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Could You Grow Your Business By Buying Another One?

If you’re looking to grow your business and take on new clients, one of the ways in which you can do this is by buying another business or taking on their clients. This is how one of my clients is growing. Here’s what he’s doing and how I’m helping him to do it.

Henry and Hamish are both accountants. I spent a few years helping Henry to grow his business, building up a really solid reputation for him. At the end of December 2018 Henry decided that it was really high time that he retired. He didn’t want to take on any more new clients. However, because Henry is a really good accountant, his regular clients wanted to stay with him and he wanted to carry on looking after them – at least for a year or two. It was going to be a gradual meander towards retirement!

After buying me a delicious farewell lunch, Henry promised to keep in touch. True to his word, last year he recommended me to Hamish, another local accountant, who Henry had been working with for a while. When Henry went on holiday he would ask Hamish to look after some of his clients and to answer urgent calls, so that his clients were looked after while he was away.

Old to New

Hamish was quite new to business and needed some marketing help, so we started with a Marketing Direction Day – a planning session to work out who his ideal clients are and the best marketing he could do to find them. Then I started mentoring Hamish on a monthly basis. He really valued this regular support and I’ve been proudly watching his confidence grow, as he gradually takes on more new clients.

Towards the end of 2019, Henry decided that it was time to take a bigger step towards retirement, by passing some of his clients over to Hamish. They both asked me if I could help to make this happen, as smoothly as possible for both of them and for the clients.

Retaining Retained Clients

We all sat down together and looked at Henry’s clients. First we looked at his retained clients – companies that he works with on a regular basis. There are a couple that he wants to keep, and the rest he would like to pass to Hamish. Henry could just pass them all to Hamish, but we decided not to do this. It needs to be a gradual process – 2-3 clients per month – with Henry introducing Hamish to his clients. Henry wants to make sure that his clients will be happy to work with Hamish and not feel as if they are being abandoned. Henry will arrange meetings with each of these clients, taking Hamish along to introduce him. He will fully brief Hamish on each client before they meet. We have also agreed how the monthly fee will be split between Henry and Hamish for the first year and then the second year. The numbers are based on the fact that Henry has done all the marketing to win these clients, so it won’t cost Hamish anything to take them on – in other words, free marketing!

Ad Hoc Clients

Henry also has some clients who contact him now and then, when they need some help with their accounts. He would quote them for the work they needed done and then invoice them at the end of each project. As with the retained clients, between us, we agreed that Henry would write to all his current ‘ad hoc’ clients, to introduce them to Hamish – and put his prices up for 2020. As and when any of them contact him for accountancy support, he will then be able to pass them over to Hamish, who can look after them. As with the retained clients, Hamish will pass a percentage of the fees to Henry for the first two years, to cover the time and expense that Henry has put into finding and keeping those clients.

Keeping in Touch

The key to this handover is contact. How would you feel if you worked with an accountant – or any suppliers – and found out one day that they had ‘sold’ you to someone else? I bet you would feel badly treated and you might even consider finding a more caring accountant to work with. If Henry just passes his clients to Hamish, this is probably what would happen. Instead, he will be managing the process very carefully, in order to safeguard the relationship that he has built up with his clients, over the years.

If you’re thinking about growing your business by taking on another one, make sure that you agree a really strong handover process. Don’t just grab a list of clients and expect to be able to pick them up and run with them. If the person selling their business, or passing over their clients does not want to be involved in the handover, I would seriously question whether or not to take the deal.

While buying and selling businesses is not my key business, I do believe that how it’s handled is a job for marketing and communications. So if you have any questions about whether or not this could work for you, and how best to handle it for everyone concerned, do get in touch by calling me now on 07773 252 744 for a free chat.

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