Clearsky, Parasol, SJD & Nixon Williams (Optionis) For Sale at £300m !!

[churchillsnip]

From my own experience, getting an accountancy practice of the ground is very hard (as the vast majority of clients will come from referrals...not good when you have no existing clients!). However, once you've got a decent base of clients, it has seemed to snowball with negligible marketing effort.

Replace 'accountancy practice' with 'IT consultancy' and the above still holds true Chris.

I wouldn't expect you to share your trade secrets on here, though that process could make interesting reading for those on the forum that are interested in the indie consultancy route.

Indeed, the SJD sale price did baffle me. "Traditional" accountancy firms sell for give or take £1 per £1 of turnover. SJD went for something like £4 per £1 of turnover from what I read (how reliable that was I don't know). Sure there's several reasons for this, higher profitability, dominance in marketplace, perhaps fingers in related pies etc. Like you say, the risk is surely much higher though, which I'd expect would put downward pressure on the value.

Interestingly, SJD are the 10th largest insolvency practice in the country according to this league table (which only looks at certain types of insolvencies). that means that if many contractors do leave the contractor market, there is a short term boom coming their way.

[Maslins]

Replace 'accountancy practice' with 'IT consultancy' and the above still holds true Chris.

I wouldn't expect you to share your trade secrets on here, though that process could make interesting reading for those on the forum that are interested in the indie consultancy route.

There are probably many similarities:
- inevitably making some rookie errors,
- starting with little self confidence, which perhaps shows when talking to potential clients,
- starting with few connections.

Otherwise I think there's some key differences though, especially for the more "contractory" types:
- IT contractors can win a big juicy contract on day one that means year 1 turnover is very healthy.
- Flip side is the main way that's likely to grow is by increasing your day rate. If the market won't accept that, year 2 may be no better than year 1.

Unless a new accountancy practice buys clients, or inherits/sources in bulk from somewhere, the first year will be pathetic. Win a client, yay! but that's maybe £1k/year, less costs, defo not enough to live off. You need a decent number before you can make any money, and with no track record these will initially be very hard to come by.

Interestingly, SJD are the 10th largest insolvency practice in the country according to this league table (which only looks at certain types of insolvencies). that means that if many contractors do leave the contractor market, there is a short term boom coming their way.

Yeah, I think MVL Online are just outside the top 20 (precise position depends what date range you use). Impressive considering the pitiful resources it started from. Disappointing when we consider we were basically first into the new MVL marketplace, had about a year or two before we saw any real competition, yet many of those are now above us!

[northernladuk]

yet many of those are now above us!

Do they give iPads for referrals?

[Jessica@WhiteFieldTax]

Yeah, I think MVL Online are just outside the top 20 (precise position depends what date range you use). Impressive considering the pitiful resources it started from. Disappointing when we consider we were basically first into the new MVL marketplace, had about a year or two before we saw any real competition, yet many of those are now above us!

The faster they rise, the quicker they fall....

[Maslins]

Do they give iPads for referrals?

Liquidators can't pay for referrals, as of course it could lead to unscrupulous accountants persuading all their clients into liquidation to make cash for the accountant.

It seems most liquidators get around this by asking the referrer to do a trivial amount of work then pay them a vastly OTT fee for doing it.

[Darren at Fox-Bartfield]

Liquidators

Liquidators can't pay for referrals, as of course it could lead to unscrupulous accountants persuading all their clients into liquidation to make cash for the accountant.

It seems most liquidators get around this by asking the referrer to do a trivial amount of work then pay them a vastly OTT fee for doing it.

Referring to the infamous statement of affairs fee! Seems to be becoming less frequent these days.

[Andy Hallett]

Clearsky, Parasol, SJD & Nixon Williams (Optionis) For Sale at £300m !!

Fascinating what you hear around the campfire when your role has moved to investments...

[MrButton]

For the same reason that you are seeing more outside IR35 contracts in the Public Sector.

They need contractors, the sort who walk away from inside contracts.

Exactly

[cojak]

Building trust take time and I trust Maslins. Simple really.

[Darren at Fox-Bartfield]

First Freelance

Looks like the announcement has been released about First Freelance

Link