How to Effectively Sell Your Business (and Yourself) in an Interview
Recent research shows that buyers of accountancy practices outnumber sellers in Australia by a factor of 15 to 1, so it looks very much like it is a sellers market for accountancy businesses. However, as baby boomers begin to retire and exit the profession in increasing numbers you can you can expect this balance to begin to shift.
Take the CPA study which shows that in 2012, 40% of practice principals are likely to be 62 or over and most of these will soon be looking for a way out by selling their practice.
All this points to the fact that there will soon be surge of ‘for sale’ signs in the accountancy market, meaning it may start to shift to a buyer’s market. This makes it more important than ever that practices have an effective sales strategy and a key part of this is marketing your business (and, yourself) effectively in an interview with prospective buyer. Below, you will find some guidelines and advice on how to do this.
1. Be Prepared To Negotiate – But Also Be Ready To Walk Away
At some point in the interview, you may be asked if you are prepared to negotiate on your valuation price. This is not a bad thing as this means that the buyer may be interested in making an offer, although this may be at a lower price. Negotiation is generally an important part of the buying process and ideally you should show the willingness and flexibility to reconsider your asking price. Therefore, you should ensure that you know your minimum sales price prior to attending the interview, as this will put you in a stronger position as you will be able to negotiate on the spot if required and you will also know at what point to cease negotiations and walk away.
2. Know your numbers and make them ‘Investor Ready’
Your buyers are preparing to make a huge investment in your business and they will expect to be able to ‘see under the bonnet’ during interview. Sure, they may had read the financials in advance of interview, but they will want to dig deeper, ask questions, and see what is behind the numbers, but most importantly, they will want to see how well you know your own business.Ensure your financials are current, accurate and include fee summaries, profit & loss, tax returns, a list of debtors, creditors, and furniture.
3. Be Open and Prepared to Address the Buyers Concerns
Do not be surprised or affronted if your interview takes the form of a grilling. Try and understand the buyer’s point of view; a good buyer will leave no stone unturned as they need to know exactly what they are potentially buying into. The buyer will want to question you about the negatives, which could be the level of debtors, low charge out rates, dependence on a few clients, or even the demographic of the client base. You should be prepared to answer these questions at interview and should be able to propose possible solutions to each of their concerns.
4. Be Prepared to Help the Buyer With Transitional Assistance
Buyers are not simply looking to be handed the keys on the first day and then left to start running the business. Most of them will expect some level of transitional assistance with the clients and staff to ensure ongoing continuity of the business. So, during interview, be ready to explain what handover assistance you will offer. If not asked, you should be proactive and mention that you are willing, able and available to provide handover support as needed.
5. The Buyer is Investing in You So Sell Yourself
Whether a merger or acquisition, as the principal, the buyer will be investing in you. They will want to gain insight into your personal effectiveness as a leader and manager as this will be reflected in your business as it stands. If they do not have confidence in your ability to build and run a successful accountancy practice they are unlikely to want to merge with your business. Lack of confidence in your abilities could cause potential buyers to withdraw their interest or to reduce their valuation of your business. Therefore, at interview, you should be sure to spend time proactively explaining your own achievements both within the business and within the industry at large.