Block of fees - putting the feelers out..

deanshepherd

Given the recent thread on purchasing a block of fees, now may be a good time to mention my plans for the next 6 months or so..

A little history..

18 months ago I sold 2/3rds of my practice as a block of fees to an ACCA guy wanting to set up on his own. We run our practices completely separately but still share premises costs, staff costs and IT costs. Being in the same office also stops us going stir crazy, makes it dead easy to cover each other if we go away on holiday and allows us to bounce ideas and get advice from each other. It is a scenario that has worked out very well for the both of us and one I will be looking to repeat.

Since that time I have built up my client numbers to a similar level to what they were pre-sale. Therefore, in around 6 months time, I will be in a position to sell a smaller block of fees of around £25k to £35k for someone wishing to set up in a similar way.

The block will be made up entirely of sole-traders, all creative sector, average fee £480+ per annum (no bookkeeping), all pay in advance via monthly direct debit, only A and B clients (we ditch all Cs and Ds), paperless office system and all software will be set up ready for you to start running.

The practice is based in Worcester Park, Surrey and you will be required to operate from there for at least 12 months after which you can move to wherever you like.

If this scenario is likely to be of interest to anyone here then please let me know.

If anyone has any further questions about this opportunity, or how the previous sale was structured, then I am very happy to discuss both openly here to highlight any pros and cons.

Thanks,

Dean.

Monsoon

What an incredibly good idea! It sounds like a brilliant opportunity for a new MIP, I hope you find someone suitable and it goes well.

Dean

Dean

I would be interested in buying a block of fees. I'm looking to take on some extra work. Although the location may cause a problem. If someone can do what they like after the 12 month period is there any waiver on that for a good ol' chap like myself?!

jilt

deanshepherd wrote: »

If anyone has any further questions about this opportunity, or how the previous sale was structured, then I am very happy to discuss both openly here to highlight any pros and cons.

Dean.

Hi Dean,

It's highly unlikely I will purchase anything from the guy who approached me but can I take you up on your offer to hear how the sale was structured?

When you have the time I'd be very interested to hear.

Many thanks
Jill

deanshepherd

Dean wrote: »

I would be interested in buying a block of fees. I'm looking to take on some extra work. Although the location may cause a problem. If someone can do what they like after the 12 month period is there any waiver on that for a good ol' chap like myself?!

Hi Dean.. it's been a while!

Working here with me to begin with is a pre-requisite in order that both me and you get a good deal. The fundamental measure of whether a purchase/sale of a block of fees is successful is whether the clients stay with the new owner. If you are by my side for 12 months the chances of this happening are vastly increased.

Move to London - you know you want to!

deanshepherd

jilt wrote: »

Hi Dean,

It's highly unlikely I will purchase anything from the guy who approached me but can I take you up on your offer to hear how the sale was structured?

Hi Jill

The last deal I did was slightly different because it was my first one and both me and my purchaser were 'winging it' somewhat but essentially it worked like this..

I sold a block of fees for £42k (1 x GRF).
The purchaser also paid me £1,200 p/mth for 6 months to facilitate the handover and act in a consultancy capacity (i.e. being on hand to answer any client queries that he couldn't).
We rented new office premises together (although operating under different trading names) and split all premises, staff and IT costs 50:50.

I was paid £6k per month for the first 6 months for the fees and the final £6k was deferred for one year pending any clawback for clients leaving. As no clients left I received the final £6k in full.

deanshepherd

This time around I want to structure it slightly closer to a franchise agreement as my branding and systems are all set up with very little effort required from a buyer to just turn up with the cash and have a business good to go from day one.

The price is therefore likely to be nearer 1 x GRF plus 10% of fees per annum as a licence to continue operating as Tax By Design and using my systems and infrastructure.

The thing I don't like about other accountancy franchises is that they make a lot of money for the franchisor but keep the franchisees locked in. Many only allow you to sell your business in future to other franchisees at a fixed rate, much less than the market value, and make it very difficult for you to walk away.

My offering will allow anyone to walk away after the initial 12 month period. It is not in my interests for the deal not to be attractive to both parties.

Absolutely nothing is set in stone and a buyer with years of practice experience is likely to need much less input from me than perhaps a new MIP with a couple of years post-qualification experience.

jilt

Hi Dean,

Many thanks, I think that would be a great opprotuniy for a new MIP, shame I'm not in your area.

mc25

Dean, what a great idea!! I hope you find somebody who is interested soon, you are always of great help on this forum Good luck.