SAIPA Practice For Sale,Accounting Practice For Sale,Accounting Business For Sale
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Established SAIPA Practice With Business Clients For Sale
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Business For Sale

BUSINESS FOR SALE OVERVIEW

This well established SAIPA practice for 22 years is still experiencing strong growth despite the current health of the owner.  With excellent staffAccounting Practice For Sale managed by the owner you are buying into a lucrative practice with structures not built around the owner.  With 50% of the business revenue on fixed retainers you can see the attraction.


Fitment Centre For SaleSELLING DETAILS

Selling Price

3,300,000

Turnover pm

246,490

Stock

0

Profit pm

87,553

Total Asking Price

3,300,000

Net Assets Incl.

100,000




MANDATE REPORT

1. History Background

Fully describe the business's activities

This SAIPA Accounting Practice provides various services to its clients.  The clients are mostly businesses of which 90% are concentrated in the immediate area and the rest mostly not far away either.  Only 20 clients are visited on site and the rest comes to the offices of the business.  A full time rep is used to service clients, ensuring personal touch as part of the service offering.

How long has the business been established?

22 Years.

How long has the owner had the business?

22 Years

What steps are in place to solve "load shedding" problems

N/A

2. Present Market

How does the business operate on a daily basis

The owner has structured the business into various departments with responsible senior people managing them.  He oversees the business and manages the finances.  His son is temporarily assisting as General Manager.

How are the clients attracted to the business

With 22 years of track record and a strong client base and the size of the practice for the area they have word-of-mouth bringing in solid client.  Add to this a prominent website with a great name (you also get that with the sale) and some 800 clients subscribed to their email newsletter you also get new clients from that activity.  They also have a lot of walk-in clients of the street just because of the prominent office location.

What Advertising/Marketing is carried out

eMail Newsletter and Website.  The rest is word of mouth.  The practice also has a full time rep visiting the client.  The Client Relationship Manager ensures client retention with the bigger clients and extra work to be passed onto the practice.

Does the business have any contract work

This is the nice part of this practice where 50% of the revenue are on retainer and gets paid monthly via debit orders in most instances.  That ensures constant cash-flow and a stable income during the year.  Most of the clients are also long standing clients although the business had experience great growth in the last year or so.

What competition exists

Some smaller practices operating from home in the immediate area and on larger accounting firm also in area.  They are however the only sizeable practice in a prominent office in about a 30km radius.

What are the seasonal trends

The practice follows the normal cycles of all accounting practices, but because of the retainer system implemented spreading income and work over 12 months for 50% of the revenue for some clients they don't have the huge swings some other practices experience. The fact that 90% of their income is also from businesses they have a constant stream of requirements and work, unlike the seasonal work one experience for individual tax clients

3. Financial

Is the business VAT registered?

Yes

What VAT documentation is on file?

Yes

Are there up to date Management Accounts available?

Yes

Balance Sheet and Income Statements?

Feb 2014

What Percentage of the business is cash/credit?

The business is running 50% of the revenue on retainer by collecting monthly.  Some clients have even paid in advance.

The current Debtor Book will be given to the BUYER for collection; this gives you a significant cash-flow advantage.  In addition to this book of R950,000 you will get clients that has paid R300,000 in advance for work to be done still so the net effect is R650,000. You also get the creditors to settle and that is R40,000 in total.  Therefore the net effect is R600,000 to the advantage of the Buyer.

Age Analysis?

45 Days

How can it be more profitable

Introducing some auditing capabilities will most definitely improve the income of the practice.

Seller Finance available?

The seller understands how Accounting Practices traditionally sells and will consider an option with a sizeable deposit for buyers that can prove the ability to services any terms given.

4. Staffing

What is the total staff complement?

11 Staff.

Staff Breakdown and length of service

The 11 staff members are loyal and some with the practice for more than 10 years already.  A detailed breakdown will be provided to serious buyers

Do any receive special perks, bonuses or incentives?

No

Are they on contract?

Yes, permanent staff

Do any have management potential?

Although the practice is broken up into teams and departments it will require a general manager (the cost of one is already in the expenses) as the sellers son is relocating to another province after the sale.  He will however be available for a hand over period as required.

How involved  is the Owner in running the business

The owner manages the finances; his team is running the practice while he monitors all activity with key indicators that he has identified.  This is helping with the success and growth of the business despite him falling ill.  This will make it easier for a buyer as the practice is not owner centric.

4. Premises

When does the current lease end?

The current office building is owned by the seller.  He will be willing to either sell it for R1.25m or enter into a long term lease agreement with the buyer of the practice. The lease expected will be R11,000 per month

Is there an option of renewal & what period

Will be agreed upon but a long term option will be available if you don’t buy the building as well

What is the annual escalation %?

Will be at 8%

What are the trading hours?

Mon - Fri

What is the square meterage of the business?

N/A

Is a copy of the lease available?

No, but the seller will be willing to offer a lease.  IMPORTANT to note that the financials provided here INCLUDED the rent that will be expected from you if you don't buy the Building. If you do buy the building the asking price will result in a bond payment related to the rent provided for.

Do you require a licence?

SAIPA registration will be needed

6. Assets

Is a full asset list on file?

Yes

Are any items not included in the sale?

A vehicle currently used by the Rep (Client Relationship Manager) belongs to the owner himself and is not included in the sale.  The one laptop is also personal and there are some personal items in the office.  All will be identified to a buyer during Due Diligence, but nothing is material

What is their overall condition?

Good, laptops are all new.  They buy and give it to staff that has the option after a period to either take the laptops or buy it for a small amount, and they buy new laptops for the business.

Do any require repairing?

No

How have they been valued?

Replacement Value

Which assets are on lease/HP and with whom?

None

What are their settlement amounts?

N/A

Will Seller settle or Buyer to take over?

N/A

Are copies of agreements available?

N/A

Are they presently insured?

Yes

4. S.W.O.T. Analysis

Strengths

Well run, well positioned, retainer income, great staff, NOT owner centric operation will make hand over easier. Also a growing practice that are sold only because the seller has no option to continue.  This practice as have a good quality client base with over 70% of clients having tax clearance certificates on file.

Weaknesses

The current owner’s health will impact on the practice eventually, why he is selling

Opportunities

Expand the services and client base.  Introduce some auditing functions as well

Threats

None perceived if sold

5. Reason For Selling

What is the reason for the sale?

Owner health

6. Conclusion

Why is this a good business to buy?

Great Staff, Growing, Dominating in the Area, Stable Income, Well Established, Great Location, Sold for the right reason. Need I say more?




 

SAIPA Practice for sale,Accounting Business For Sale,Accounting Practice For Sale,Business For Sale

Reference - R140902 
 


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