Accounting Franchises / Tax Practices Business for Sale Trends:

There should not be major change in the current demand for accounting firms in the next several years. However, any new tax levels could greatly affect the trajectory of the accounting practice and tax industry. The overall market should remain strong for next few years because there is a larger volume of buyers in big metro areas than there are sellers. This is different in rural areas because industry trends point to there being less buyers than there are sellers. Also, due to low interest rates and the abundant access to financing for buyers is appealing for both buyers and sellers. Buyers usually need to provide high up-front payments. For example: the buyer usually puts in 10% of the purchase price and the bank will provide 70-80% and then the seller provides an advance note for 10-20% of the purchase price 

Source for information: 2020 Business Reference Guide

Profit and Loss Breakdown (Based on Industry Averages in the Accounting / Tax Practice Services):

Business Breakdown:

 Average Profit Margin: 20.4%

Revenue per employee: $35,500

Average Number of Employees: 2.3

Average Wages per Employee: $11,972

Industry Costs

 Profit: 20.4%

Wages: 33.8%

Purchases 6.6%

Depreciation: 1.1%

Marketing: 1.1%

Rent & Other Utilities: 4.2%

Other: 32.8%

Largest Market Share in this Industry:

 Intuit Inc.: 25.1%

H&R Block Inc. 22.8%

H&R Block Franchise Example:

 H&R Block is a tax return preparation business and can offer bookkeeping and payroll services. Their franchise program was started in 2008. There are 9,524 H&R Block locations in the United States, of which 6388 are corporate units and 3136 are franchise units.

 Initial Franchise Fee:

 $2,500

Total Cost of Franchise:

 $31k – $149k

Royalty Fee:

 60%

 In the Franchise Disclosure Document, there was no earnings of franchisees presented in Item 19.