Buying into a practice

C

censuspro

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Does anyone have general advice for buying into a practice. Do's and Don'ts, potential pitfalls and the current economic climate?
 
What sort of practice?

I think that the Institute of Chartered Accountants has an executive who advises members on such matters. Give him a shout if you are a chartered accountant.



Brendan
 
first of all i would say contact your relevant institute on this. that is what they are there for and this is what you are paying your subs for (aidan clifford would be very good if he slowed down a little!). secondly there are 2 private firms you could contact who would also give good independent advice. one is omnipro - ask for des o neill and the other is john mc carthy. cant find his details but he is ex practice advisory from icai and is very good. google both of these - might be a bit harder to get john mc carthy's.
i actually did this three years ago myself. my best bit of advice would be trust no one in business - especially the people that may be offering you the chance to buy in. if you are been offered a partnership you have to look at it very carefully and dont get blown away with the prosepct of making loads of money. be prepared to walk away if it doesnt look right. the way i did it was i prepared a list of the clients and broke them down into relevant sub headings e.g. client over 60, fee income, type of business (if there were a lot of building related clients you would be worried) etc and then use a pultiple for each client. i then paid for these clients over three years but in the current climate i would be wary of this. send me a pm if you want on this and you could give me a call if i could be any further help. best of luck with it and i would have to say that i am glad i didnt start of as a partner by going out on my own - these people had to start from scratch and i am sure that their clients are suffering more than the established firms.
 
viztopia said:
the other is john mc carthy. cant find his details but he is ex practice advisory from icai and is very good. google both of these - might be a bit harder to get john mc carthy's.
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I have land and mobile numbers for John McCarthy . PM me if needed.
 
Census,

Do you like judo ? If so, I think I know your practice.

- Be wary of strong characters/personalities. Its a two-way street; they expect to gain as well by admitting you to partnership.

- If there are a number of companies involved i.e. one for the accounts, one for the tax and (say) a partnership for the audit activity - what are you buying into exactly ? All of them ? Hopefully not just one.

- How are the fees divvied up ? Are they 'streamed' through the other companies first - a management charge of sorts ? How can you ensure a fair apportionment ? Is this apportionement before or after salaries for the other partners?

- Are you only buying into one company ? Say it were the tax company, is there room for growth there ? Or could you be merely refunding the company your salary ?

- If you wanted to exit, how would that happen ? Painlessly ? Can you see the other partners doing this painlessly?

I was close to such a deal and had to walk away. Being a partner is what most young accountants aspire to - just make sure you don't get carried away.
 
Have you looked into the firm taxassist accountants. I think it is a great concept for a start up firm.
 
I'm aware of Tax Assist. €40K entry fee plus a pc of turnover. Successful business model in the UK but they've only just launched in Ireland.
 
censuspro said:
I'm aware of Tax Assist. €40K entry fee plus a pc of turnover. Successful business model in the UK but they've only just launched in Ireland.
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And looking to have 40 or so franchises in the first 10 years. I would guess the 40k start up cost is negotiable in the current market and with it being a start up venture.

Or you could just do a copy cat of their business model.
 
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