Selling Your Solo CPA Practice: How? When? Now What?
May 11, 2026
By Armando Roman
For the sole practitioner CPA, your firm is more than a business — it’s your legacy, your source of income and in many cases, your retirement plan. Transitioning out of practice requires careful planning: how you sell, to whom, at what price and what to do with sale proceeds. I sold my CPA firm 19 years ago — some things have not changed. Let’s explore a few common exit strategies.
Sell to a Key Employee
This sale involves identifying an employee in your practice who purchases your firm over time, often through an earn-out or installment sale.
Pros: Client retention is typically highest — buyer and clients already have a relationship or it’s easy enough to create one. Transition is smoother. You can negotiate a gradual phase out on your terms.
Cons: The employee often can’t afford to buy you out, requiring that you carry a note. If the buyer changes their mind and backs out, you may have to start all over again but now
with less time. Finding that employee in a market where there simply aren’t enough CPAs to go around can be difficult.
To mitigate your risk, try to get Small Business Administration financing, and require life insurance on the buyer naming you as the beneficiary and that the insurance be maintained until you are paid in full. Consider requiring a disability insurance policy on the buyer as well. Include provisions for “what if’s” in your sale agreement, to protect your
interests. Here’s where a savvy merger and acquisition (M&A) attorney earns their keep.
Sell to a Larger CPA Practice
Selling to a larger CPA firm is one of the most common exit routes for sole practitioners, but you need the client base that they want. Would they want your clients? Would your
clients be willing to pay their fees?
Pros: You are more likely to get paid, likely part up front with an earn out. The buyer typically has infrastructure and staff to retain clients. Higher likelihood that your sale will work post close with less dependency on you.
Cons: Clients may not connect with the acquiring firm’s culture. Do not underestimate the value of their corporate culture versus yours — I made this error when I sold. You may be subject to a one to three year non-compete agreement (you’re retiring, who cares?). Billing and fees may be higher — will this drive your clients away?
To mitigate risk, do all you can to foster a relationship between the new service provider and the client.
Merge with Another Sole Practitioner
Two solo practitioners combine their practices, often with one party eventually buying out the other on a pre-agreed timeline and pre-arranged buy out formula.
Pros: No upfront cash required — practice is exchanged for equity or revenue sharing. Combined scale lowers overhead per partner and improves service capacity. You can
ease out gradually.
Cons: Personality and style conflicts can derail the arrangement. You’ve been the one in charge for years, and now you’re not? Ownership and governance must be clearly defined and written, or disputes will arise.
Delayed liquidity — you may wait years for full payment.
To mitigate risk, engage a business attorney experienced in professional practice mergers. This may not be your normal business attorney. You need a specialist, an M&A attorney. You can’t mess around with this sale – the stakes are too high. Define everything in your written legal agreement.
Sell to Private Equity
While financial advisors have been buying CPA firms for quite some time, private equity has not. Until now. Private equity of course is there 100% to make money, buying your
firm and streamlining as much as possible … get rid of the fat, get rid of the nonprofitable client work (and nonprofitable clients), and make money. On the bright side, they’ve
also made your firm more valuable, driving up valuations of CPA firms across the board. Hate them if you will.
Pros: This is what they do. They buy practices. They want to get this deal with you done and move on to the next. In and out. They don’t want you lingering around to muck things up.
Cons: They won’t see your clients the same way you look at them. They don’t have a relationship with them and they may not want it either. You are up against professional buyers. Get a professional seller on your side to protect your interests.
To mitigate risk, hire a good M&A attorney and a good M&A advisor to guide you in this deal. It’s just that, a deal.
AI Threat to CPA Practice Value
Artificial intelligence can’t replace living, breathing you and your years of experience and wisdom, but AI represents the most significant wildcard going forward. Will AI cause your practice value to decline substantially in the next few years? Or, can you harness AI to make your practice more valuable?
AI-powered platforms (Intuit’s AI tools, TaxGPT and others) automate individual and small-business tax return preparation, reducing the perceived billing value of tax
compliance work. Cloud accounting software with AI automation is doing the same for bookkeeping. AI tools are now able to answer routine tax questions — although not
always correctly — reducing clients’ perceived need for professional consultation on basic matters. Given the shortage of CPAs, maybe this use of AI isn’t such a bad thing for 85%
of the public.
Generating Retirement Income with Sale Proceeds
Take an honest look at where you are and where you can be after this sale. You help clients navigate complex issues all the time, but it can be very hard to see yourself objectively. At AXIOM, our planning starts with values, and your planning should too. AXIOM is a wealth advisory firm for founders where our planning starts with values and
your planning should start there too. You only have so many years left to live. How do you want to live them? What’s most important to you? When you take your last breath, and look back at your life, what will make you say to yourself, “I’m really glad I did that.”? What is “that” for you? Will you feel fulfilled by being with the grandkids and being part of their
lives? Do you want to travel? How do you want to live? Your values should drive your retirement planning.
Studies show that the happiest retirees have a steady monthly income. The usual suspects would be pensions, social security, annuities, interest (CDs, US Treasuries, bonds), dividends (blue-chip stock or other), rental income, etc. Each income source involves risk. As you contemplate selling and retirement, you may be more risk-averse than ever. Retirement income and expenses need to jive (pardon my French). You may need to adjust expenses to make the numbers work — downsize to a smaller home, move
to a less costly area to live. Inflation, that nasty “I” word, eats away at your income every year. When you live another 30 years, your income must keep up with inflation. And of course, taxes, taxes, taxes eating away at every dollar coming out of your qualified
plan. At AXIOM, our software models these numbers far better than the spreadsheets I used back in the day.
Look at your overall net worth, including net sale proceeds from your practice. That’s what you have to work with, along with income from other sources. Now, how do you make the numbers work for the next 30 years?
Final Thoughts
Imagine. You just closed on the sale of your practice. The birds are chirping, you got top dollar for your practice and you feel AMAZING! That’s what’s possible with thoughtful
planning and preparation beginning two to five years before exit.