Want to increase your accounting practice’s value? Whether you’re planning to sell in the near future or simply want to build a more valuable business, there are proven strategies that can significantly enhance your practice’s worth.
The key is understanding what buyers value most and systematically addressing these areas over time. Small improvements can compound into substantial value increases.
Reduce Owner Dependence
One of the biggest factors limiting practice value is over-dependence on the owner. If you’re the primary contact for most clients and handle all major decisions, buyers will view this as a significant risk.
Start delegating client relationships to trusted staff members. Ensure your team can handle routine client queries and transactions without your direct involvement.
Create comprehensive procedure manuals and ensure multiple staff members understand key processes. This demonstrates to buyers that the practice can operate successfully without you.
Strengthen Your Client Base
A diverse, loyal client base is extremely valuable. Analyse your client portfolio to identify any concentration risks – if your top 10 clients represent more than 30% of fees, you may need to diversify.
Focus on client retention through excellent service and regular communication. Practices with retention rates above 95% command premium prices.
Consider the quality of your relationships. Clients who view you as a trusted advisor rather than just a compliance provider are more likely to stay with a new owner.
Modernise Your Operations
Buyers favour practices with modern, efficient systems. If you’re still using desktop software or manual processes, it’s time to upgrade.
Cloud-based practice management systems not only improve efficiency but also demonstrate to buyers that your practice is future-ready. They also enable remote work capabilities that many buyers value.
Streamlined workflows and automated processes improve profitability and make your practice more attractive to buyers who want to see efficient operations.
Expand Your Service Offerings
Practices offering advisory services beyond basic compliance work command higher multiples. Consider adding business advisory, financial planning, or specialised services that your clients need.
Value-added services typically have higher margins and create stronger client relationships. They also differentiate your practice in a competitive market.
However, ensure any new services align with your team’s capabilities and your practice’s positioning. Quality is more important than quantity.
Improve Financial Performance
Strong profitability is essential for achieving premium valuations. Regularly review your fee structures to ensure they reflect the value you provide.
Monitor key performance indicators like profit margins, debtor days, and billable hour utilisation. Addressing weaknesses in these areas can significantly improve your practice’s value.
Consider whether your current office arrangements are cost-effective. Many practices have reduced overhead costs by moving to more flexible arrangements.
Build a Strong Team
Skilled, loyal staff are a valuable asset that buyers actively seek. Invest in training and development to ensure your team can deliver excellent client service.
Document your team’s qualifications and experience. Buyers want to know they’re acquiring capable people who can maintain service quality.
Consider offering incentives that encourage staff retention through any ownership transition. This reduces risk for buyers and increases your practice’s value.
How SMF Can Help
At Sell My Firm, we work with practice owners to identify specific strategies for increasing value. Our value enhancement program provides a roadmap for improving your practice’s attractiveness to buyers.
We can help you benchmark your practice against others in the market and identify the most impactful improvements. Our expertise in buyer preferences means we know which changes will deliver the best return on investment.
Whether you’re planning to sell soon or want to build long-term value, our team can provide practical guidance tailored to your specific situation.
Ready to maximise your practice’s value? Contact SMF for a confidential consultation about strategies that could increase your practice’s worth.