The Emotional Side of Selling or Buying a CPA Firm

By Kathy Brents, CPA, CBI
February 2019

Dale Carnegie once said, “When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.”

What exactly is an emotion? For our discussion on seller and buyer emotions, we need to define what an emotion really is. The Urban Dictionary defines an emotion as: mentalstate that arises spontaneously rather than through conscious effort and is often accompanied by physiological changes; a feeling.

In addition to understanding exactly what emotions are, researchers have tried to identify and classify the different types of emotions. Psychologist Paul Eckman suggests the basic emotions universal throughout human cultures are: fear, disgust, anger, surprise, happiness, sadness, embarrassment, excitement, contempt, shame, pride, satisfaction and amusement.

There have been numerous articles written telling you how to sell, buy or value a CPA firm, but rarely is a business transaction examined from an emotional perspective. It’s important to be aware of our emotional state while making critical decisions. Regardless of how we consider harnessing emotion, understanding why sellers and buyers feel a certain way can assist with solidifying their choices.

In my experience, five emotions seem to be most common to the sales process: fear, sadness, excitement, pride and satisfaction. Any one of these emotions can cause a seller or buyer to become “stuck” in the process. Becoming stuck can kill the deal or at best, greatly impede the process.

In any given transaction, a buyer and seller can experience some or all of these emotions. That is why it is vitally important to understand how experiencing these emotions can be detrimental to completing a sale, work through some ways to mitigate the impact these emotions can have on sellers and buyers, and move forward to closing the deal. Through planning and education, sellers and buyers can overcome their fears and experience a “win-win” deal!


If not addressed, fear can cause people to totally shut down during the process of buying and selling a firm. If either party gets stuck in the grip of fear, the deal will never close.

Common seller fears include: fear of not choosing the right buyer, fear that clients will find out about the sale and choose to find a new CPA, fear that they will not be paid adequately for the practice, fear that employees will find out and leave, or fear of what they will do after the sale.

Buyer fears may include: fear that their current employer will find out they are trying to purchase a firm and fire them, fear of failure, fear that the clients will leave, fear that the employees will leave, or fear they will not enjoy owning or managing the firm.

It is not that these fears are without merit, but with the right plan in place, most of them can be addressed and minimized.

Common ways to alleviate fear come through education and proper planning. Sellers and buyers should consider doing their “homework” regarding all aspects of the deal; pricing of the practice, deal structure (what terms work best for all parties?), negotiating, document prep, closing, and the most important aspect of any deal, how to transfer the clients and employees successfully to the new owner.

Setting the asking price is important. If the asking price is too high, buyers will not consider the firm and sellers may lose opportunities to work with some good, qualified buyers. If the price is too low, sellers will lose out on reaping the maximum value for their asset. The asking price should be determined based on many factors with location, cash flow and mix of revenues being a few of the most important determinates of a firm’s value. Make inquiries and read articles about valuing firms to educate yourself further during this process.

Entire books are written on deal structure, but for this discussion we will focus on the most popular terms firms are sold under in the market today. Cash deals are still viable as conventional lenders and SBA lenders are, in some cases, offering to finance up to 100 percent of the purchase price of a firm. Other firms are sold with a portion of cash paid to the seller at closing, and the balance due payable over a length of time under a fixed price arrangement or with a revenue guarantee feature. Proper planning in the deal structure phase can reduce fear as all parties evaluate how the terms of the deal affect them. The goal is to create a deal that is a win for all parties!

There are many reasons a seller should not deal directly with a buyer, with confidentiality being the number one reason. How can you, as a seller, discuss the sale of your firm with any buyer without breaching your own confidentiality? It cannot happen. Having a third-party intermediary handle the deal offers great comfort to any seller, thereby removing some of the fear factor.

It is difficult for a seller to handle the negotiations of their own deal without giving up too much ground. Once you agree to something, you cannot take it back. Try to determine what you believe are reasonable terms before negotiations begin. This will help you determine if a deal can be culminated between the parties. If the right buyer and the right seller come together, a reasonable deal can usually be worked out, but knowing ahead of time what you can accept will reduce stress in the process.

Preparing documents is a job for the attorneys. Selling or buying a firm is best handled using a team approach. You most likely will not need to consult another accountant, but you will need to have an attorney assist with document preparation, document review or other legal questions prior to closing the deal. As a seller, if you are asked to finance a portion of the deal, you will need to make sure you have the proper documentation in place to ensure you are protected, such as a Promissory Note with a personal guarantee executed by the buyer.

You are a professional and you should use professionals to assist you in this process! Selling or buying a business is not something you do every day and it is too important to leave to chance. Consulting with, and relying on, professionals will also reduce your level of stress.

For sellers and buyers, talking through all aspects of the transition process will provide comfort to all parties that the next steps taken after closing will ensure a successful transfer of the clients and employees. You may need to prepare a step-by-step procedures worksheet that is agreed to by all parties to make sure everyone involved is on the same page about what will be involved to accomplish this successfully. Which clients will need face-to-face introductions to the new owners? What steps do we take to answer the employees’ questions and address their concerns? There will be many questions to answer before closing, but proper planning will reduce the stress level for all concerned.

Sadness and Excitement

Sadness and excitement are two emotions sellers will often vacillate between. They may be excited about leaving behind the long hours or administrative duties, but will miss the daily routine and interactions with employees and clients.

While it is common to feel both emotions simultaneously, after the sale, the seller usually becomes more peaceful about his/her decision to sell, especially after settling into a more relaxed, fulfilling lifestyle.

Buyers may also feel these emotions, but for very different reasons. As they enter this new phase as a firm owner, buyers need to remember why they chose to make the leap.

Firm ownership can be overwhelming, but very rewarding. Again, education and planning are key to minimizing emotional struggles. Buyers should work to develop a core group of CPA firm owner peers to consult when a question arises. Having a support group, per se, can minimize stress levels.

State organizations, such as TXCPA, offer many education opportunities that will assist with networking and gaining additional knowledge about owning and managing a CPA firm.


Pride can have both positive and negative connotations. The positive form is pride in a job well done, pride in the fact that a firm owner worked hard to grow and develop a successful business, and pride in knowing they provided great service to their clients for many years.

The negative side of pride shows up when sellers truly feel that their clients will not transition to any other CPA. When CPAs say that, I ask them what their clients will do if they are unable to continue to work. We are all human and our clients will not have a problem filling our shoes with another accountant. This may sting, but it is the truth.

Buyers can experience a negative form of pride, as well. They may believe they can purchase a firm and immediately change the entire operation of the business. Buyers are often energetic and well versed in the latest technology. However, making vast changes too quickly can adversely affect the retention of the clients and employees. Maintaining the “status quo” during the initial transition allows all parties to get comfortable with the new owner. After a while, change can be welcomed.


Satisfaction is that moment when the deal is inked and the initial transition phase has passed. The seller has received positive feedback about the sale from former clients and employees and realizes that the buyer is a good fit for the firm. This is the “ah-ha” moment all sellers hope to experience.

The buyers’ “ah-ha” moment is similar. They see from the first few months of operating the new business that they can be successful. The clients and employees have accepted them. The cash flow of the business is sufficient for their needs. The outlook is good!

Emotions are not good or bad; they’re just based on feelings. It’s important to approach any sale or purchase of a CPA firm with eyes wide open, realizing that education and planning are key factors that can help everyone achieve a “win-win” deal.

About the Author: Kathy Brents is a business broker, a former practicing CPA and the managing member of Accounting Biz Brokers, LLC. She has facilitated the sale of hundreds of CPA firms, including her own. Contact her at




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