Listing ID: 81178
•Accounting, Bookkeeping and tax practice with 13 corporate clients generating 35% of annual revenues; T1- 151 returns representing 65% of annual revenues;
•One owner who is not designated
•Practice was established in 1994, is very profitable and the owner is ready to retire.
• Excellent cash flow at 70% of recurring revenues.
•Software in use: QuickBooks, Intuit Profile,
•Home based practice.
- Asking Price: $99,000
- Cash Flow: $57,486
- Gross Revenue: $82,674
- 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 kinds of reasons why individuals decide to sell companies. Nevertheless, the real factor vs the one they tell you may be 2 totally different things. For instance, they may claim "I have too many various commitments" or "I am retiring". For numerous sellers, these reasons are valid. However, for some, these may simply be justifications to try to conceal the reality of transforming demographics, increased competitors, recent decrease in earnings, or an array of other reasons. This is why it is extremely vital that you not rely absolutely on a seller's word, however rather, make use of the vendor's solution in conjunction with your overall due diligence. This will repaint a more realistic image of the business's existing scenario.
Existing Debts and Future Obligations
If the current company is in debt, which numerous companies are, then you will certainly have reason to consider this when valuating/preparing your deal. Numerous operating businesses finance loans with the purpose of covering things like stock, payroll, accounts payable, etc. Keep in mind that in some cases this can mean that revenue margins are too small. Many organisations come under a revolving door of taking loans as a way to pay back various other loans. In addition to debts, there may likewise be future obligations to consider. There might be an outstanding lease on equipment or the structure where the business resides. The business might have existing agreements with suppliers that should be met or may lead to charges if terminated early.
Understanding the Customer Base, Competition and Area Demographics
Just how do businesses in the location bring in new customers? Most times, companies have repeat consumers, which form the core of their day-to-day revenues. Certain variables such as new competitors growing up around the location, road construction, and staff turnover can influence repeat consumers as well as adversely affect future incomes. One essential thing to take into consideration is the location of the business. Is it in a very trafficked shopping mall, or is it concealed from the main road? Certainly, the more people that see the business on a regular basis, the better the opportunity to develop a returning client base. A final idea is the basic area demographics. Is the business placed in a largely inhabited city, or is it situated on the outskirts of town? Exactly how might the neighborhood mean house earnings influence future earnings potential?