trafficked shopping mall, or is it hidden from the highway? Obviously, the more individuals that see the business on a regular basis, the greater the possibility to build a returning consumer base. A last thought is the general location demographics. Is the business placed in a largely inhabited city, or is it situated on the outskirts of town? Just how might the neighborhood average household earnings effect future income potential?