All good things come to an end. Running a business means making all sorts of decisions. Still, one of the biggest decisions comes when you consider if it is time to sell an accounting practice.
There are several reasons people sell their accounting firms. These include financial profit, changes in interests or life stage, or merely an offer that is too good to pass.
What matters most is what makes the most sense for your life and your business. Looking at the writing on the wall and the signs around, you can give you an idea of if it is a good time to sell your accounting practice.
Look for these six signs that it’s time to sell your accounting practice:
You Feel Burnt Out
Running an accounting practice takes a lot of time and energy. After doing it for a while, you may start to feel burnt out and lack motivation. Burnout manifests differently in different people. You may feel anxious or depressed about making decisions for your CPA firm.
You might be daydreaming about other opportunities or doing something else with your life. You might dread going to work because it is exhausting to be there, and you’re not interested in the work. You may be all out of ideas of how the firm can grow and evolve.
Whatever burnout looks like for you, be in tune with your emotions to realize how you are feeling.
It is normal for burnout to occur throughout your career. If the lack of motivation doesn’t go away with time, it could be a sign you’ve run your course with the business.
Burnout can be especially heavy in business owners because you put so much of your time, energy, and resources into growing the business.
This isn’t just an 8-5 job for you—it’s your passion and calling. But with that calling comes more responsibility and weight, which can be crushing when you’ve reached your limit.
There’s no shame in not feeling passionate about your business anymore. It may feel strange after pouring so much of yourself into it for so long, but your mindset and energy can change over time.
In many cases, it’s better to move on than to keep pushing yourself on an accounting practice that is mentally and physically exhausting.
Put your mental health and emotional needs first if owning the accounting firm is pulling away from your other needs and passions. It could be time to sell before the burnout gets worse.
You Get Another Opportunity
Owning an accounting practice is a great career, but it isn’t for everyone. You may want to try something new or branch out in your career. Life may have presented you with another opportunity that is too good to pass up.
If you’ve been approached about a new career or life move and can’t stop thinking about it, it could be time to sell your accounting practice. You need to follow your passions and energy and think about the future.
If a new opportunity is pulling all of your energy and seems like the best long-term move for you, it may be a sign to sell.
Many opportunities may naturally arise when you own an accounting firm. You may want to own a different type of firm, or you may want to work in-house for a company. Perhaps an organization wants you to serve on its board.
You may also want to follow your passions in a completely different area, like teaching accounting, working in the non-profit space, or starting a new type of company. Whatever it is, pay attention to the opportunity.
Weigh your choices and look towards the future to think which path would make you happier and get you closer to where you want to be in life. You don’t have to take every career opportunity that comes along.
Still, if there is an offer that is too good to turn down or one you can’t stop thinking about, it might be time to sell your CPA firm and move on.
Another opportunity could also come in the form of an offer to buy your firm. Your accounting practice doesn’t have to be on the market to receive a verbal offer.
If someone approaches you and wants to buy your firm and is willing to pay a fair price (or even more), it could be the opportunity you need to move to your next life adventure.
Even if you weren’t planning on selling right now, some offers are too good to turn down, especially if a motivated and trustworthy seller is coming to you, eliminating many of the steps of selling an accounting firm and could potentially lead to a smoother process. Accounting practice sales can be complicated, and an eager buyer can help move things along if you are ready to sell.
You’ve Taken The Business As Far As You Can
After owning an accounting practice for some time, you’ve probably worked hard to grow the clients and revenue. But even with effort and a solid strategy, you might hit a growth plateau at some point.
When this happens, the company still struggles to grow, no matter what you try or how much time and resources you throw at the company.
A growth plateau can happen for several reasons. It could be because of the market or competition. It could also be because the business has outgrown your skills or expertise. You may have been a great leader and owner in the beginning phases and had skills that matched what the practice needed.
But with time, you may find that your skills are better suited for a younger or smaller practice. The firm may need expertise and leadership in different areas where you aren’t as knowledgeable or experienced.
There really may be nothing else you have to offer the practice and break through the plateau to continue to grow.
Knowing you’ve hit a wall with your company can be difficult. There’s a fine line between knowing when to pivot your company and learn as it grows and knowing when it is time to sell and move on.
Suppose you still have a passion for continuing learning and growing with your company and a strong leadership team that can assist in areas where you aren’t as strong. In that case, you may be able to stick with the practice.
In many cases, a plateau is a sign you’ve given it all you’ve got, and the firm has outgrown your skills.
You may not want to admit that continuing to own and grow the firm is beyond your set of skills and interest level. It can be hard to realize that you are becoming less of an asset to the company.
It takes humility to be willing to step down for the good of the company. But selling the accounting firm and moving to something more in your wheelhouse is suitable for both you and the firm.
A new owner can potentially breathe new life into the firm and take it to new levels. You will likely have more satisfaction and engagement at a firm or in a job that is better suited to your skills.
The Market Is Changing
There will always be a need for accountants, but as the economy changes, the demand for the services and what people are willing to pay may change.
If your firm focuses on a niche type of accounting, the demand and value may drastically change over time or with shifts in the market and customer preferences.
For example, if you focus on small business accounting and the economy dips and small businesses suffer, it could affect your firm. The same is true if you focus on international accounting and tariffs grow or many other market situations that could affect your firm.
Keep an eye on the horizon, so you know what is coming down the pipeline. You can potentially sell your firm before things change drastically and recoup more of your costs. If you wait until the market dips, your firm may lose value, but if you pay attention to the market and understand potential changes and trends.
When you look towards the future, you can be ready and start preparing an exit strategy as things begin to change.
Running a business always comes with risks, and as the risks start to grow and mount, it could be a sign that selling is your best option. If the risks and potential changes in the economy seem too much for your business to withstand or are simply more than you want to deal with, consider selling.
You Want To Liquify Your Assets
When you own an accounting firm, much of your net worth naturally is tied up in the firm. Even as you make money and the practice grows, your assets are likely not liquid. For many owners, this isn’t a huge factor because the business is still profitable. But at some point, you may want your assets to be more available and liquid.
If you don’t want a large portion of your net worth tied up in the business, it could a sign that it’s time to sell your accounting practice. There are other financial aspects to consider for a sale, including ownership shares for any partners and taxes from the sale of your firm.
Make sure you have the complete financial picture before you sell your accounting practice.
Suppose your practice has significantly increased in value. In that case, you may want to cash it out and have that money to invest in your next opportunity or save for retirement.
Even if you are still engaged with your business, it might make financial sense to sell the firm. Then you can soak in the profits and the value of your hard work and sound financial decisions.
You’ve Experienced Life Changes
Life now is undoubtedly different than when you first bought or established your accounting practice. You may have gotten married, had children, moved, or grown your career.
What worked for you then may simply no longer be a good fit for your stage of life or where you want to go in the future.
There are also unexpected life changes that can make it hard to own and operate an accounting firm. These could include divorce, disease, and the death of a loved one, which can cause stress and pull your energy away from the firm.
You may also feel like owning the practice adds excess stress to your life during an already stressful time. Taking the firm off your plate could be a big stress reliever and allow you to focus on other life situations.
One of the most common life changes that lead to selling an accounting practice is if you are nearing retirement. You may want more time for yourself, to work on your hobbies, or to travel. After a great career, retiring is a reason to celebrate.
However, that doesn’t make it any easier to walk away from a firm you’ve dedicated yourself to for so long. Selling your accounting firm can provide you a significant nest egg for retirement and set you up financially for the rest of your life.
Is it time to sell your accounting practice? Only you can make that decision. These signs can help point you in the right direction and help you know if the time is right to cash in your firm and move on to your next adventure.