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How do you buy a practice?

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Jul 30, 2007 4:28 pm

Im relatively new to this field have a couple of million under assets, I want to buy a practice to compliment our CPA firm, and build off that. I am looking at practices in the 25M range, Ive tried FPTransitions, but they dont have a lot for sale. Has anyone had any experience in buying a practice? I hear multiples of about 1.5 X Fee revenue, which I find reasonable, but I want to get more info.

Odds of clients transitioning? Best place to find sellers?

Jul 30, 2007 5:16 pm

www.fptransitions.com

Jul 30, 2007 5:39 pm

Did you read my post? Here is a direct quote from it.

"Ive tried FPTransitions, but they dont have a lot for sale. "

Jul 30, 2007 5:54 pm

Yeah, no not really until after I posted. This forum ought to have a delete button.

Hope I didn't ruin your day.

Jul 30, 2007 7:14 pm

I couldnt bring myself to go outside all day after reading your post. Seriously tho, anyone ever find any leads off there? I am in New York, and their website says they only have 1 active seller in my state, not enough to warrant the 100 fee. If they had 30 active sellers, id be signed up fast

Jul 30, 2007 7:22 pm

Why don't you just go through the phone book and call the practitioners in a thrity molie redius of your shop? tell them you are in the market for a book and that you'd like to see if they're interested. You're looking to pay 150% of trailing 12 but the number can go up for the right situation.

If you're in NY there ought to be severalteen offices around you. 

Jul 30, 2007 7:23 pm

WTF is a “thrity molie redius”? An edit button would be nice too!

Jul 30, 2007 7:47 pm

Whomit- I think you have been hitting the bottle too hard today…

Jul 30, 2007 8:01 pm

I'm happy for you.

Jul 30, 2007 8:36 pm

[quote=Whomitmayconcer]

Why don't you just go through the phone book and call the practitioners in a thrity molie redius of your shop? tell them you are in the market for a book and that you'd like to see if they're interested. You're looking to pay 150% of trailing 12 but the number can go up for the right situation.

If you're in NY there ought to be severalteen offices around you. 

[/quote]

Good idea! Start talking to sellers now and you might find a bargain if we get are really hard downturn in the next couple of years.

It might be a good way to get some staff, too. Repeated contacts - this is a leveraged form of "prospecting".

Jul 30, 2007 9:04 pm

[quote=roostertale][quote=Whomitmayconcer]

Why don't you just go through the phone book and call the practitioners in a thrity molie redius of your shop? tell them you are in the market for a book and that you'd like to see if they're interested. You're looking to pay 150% of trailing 12 but the number can go up for the right situation.

If you're in NY there ought to be severalteen offices around you. 

[/quote]

Good idea! Start talking to sellers now and you might find a bargain if we get are really hard downturn in the next couple of years.

It might be a good way to get some staff, too. Repeated contacts - this is a leveraged form of "prospecting".

[/quote] If you handed me a check for 1.5 times my trailing 12 GSC I would listen.
Jul 30, 2007 9:19 pm

For my prospecting reference ( I have been calling other firms for licensed assistants but not practice sellers) - how much do you manage, and would you generally see someone like yourself wanting to come over as an employee, at least for a transitional period.

What motivates you to consider selling - are you just burned out on the biz? 

Jul 30, 2007 9:33 pm

not really serious, and no I would not go anywhere. I would stay here and do it on my terms or not at all. I enjoy the business and continue to grow it so i would only listen to hear if someone wants to overpay.

Jul 30, 2007 9:35 pm

i knew that post may be taken far too seriously. sorry.

Jul 30, 2007 9:37 pm

So folks, if you are thinking of prospecting to buy a practice, start now, but be prepared to wait until there is a serious down market to help the negotiation. Build cash and relationships now.

Jul 30, 2007 9:43 pm

[quote=roostertale]

So folks, if you are thinking of prospecting to buy a practice, start now, but be prepared to wait until there is a serious down market to help the negotiation. Build cash and relationships now.

[/quote] lots of ca$h relationships not so much.
Jul 30, 2007 9:55 pm

Just because this is the #3 career in the U.S., right behind software engineer and college professor ... look at Allreit, he has #2 and #3 sewed up. Maybe he'd be willing to part with something, for a big pile of cash, of course.

Seriously, skolbro, unless you are getting all of your money up front, the relationship is important. If you could sell for all cash, great, but it could be advantageous to buying and selling to work it out over some time.

My guess is there will be plenty of sellers, and money will be cheaper, during the next recessionl. Now seems like a pretty foolish time to buy.

Jul 30, 2007 9:58 pm

(buyer and seller).

Jul 30, 2007 10:00 pm

I get it, i’ve bought a book.

Jul 30, 2007 10:05 pm

Right on, bro.