Amanda Gascoigne FCA sold her accounting practice at the age of 46. She describes the experience as a hugely emotional and challenging time.

“We’ve put our heart and soul into this business. It’s not just a business – it’s our identity. It’s our life’s work and all those relationships were built with clients, colleagues... It’s so important,” says Gascoigne, who now coaches and mentors small and solo accounting practice owners.

“We’re losing our identity potentially and there’s a loss of control and a fear of the unknown – what are we going to do?”

Why the decision to sell can be the hardest part

Mark Emney, co-owner of specialist accounting sector business broker DMY, says selling an accounting practice is just as much an emotional journey for the owner as it is a business transaction.

“What you’re effectively selling is your client and staff relationships, and years of hard work,” he says.

He believes the most stressful and difficult time for accountants wanting to exit their practice is often in the lead-up to the sale process, when they have to make the decision to sell.

“At that time, they’re committing to sell but they don’t know who the buyer is, there’s almost this kind of black hole and they can’t quite picture who the right buyer is,” he says.

“Whereas once they start going through the process and start meeting good-quality, vetted buyers, they realise there’s a lot of demand for good practices and a lot of like-minded buyers out there. They can see the cultural fit with certain parties.”

Sellers should lean on their support network at this stressful time, talking to their families as well as other accountants who have been through the same process.

Getting the business sale-ready

Of course, wanting to achieve the desired sale price can also add to the stress. Ensuring that the business is sale-ready in advance of the sale will alleviate this concern. Practice owners should start crunching the numbers early and consider what they need to do to receive what they think the practice is worth.

“It’s like any business: if you decide to sell tomorrow, you’re probably not going to optimise it. But if we’ve got that runway, we can get our ducks in in a row,” Gascoigne says.

Start thinking about your personal deal breakers in a sale too. For Gascoigne, it was ensuring her clients and staff would be looked after by the new owner.

Designing your role

Emney says a sale also doesn’t have to be “all in” or “all out”: practitioners can opt for an extended transaction. They can sell the practice and leave the day-to-day staff and business management to the new owner, while continuing to work in the practice and interacting with clients. For many accountants, that’s why they got into the profession in the first place.

“We often say to owners that there are few times in your life when you get to design the ideal role and when you sell your practice is one of them.”

Like Gascoigne, Emney says it’s important to start planning early. If the practice is dependent solely on the owner and they have all the client relationships, it’s going to be harder to sell and a more difficult transition.

When sales go wrong

There are times when the sale of a practice by a stressed or busy practitioner can go wrong, leading to complaints to the CA ANZ disciplinary body. In particular, communication with the clients about the change of ownership of the practice can be lacking.

“Sometimes there’s no communication or inadequate communication. If clients are transferring to a wholly new entity that can lead to problems if it’s not communicated properly around billing,” says Rebecca Stickney, CA ANZ conduct leader, New Zealand.

“The work might have been done in the old entity, and then there’s confusion about where fees should be paid to and then disputes around the wrong entities being paid.”

Kate Dixon, CA ANZ conduct leader, Australia, says complaints also arise when the purchaser hasn’t entered into terms of engagement with the clients, then runs into confidentiality issues about accessing their information.

Disputes can also arise if practitioners sell their practice but aren’t ready to move on, says Stickney.

“Where it comes unstuck is when you’re so emotionally invested; maybe the other person’s doing something a different way,” she says. “You see it where sometimes members stay on in a consultative role in the new firm and then that goes on a bit long, and the wheels fall off the relationship. It’s like a bad breakup and there’s acrimony.”

Planning for the owner’s exit – including an unexpected exit – is a requirement for practice owners. Under APES 325 Risk Management for Firms, succession planning is mandatory for all chartered accountants in public practice in Australia as part of a practice’s business continuity risk management. In New Zealand, a succession plan is generally expected as part of an effective quality management system, which is required by the New Zealand Institute of Chartered Accountants (NZICA) PS-1: Quality Management.

Life after practice

Gascoigne says practice owners often overlook the question of what comes next after they sell, and planning this better will reduce stress. She suggests that owners planning to retire should start to transition to a new hobby or interest before they sell the practice, such as playing golf or tennis one day a week, or volunteering.

“It’s really important to keep active and to do things and to make the most of that exit life,” she says.

Or, if the practitioner is younger when they sell, it’s important to have a plan for the next stage of their working life.

Adopting a different mindset can also be helpful. Rather than seeing the sale of the practice as the end of something, practitioners can look at it as a chance to do something else. “It’s an evolution and not the closing of a chapter,” Gascoigne says.