“Kev found me a way out of accounting firm ownership”
Article by: Chris Sheedy OF The Hard Word
Having run his regional Victorian firm for several decades, Kevin Paynter was facing burnout, health problems and an uncertain future. KevRyan helped him find a buyer, a future for his clients and staff, and a more gentle transition to retirement.
For three decades, Kevin Paynter had served the community of Myrtleford, Victoria, with his firm Paynter & Associates. Like many accountants who have run firms for a long time, his practice was much more than a business. It was a life’s work, a complex series of relationships developed over decades, with late nights spent balancing client needs and weekends often sacrificed to keep things running.
Unsurprisingly, the toll eventually showed.
“I was looking for someone else to take over, partly because of a few health things like low energy, chronic fatigue, that sort of thing,” Kevin says.
“It was also about the changing business landscape, with more and more regulation. I particularly think of the recent Tax Agent Service Act changes. It was like everyone had to have a manual that was inches thick. I just thought, we need a bigger back office to manage all of this red tape.”
He began considering his options. Internal succession wasn’t viable as none of his staff wanted the stress of ownership, and local firms he spoke with weren’t interested.
“In the past, in years gone by, there would have been takers,” he says. “But these days, people see how much work and stress is involved and it’s just not as attractive.”
Business transaction success is all about the advisor
Wary of navigating a sale alone, Kevin began a search for a guide for his journey.
“I asked a chap at Pitcher Partners if he knew of anyone who could help me,” he says. “He said one of their guys had used Kev Ryan and recommended him highly. I thought, well, if Pitcher Partners are recommending Kev, he must be very good. He must have the right moral compass.”
From the start, Kev brought powerful and valuable clarity to an extremely complex process.
“Kev figured out exactly what was required.” Kevin says. “Did I need a new partner, or someone to take over? He consulted with me and helped work it out, then went to the market to talk to those who were interested.”
That process helped to narrow the field to one serious buyer, a Victorian firm with regional offices throughout Victoria and NSW.
Sales are never straightforward though, Kevin says. Negotiations typically take place over many months. This one was no different.
“At various stages you feel as if the deal is going to fall over, but Kev keeps everybody’s heads together and is very active in getting all parties to agree to essential terms,” he says.
“He took the stress out of it. That was really important, because the way I was sometimes feeling and the level of burnout I was experiencing, I’m not sure if I would have coped.”
Accounting firm ownership is difficult
It’s not at all unusual for a founder/owner of an accounting firm to feel the way Kevin did, says Kev Ryan, of accounting firm transaction advisory KevRyan.
“Many business owners reach that stage,” Kev says. “The challenge is for them to find a great solution that creates a win for everybody involved. It’s quite complex, but absolutely possible.”
Having managed numerous accounting business transactions over several decades, Kev has identified many commonalities amongst those looking to sell. Importantly, he is also intimately familiar with the needs of acquiring firms.
The vital ingredient for success, he says, is a positive outcome across the board.
“In Kevin’s case, this involved a sale to another firm, an ongoing role for himself so he could look after his valued clients, ongoing employment for his six staff and a valuable acquisition for the buyers,” Kev says. “I’ve said it before and I’ll say it again – a good and sustainable business transaction is always about people.”
Accounting business sale: The outcome
When the deal closed, Kevin found he was busy learning the new systems of the acquiring firm. For this reason, he still worked a few nights and weekends at first. However, he also felt the crushing weight of firm ownership begin to lift.
“Certainly there’s less responsibility and accountability, now,” he says. “And I’m told that in another year’s time, life will be even better.”
Amazingly, out of around 3000 clients, only one left during the change of ownership. And that was not because of the sale, but instead due to family needs.
“I’ve known my clients for 30 or 40 years, I see some of them more than I see my own children,” he says. “I wanted them to stay here with the team we’ve got. And morally, to just walk away from my clients, I wouldn’t have coped with the guilt.”
3 tips for accountants thinking about succession/retirement
1) Don’t wait until burnout forces your hand: Kevin admitted his health and energy levels had dropped before he acted. “Open conversations with a transaction advisor earlier so you can choose your moment, not be driven by circumstances,” Kev says.
2) Explore internal succession, but be realistic: Today, as Kevin discovered, many senior staff don’t want the stress of ownership. Keep an open mind about external buyers.
3) Work with someone who knows the market: The wrong detail can sink a deal. A transaction advisor knows the signs of trouble and the deal-breakers, as well as ways around them. It’s the advisor whose responsibility it is to make sure both sides sign on the dotted line.
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