Demand To Buy Accounting Practices At All-Time High
See the latest market data on selling prices, buyer interest, retention terms and time to sell. Whether you’re selling or buying, this will help set you up for success.
As an owner potentially thinking about selling your practice, you’ve likely heard numerous different opinions about where the market is at.
The uncertainty and conflicting information can be overwhelming, especially when it comes to selling prices, levels of buyer interest, how long it takes to sell and key commercial terms such as retention. Without reliable and comprehensive market data, you may end up selling your practice for less than it’s worth, not securing the best buyer, taking on unnecessary risk or potentially not even selling at all.
At DMY, we aim to cut through the noise and provide you with reliable, data-backed insights to empower your decisions. Our latest Market Data release, covering thirty of our recent practice sales, offers a clear picture of the current market. Here’s what you need to know:
1. Healthy Sale Prices
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- Practices are selling for an average of 113 cents in the dollar (metro) and 110 cents (regional).
- All recent sales have exceeded 100 cents in the dollar, reinforcing the notion that "110 cents" is the new “dollar in the dollar” benchmark.
- Sale multiples can vary quite broadly emphasising the importance of an independent assessment to avoid leaving money on the table.
- Larger practices can be assessed on more attractive earnings multiples
2. Strong Buyer Interest
- Metro practices sold by DMY attract an average of 69 interested buyers per listing, a significant increase from pre-COVID levels.
- Regional practices also see healthy interest with an average of thirty-two buyers per listing.
3. Favourable Retention Terms
- The most common retention level is 15%, with a range from 0% to 25%, highlighting the need to focus on the specific risk profile of the fees being sold and the role of the seller in transition.
4. Quick Selling Times
- 80% of practices typically sell within 90 days, other than over Christmas/New Year.
- Metro practices going to market now should have buyers secured by the end of 2024.
For sellers, if you have a quality practice in an attractive location, you can be confident of a strong commercial outcome and a good new home for your clients and team in less time than you may think. However, it’s crucial not to become complacent or assume the sale will be easy without professional guidance. Unrealistic expectations and difficult negotiations can drive buyers away.
For buyers, a deep understanding of the market, patience and empathy are key. A strong cultural fit and flexibility to meet the seller’s needs will enhance your chances of securing that prized acquisition.
At DMY, our goal is to help you sell your practice to the right buyer at the right price, while preserving your legacy and peace of mind. We’re with you every step of the way to ensure a strong commercial outcome and a great new home for your clients and team. Visit us to find out more and to get in touch.
