As a seller of a small tax practice do you think it is a fair deal if the buyer pays 50% of the gross collected off my clients this year and the other 50% next year "if" they return. If they don't return to the buyer there is no 2nd 50% paid.
Well that's up to you. When we have purchased small practices, we pay over 5 years based on returning clients.
When I sold my practice in Dallas (30 years ago), I used sjrcpa's method exactly. The market is probably different now, but I've never seen a practice sold without recourse.
Thank you to both of my replies. I wondered if I should have an attorney draw up an agreement or if I could do it myself and have it notarized etc? It is not a lot of money involved.
Thank you in advance!
Just as you would advise someone to use a professional to prepare their taxes, so should you use a professional to draw up legal papers.
I have sold 2 practices over the years... Both with eventual sales price based on 1st year's billings by buyer... but with a minimum.... The latter encourages buyer to try to retain as many of the clients as possible.
Seems that your terms accomplish the same. 50% of total client billings and 50% of retained. If I've invested 50% already in the client, I'm motivated to try to retain..rather than arbitrarily pick and choose at seller's expense.
