The fee list, before anything else
Not the accounts. The fee list, client by client, with the service and the annual fee against each one. A buyer is working out two things from it: how much of this repeats without anybody selling it again, and how much of it walks if one client leaves.
The single most common problem is a fee list that has never been separated into recurring and one-off. Annual compliance work billed every January is worth considerably more than a consultancy project that happened to land last year, and a buyer will split the two whether or not the seller has.
Concentration gets checked immediately. A client at twenty per cent of fees is usually carved out of the valuation or put entirely at risk in the deferred payments, and sellers are routinely surprised by that.
Whether the clients belong to the firm or the owner
This is the one that moves the price most, and it is the hardest thing to fix in the six months before a sale.
A buyer is asking who the client rings. If the answer is always the owner, and nobody else in the building has met them, then what is being sold is a relationship that is about to end rather than a book of clients that will continue. That risk gets priced, usually into how much is deferred rather than into the headline.
Introducing a manager to your top thirty clients two years before you sell is worth more than anything else on this page, and costs nothing.
What the profit looks like once the owner is replaced
Most owners take a modest salary and dividends. A buyer has to put a real market cost of a manager or director into the numbers, because somebody has to do what the owner did.
It is the commonest gap between what a seller thinks the practice earns and what a buyer will pay for. A seller who has already costed their own role, honestly, walks into the conversation with the stronger position.
The things that stall diligence
None of these change the price much. All of them change how long it takes and how confident the buyer feels, and a long anxious process is where deals die:
- Clients with no signed engagement letter.
- Work in progress that has never been measured.
- Informal fee arrangements agreed verbally years ago.
- Anti-money-laundering supervision that cannot be evidenced.
- Professional indemnity history with notified circumstances not disclosed early.
What a buyer pays a premium for
A team that can run the work without the owner. A fee base that has had a proper increase in the last two years. Clean systems, on software the buyer already uses. And an owner who will stay six months and make the introductions personally.
That last one is worth more than sellers expect and costs them the least.