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Established Xero Accounting Practice For Sale
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Business For Sale


BUSINESS FOR SALE OVERVIEW



Xero Accounting Practice For SaleThis is an opportunity to pay the whole package, or buy a minimum 50% Equity stake.  Keep the expert founder as partner. Think of how you can re-engineer a major part of your existing practice.  This is a rare opportunity at best.  Did I mention Johannesburg North or Cape Town?  Did I mention a Warranty on Turnover? Did I mention it is fast growing? 
They have fees of:
Feb 2015 R1.6m
Feb 2016 R3.4m
Feb 2017 R4.7m
Feb 2018 R5.8m projected



BUSINESS SELLING DETAILS

  Selling Price    6,250,000   Turn Over Per Month     409,994
  Stock Included     Profit Per Month 109,584
  Assets Included 100,000   R.O.I % 21%
  Total Price  6,250,000    



BUSINESS MANDATE INFORMATION
Requires more direct owner focus
 History and Overview Of The Business
Fully describe the business's activities  This is a SAIPA (none ATC) and SAIBA practice focused on providing SaaS accounting to clients on the XERO platform.  Clients on monthly retainer ensures steady cash flow.  Add to this that a lot of the accounting work is outsourced to outside accountants / bookkeepers and that both the Cape Town and Johannesburg offices can be relocated and you start forming a value proposition in your mind. Yes you can incorporate this into your practice, have a whole new XERO division with an established brand of its own.  Now add Xero Gold Partner status.
When was the business established?  2011
How long has the owner had the business?  The current owner started the business in 2011
 How Does The Business Operate
How does the business operate on a daily basis  Owner operated in an absent manner.  The current owner has another related value add business under development for the Accounting Market coming online.  Most of his time was spent on that.  Currently an associate operates the daily activities of the practice.  This associate used to own a practice and is therefore the perfect manager.  This associate will also be allowed to buy a portion of the practice from the seller if only a portion of the practice is sold.  You will have an first right of refusal on the remaining balance belonging to the seller.
How are the clients attracted to the business?  This practice growth rather fast, as do most XERO partners.  As a Gold Partner they are sought after and word of mouth ensures a steady stream of new clients in line with XERO's international growth.  With more aggressive marketing this will grow faster.  This will require hands on focus, the current owner has been distracted getting his value add business ready with his international add on product to the Xero product offering.  Therefore the same normal growth should happen even if the current owner is a less than a  hands on partner going forward.
2015 AFS - R 1.58m
2016 AFS - R 3.4m
2017 AFS - R  4.7m
2018 Budget - R5.5m to R6.0m Fees
What Advertising/Marketing is carried out? Normal presence in the marketing space, including XERO, Social Media, Websites etc.
Does the business have any contract work? All the clients are contracted and Xero subscribers.  The bulk of income is monthly retainer based clients
What competition exists? Other accounting practices and XERO service providers.  
Seasonal Trends? Because of the retainer based approach the impact of the tax seasons doesn't influence your cash flow that much
 Financial Information
Vat Registered? Yes
Vat Documentation on File?  Yes
Management Accounts?  Yes
Audited Financials?  Yes, 2 years of AFS available and all the management figures you need.
What as Cash/Credit Split?  Retainer based operation
Debtors Book Age Analisys  30 days
How can you improve the profitability? Increase the client base, Xero is very scalable
 Is Seller Finance available and if so what is it?  Yes, in line with selling accounting practices the seller will accept a 50% cash payment and subject to a proper hand over and turnover warranty the balance after a 12 month period to an APPROVED buyer.  A structured deal will thus be considered.  There is also the option to buy a smaller stake initially.  R3.5m for 50% as minimum (In this case a warranty will still be provided but no terms will be available as the seller will remain as partner and an adjustment in either cash or shares may take place at the end of the warranty period depending on the growth experienced)
   Staffing Of the Business
What is the total number of Staff? 6 staff members, 7 partnered staff
Staff Breakdown Johannesburg - 2 staff members
Cape Town - 4 staff members 
Outsourced / Partnered Staff - 7 (4 Bookkeepers/ 3 CA's)
Partnered structure and payment terms will be discussed with approved 
Staff Special Perks and Bonuses? Partnered staff gets paid for work done and some earn R20,000 and more per month.  Clients is not at risk due Restraints signed
Are the staff on Contract?  Yes, staff and partnered staff both
Does any of the staff have management potential?  Yes in place.  A buy in option from a stake of the seller is on the table for this person if buyer is in agreement
How involved is the Owner in running the business?  Hands on as expert Xero professional but mostly hands off lately as to the accounting aspect.  The new partner or outright owner will have access to the Xero expertise and may apply that if he intends to move some of his existing clients to this platform.
  Premises Of the Business
When Does the Current Lease ends? Both Cape Town and Johannesburg can be consolidate or kept as you desire,  if consolidate that obviously improve the ROI for this purchase.  Cape Town is however very cheap at R5,500pm sharing with a client.  Johannesburg is R12,000 per month sharing with the Sellers other business venture.
Is there an option to renew? As required
What are the Trading Hours? Office Hours
Do You require a license? SAIPA Practice
SAIBA Practice
XERO Gold Partner

 Assets Of The Business
Full Asset List available?  Yes, owner will provide. The established and contracted client base, XERO Gold Partner Status.  The practice also have 7 developed processes and systems included starting with the on boarding of new clients into their environment that is included as IP.
 Anything not included in the sale?  XERO license income is in a separate offshore entity and this needs to be discussed with the seller.
 What is condition of the assets All included office equipment is in working condition
 Are they insured at the moment?  Yes
  SWOT Of The Business
 STRENGHTS Well established Xero Gold Partner
Monthly retainer Client
Fast steady growth experienced
Modern new ear accounting firm
Partnered model allows scalability
 WEAKNESSES Requires more direct owner focus
 OPPORTUNITIES Expand the existing client base
If you an existing practice you can enter the new era of accounting with this division
If you only buy a share you have XERO expertise and relationship for the future
 THREATS None perceived if a new focused partner is introduced to the practice
 Summary
Why is this a good business New innovative Accounting Practice with a solid track record, processes and retainer clients with steady strong growth and a scalable staffing approach forms the right foundation for an exciting future.  
Why is the owner selling it? The seller has another exiting opportunity he pursued in the software space as add on to the XERO environment coming online and needs to be focused more on that.  A new focused partner on the accounting side is needed now or an outright sale will be the right thing for the practice and its clients


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