Market strength is still strong with a $ for $ achievable in regional rural areas. Are we heading to CBD pricing?
Whilst at a regional rural conference we asked what did everyone think a practice was worth… with a silent response form the room we asked again:
How much would you buy a practice for? “80c in the Dollar!” resonated throughout the room.
How much would you sell your practice for? Nearly everyone in the room shouted out “A Dollar For Dollar!”, with a lot of laughing…
Although funny, the question in our minds was, why would they, in essence, still be ‘nervous’ about selling for $ for $.
We can assume, historically, prices in regional / rural areas have an unfortunate bias with 80cents being the going rate and the “$ for $” shouted out was a bit tongue-in-check – it shouldn’t be.
We find many regional and rural practices that outperform inner city firms. So why the discount? It’s just a BIAS.
There is a risk weight though; staffing and the resounding relationship with clients by the practitioner.
As an owner of a Regional or Rural Practice, if you want ‘top dollar’, be ready for a in-depth handover.
Ensure the Purchaser is ‘Able, Affable and Available’. Clinically chosen (vetted) to match your area, expertise and client type .
‘Out-of-Area’ and ‘City Folk’ are coming online or returning to their roots. Although…. as much as they are good buyers, they too need to have the personality fit or be able to demonstrate they can commit , long-term, very long-term.
Patience is needed in finding them and making sure they [Purchaser and Vendor] are culturally compatible.
If all of the stars align, people, culture, numbers and dollars, we can’t see why premiums won’t creep into regional and rural areas.
Don’t forget: Accountants are still pillars in society – especially in regional and rural areas.
Side note: If you have an internal succession option in play, a nurturing ground with loyal staff but timing is out or due to circumstances changed it is still appropriate to ask $ for $.
We are seeking conversations with practitioners thinking of moving to regional and rural areas or already in there and thinking of joining or buying a practice.
Magnus Yoshikawa – 0408885944 – www.jadejapartners.com
I’ll be at the Accounting Expo. If you’d like to say hello, please do [SMSs are fine].