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Established Auditing Practice In Eastern Cape For Sale
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Business For Sale


BUSINESS FOR SALE OVERVIEW


Accounting Practice For SaleThe partnership is a IRBA registered audit practice and SAICA registered training office engaging in audit, assurance, taxation, accounting, financial advisory and business consulting, company secretarial services and the provision of Internal audit services to the both public and private sector in the Eastern Cape.


BUSINESS SELLING DETAILS

  Selling Price     14,950,000   Turn Over Per Month     1,144,582 
  Stock Included   Profit Per Month 716,493
  Assets Included  500,000   R.O.I %  58%
  Total Price  14,950,000  NOTE DEBTORS & WIP Excluded



BUSINESS MANDATE INFORMATION
Accounting staff are incentivised on a monthly basis, senior audit staff (post training contract) are rewarded via a bonus on an annual basis. Admin staff receive a 13th cheque. 
 History and Overview Of The Business
Fully describe the business's activities  The partnership is a IRBA registered audit practice and SAICA registered training office engaging in audit, assurance, taxation, accounting, financial advisory and business consulting, company secretarial services and the provision of Internal audit services to the both public and private sector in the Eastern Cape.  
When was the business established?  The partnership was established on 1 June 2005. The practice did however existed before that in another format.
How long has the owner had the business? The current partners (2 partners) where the original partners whom opened the business on 1 June 2005.
 How Does The Business Operate
How does the business operate on a daily basis Both partners are actively involved in the running of the practice on a daily basis. The practice has the correct admin and professional office staff support to function. 
How are the clients attracted to the business? Excellent client service results in word of mouth referrals, submission of tenders, organic growth and networking through various sports and social clubs
What Advertising/Marketing is carried out? Networking through sports clubs and various social media, direct marketing of services and add-on services to existing clients. Print media includes annual taxation booklet for distribution to clients and target clients, and direct marketing of the practice to prospective employees at the Eastern Cape tertiary institutions. 
Does the business have any contract work? Monthly accounting work for various clients, including submission of VAT 201 and EMP201’s. In addition, a yearly contract with to second staff for both to specific audits that will be disclosed during due diligence
What competition exists? Their target market is the medium / mid-size to large business that can afford the services of a firm of qualified Chartered Accountants. The recognised firms of PWC, E&Y and KPMG as well as numerous medium to smaller firms are direct competition in the surrounding area. 
Seasonal Trends? Majority of clients are February year end, meaning provisional tax due 31 August and 28 February each year. The office is busy all year round.  Further seasonal secondments of staff to a client for the above mentioned contract being the period April to November each year.
 Financial Information
Vat Registered?  Yes
Vat Documentation on File?  All documentation required in terms of the VAT Act is available for the last 7 years. 
Management Accounts?  Yes, available to approved buyers. History management accounts will also be made available.
Audited Financials?  Financial statements up to date and available to approved buyers. 
What as Cash/Credit Split?  No cash, except for certain services where payment is requested upfront. Majority of services are on credit. 

Debtors Book Age Analisys  Current 30%, 30 days 17%, 60 days 18%, 90 days 16%, 120 days 19%
How can you improve the profitability?  The best way to improve profitability is to grow the client base. This is best achieved by the acquisition of smaller accounting / audit firms.  A second option would be to focus on Public Sector work which would require an appropriate BBBEE plan. 
 Is Seller Finance available and if so what is it?  Yes for 50% of the goodwill sale price, available for between 6 and 12 months at prime less 2% interest rate. 

IMPORTANT -  Payment for the WIP, debtors book and assets to be made up front. (WIP is about R1m excluded in asking price, Debtors is about R2m excluded in asking price and Assets about R500,000.

A structured finance arrangement is available to an approved buyer. 
   Staffing Of the Business
What is the total number of Staff? 26 to 28 staff
Staff Breakdown Staff compliment inclusive of 5 CA (SA)’s. Staff structures are managers (generally CA(SA), senior auditors (mostly honours qualified) trainee auditors (all minimum of BCom qualified), tax administrator (Hons tax qualified).  Further details of names and years of service to be provided o approved buyers. 
Staff Special Perks and Bonuses?
Are the staff on Contract? Trainee accountants on contract for the duration of the training. All other staff are permanent. 
Does any of the staff have management potential?  Yes, the 2 qualified CA managers should be incorporated into the partnership in the medium term. 
How involved is the Owner in running the business?  5 days a week, minimum of 8 hours per day. 
  Premises Of the Business
When Does the Current Lease ends? The sellers also own the company which owns the building.  A market related rental is paid to the company by the practice.  A lease can therefore be negotiated. Currently, the lease is month on month. 
Is there an option to renew? Yes
What is the annual escalation %  8%
What are the Trading Hours? Mon - Fri : 8am to 5pm with one hour lunch from 1pm to 2pm. 
What is the square meters?  Around 400square meters exclusive of front and rear parking for clients and staff. Office  and rear parking is completely secure with wall and electric fence.
Is a copy of the lease available?  Yes
Do You require a license? Premises has been rezoned for business use. No further business premises licence required. 
SAICA review the premise periodically to ensure that requirements are met. 
Practice will need a CA (SA) to continue as a going concern. 
 Assets Of The Business
Full Asset List available?  Asset list on file, but mostly office equipment and furniture.  Obviously the clients are the largest asset

 Anything not included in the sale?  No, everything is included
 What is condition of the assets  Good, none needs repairing
 Any Assets on Lease/HP that Buyer needs to take over?  No
 Are they insured at the moment?  Yes
  SWOT Of The Business
 STRENGHTS A well run practice with competent staff.
Client base is diverse and long standing. 
Growth opportunities within the local market. 
Up to date procedures for conducting the audits (utilising Probe and Caseware financial) 
Practice management does through practice management software
Long standing firm with an excellent reputation. 
 WEAKNESSES Very dependent on owner involvement on a day to day basis. 
Recruiting and retaining appropriately qualified BBBEE staff. 
 OPPORTUNITIES The practice can grow within the public sector by Recruiting and retaining appropriately qualified BBBEE staff and satisfying the BBBEE requirements of the tenders. 
 THREATS BBBEE regulation for public sector clients. 
 Summary
Why is this a good business Established in 2005
Longstanding client base
Experienced and skilled staff
Highly profitable business since inception.
Why is the owner selling it? The partners have been engaged in the accounting / audit field since 1991 without a break (beyond the annul 2 weeks December close down).  The owners are looking for a new challenge in a non-professional business venture.


Business For Sale, Accounting Practice For Sale, Auditing Firm For Sale, Bookkeeping Business For Sale

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