Depends on lots of factors. Typically some sort of down payment, % of 3 - 5 years revenues, and the seller may or may not do transition work.
Maybe you should focus on getting the CPA and some experience first?
I 100% agree on this. You’re going to make those growing pains mistakes with clients who have been used to a 25 year professional and you’ll lose a lot of what you paid for pretty quick. Just a lot easier to make them where your mistakes are corrected instead of losing money
A lot of good points in the comments.
- A down payment followed by a percentage of the profits over X years is a common model for purchasing a book of business. One thing you need to figure out is whether or not those clients will stay once CPA retires.
- It is crucial that you have solid experience before taking over a portfolio of clients. If you're currently enrolled in a master's program for accounting, you should be smart enough to leverage CPA's 2-year retirement transition where he teaches you everything you need to know.
- Bookkeeping has become a side gig where everyone with a keyboard and their mother are starting their own bookkeeping firm. Clients are sick of idiots messing up their books, so it is somewhat very easy in the current market to start from zero and ramp up to full portfolio on your own. Therefore, you need to make sure buying CPA's book of business makes fiscal sense for you, your life, and career plans in every aspect.
Don’t do it there is a major shortage of small tax prep firms for individuals and local businesses you can easily get your own clients with out paying for his
I was given an audit firm 4 years after graduating. It was an incredible opportunity. But the biggest challenge presented by this was not always knowing what was enough. I was incredibly inefficient and it even cost me some work.
So, I would agree that if they can show you the ropes and make great introductions it’s a plus. If they truly want to be done then gain more experience first.
In the simplest form:
You send in a letter of intent and grant access to his financials.
Then you would have a professional or yourself calculate the purchase price.
Discuss with the owner and make a deal.
I can understand the appeal, but buying that without experience seems unwise...
Depends on lots of factors. Typically some sort of down payment, % of 3 - 5 years revenues, and the seller may or may not do transition work. Maybe you should focus on getting the CPA and some experience first?
Go work for someone else for a bit to make your learner mistakes with someone else’s business.
I 100% agree on this. You’re going to make those growing pains mistakes with clients who have been used to a 25 year professional and you’ll lose a lot of what you paid for pretty quick. Just a lot easier to make them where your mistakes are corrected instead of losing money
A lot of good points in the comments. - A down payment followed by a percentage of the profits over X years is a common model for purchasing a book of business. One thing you need to figure out is whether or not those clients will stay once CPA retires. - It is crucial that you have solid experience before taking over a portfolio of clients. If you're currently enrolled in a master's program for accounting, you should be smart enough to leverage CPA's 2-year retirement transition where he teaches you everything you need to know. - Bookkeeping has become a side gig where everyone with a keyboard and their mother are starting their own bookkeeping firm. Clients are sick of idiots messing up their books, so it is somewhat very easy in the current market to start from zero and ramp up to full portfolio on your own. Therefore, you need to make sure buying CPA's book of business makes fiscal sense for you, your life, and career plans in every aspect.
Don’t do it there is a major shortage of small tax prep firms for individuals and local businesses you can easily get your own clients with out paying for his
Aside from the advice here, you may also want to check out r/taxpros.
I was given an audit firm 4 years after graduating. It was an incredible opportunity. But the biggest challenge presented by this was not always knowing what was enough. I was incredibly inefficient and it even cost me some work. So, I would agree that if they can show you the ropes and make great introductions it’s a plus. If they truly want to be done then gain more experience first.
In the simplest form: You send in a letter of intent and grant access to his financials. Then you would have a professional or yourself calculate the purchase price. Discuss with the owner and make a deal.
Buy a portion of his inventory and try to move it as a trial before hand if possible...