Welcome to this week's Market Update where we are delighted to reveal our latest six-monthly release of Market Data.
As promised, this release contains more data and insight than ever before and re-inforces our commitment to be the leaders in selling accounting and bookkeeping practices across Australia.
Our new enlarged data set includes thirty recent practice sales, highlights the trends from our last five Market Data releases going back to 2021, and includes, for the first time, detailed data on how long practice sales are taking.
There are no shortage of competing opinions when it comes to the price a practice can fetch, how easy it is to sell, and what is "standard" when it comes to key commercial terms such as retention. Through the deep use of data and insight, DMY aim to help sellers and buyers cut through the noise and build their knowledge to create a more efficient and transparent market for all parties.
Below is a summary of the key findings.
- Practices are selling for an average of 114 cents in the dollar (metro) and 107 cents (regional).
- All except one of our thirty recent practice sales sold for more than 100 cents in the dollar including all five regional practices. This reinforces our regularly expressed view that "110 cents" is the new "dollar in the dollar".
Time to Sell
- 80% of Practices are selling in less than 90 days (from listing date to signed Heads of Agreement with the preferred buyer).
- Practices attract an average of 72 interested buyers per listing.
- Unsurprisingly, there is more buyer interest for metro practices than regional counterparts. Nevertheless, DMY's regional marketing campaigns are still attracting a very healthy average of thirty buyers per listing.
- 16% of the sale price, on average, is held in retention.
- The thirty practice sales have retentions ranging from 0% up to 40%, with 15% remaining the most common amount.
In summary, for sellers… selling prices are trending up and levels of buyer interest remain healthy. If you have a good quality practice you should feel confident of achieving a successful sale within 90 days, with a strong commercial outcome and a good new home for your clients and team.
For buyers…a good understanding of the current market, patience, empathy and flexibility remain critical. Buyers need to have a strong cultural fit with the seller to get a seat at the table but will also need to be commercially sharp and attuned to the seller’s needs if they want to secure that prized acquisition.
The full article can be accessed here:
DMY Latest Market Data - October 2023.
It is a valuable five minute read for anyone serious about building their knowledge of the current market for buying and selling practices.If you would like to see more Market Data, stay tuned for our article in our next Market Update on the Profile of a Practice Sale where we take a closer look at the who, what and why of these thirty recent practice sales.
Meanwhile as a reminder we listed a great new practice in Regional South Australia two weeks ago:
2 Principal Accounting Practice, South Australia Regional $1,100,000 in fees (ID$285)
If it looks like a good fit, register your interest via the website listing.
Daniel and I are continuing our regular trips around Australia engaging with practice owners. Daniel caught up with over forty practice owners last week at CPA Australia’s Public Practice Forum South Australia and next week we are both in Brisbane and the Gold Coast catching up with clients, buyers and prospective sellers. We still have time available so if you would like to meet up to discuss options for selling or merging your practice, reach out to us below.
A highlight next week will be a celebratory dinner with two of our clients following the successful merger of their practice with a leading East Coast practice. Another client of DMY is settling the sale of their two Partner practice tomorrow...and tied the knot with their partner last Saturday! A marriage and “separation” all in one week - and a double reason to celebrate with a whole new life unfolding in front of them.
It’s a timely reminder that we are not just selling practices. When one of our practice owner clients achieves a successful sale or merger, we are literally helping change their lives for the better. That’s pretty cool.
See you out there!
Mark and Daniel