Most accountants probably don’t give much thought to what their return on capital is . In fact, they aren’t even giving consideration to what their capital actually is . When we are asked to value a practice a lot of our clients get a shock when they realsie how much their main asset (after their house) is actually worth, based on the gross recurring fees and other factors. Once this is established it rapidly becomes clear how ineffiicient some of these firms actually are , which makes them ripe for takeover by a predator. but doesn’t push down the value . This is obviously great for practitioners looking to sell up , but for those who cannot afford to quit it should ring alarm bells for them and prod them into action.
The question is not what your target return should be , it is what it could be.
FD’s Maximiti division has a range of free online tools to help you focus on the value of your practice
http://www.formationsdirect.com/accountancypracticegrowth.aspx NOTE TO MARC – THIS LINK LEADS TO A ‘PAGE CANNOT BE FOUND’
FD started out as a UK limited company registration agent in 1994 and remains a market leader. FD is now split into specialist divisions for company restoration, practice growth advice and practice sales, electronic company registers and client ID checking
Tel : 0161 798 9999