What happens in the first two years after I sell?

What happens after the sale surprises a lot of owners. You signed, the money moved, and on Monday you are still at the shop, now working for someone else. For most trade company sellers, the first 6 to 24 months after closing bring a handover period, a set of promises you made in the purchase agreement, and maybe an earnout you are still trying to earn. Then come the personal questions: what you do with your days, and how you pay for health insurance until Medicare.

This guide walks through that stretch in order, so you can agree the terms before you sign instead of finding out later. For the bigger choice of whether to stay at all, read stay on or walk away.

A typical timeline

This is our general picture, not a rule. Your agreement sets the real dates.

Transition and consulting agreements

Almost every buyer wants you around for a while, because your customers, crews and suppliers know you. That help is written into a transition services, consulting or employment agreement. Get it in writing before closing, and cover:

• Role. What you do and don't do. "Introduce top 20 customers and train the new estimator" beats "help as needed".
• Hours and place. Full time for 60 days, then 10 hours a week, by phone after month 6, for example.
• Pay. A daily or monthly fee, or a salary. This is separate from your sale price and is usually taxed as ordinary income. See taxes on selling.
• End date. And whether either side can end it early.

If the buyer uses an SBA loan, your role is capped. In a full change of ownership you can stay only as a paid consultant, for up to 12 months under SOP 50 10 8, and you cannot remain an officer, owner or key employee. Prencipe reports that SOP 50 10 8.1, for loans numbered on or after October 1, 2026, raises that to 24 months in total, and that the seller still may not be an operational decision maker. Ask the lender which version applies, in writing.

Non-competes and non-solicits

Most purchase agreements include a promise that you won't start or work for a competing company in a set area for a set time, and won't hire away staff or customers. The IRS treats a covenant not to compete made when a business is bought as its own class of asset, so it can also have a price and tax effect.

Read three things: the area (your county or the whole state), the length, and what counts as competing. Can you still do a favor job for your neighbor, teach at the trade school, or consult for a supplier? State law on non-competes varies, so have your attorney check yours. Don't sign one so wide that you can't do the part-time work you planned.

Telling your employees and customers

This is the part owners worry about most. One HVAC owner asked whether a PE buyer would raise prices and push techs to sell more, and TurnPoint addresses "horror stories" on its own page. Roofing Contractor has written about the stress consolidation puts on workers.

What tends to work:

1. Tell your key people first, and before the deal is public if the buyer agrees. Many buyers ask for retention bonuses or stay agreements with your GM and lead techs. One plumbing podcast claims incentive plans set up 12 to 24 months before a sale can lift value; that is their claim.
2. Tell the whole crew together, in person, with the buyer there. Say what changes and what doesn't: pay, benefits, trucks, schedules, the name on the door.
3. Call your biggest customers yourself. A letter or email to the rest, signed by you and the buyer.
4. Be honest about what you don't know. If pay plans may change next year, say so.

Agree the message with the buyer in advance. Promises you make to staff about the future may not be yours to keep.

Earnout periods

If part of your price is an earnout, the clock usually runs one to three years after closing. During that time the buyer runs the company and you depend on its results. Where an earnout paid anything, the median payout was 43 cents on the dollar, according to SRS Acquiom data reported by Salt Creek Advisory. Ask for monthly reports, the right to check the numbers, and clear rules for disputes. Our cash at closing guide covers how to set targets.

Escrow, claims and your old company

The escrow or holdback set aside at closing is usually released after an agreed period if no claims come in. Until then, a warranty claim or an old tax bill can reduce it. Keep your records.

If you sold assets, you still own the old company. It may need to collect old receivables, pay final bills, file final returns and stay insured for claims on past work for a while. Ask your CPA and attorney when it can be closed.

Staying on vs walking away

Some owners love a year of helping without the weight of payroll. Others find it hard to watch someone else change what they built. One HVAC owner weighing an offer asked plainly whether he would regret selling. Decide what you want before you negotiate. A longer stay can protect an earnout and help your people. A clean break can protect your health. Our stay on or walk away guide has a 1 to 3 year plan.

Health insurance before Medicare

If the company pays your health insurance today, that usually ends when it changes hands. Medicare generally starts at 65. If you sell before then, plan the gap:

• COBRA, if your company plan covered 20 or more employees in the prior year, for a limited time and at up to 102% of the cost. Whether it is available after the sale depends on the deal, so ask your attorney.
• A Marketplace plan. Losing job-based coverage qualifies you for a Special Enrollment Period. Your income in the year of sale may be high, which can change what you qualify for.
• Coverage through the buyer while you work there, or a spouse's plan.

Put this on your list before you sign, not after. See income from sale proceeds.

Common mistakes

• A transition agreement with no end date. "Help as needed" can become a second job without the pay.
• Signing a non-compete wider than you need. Keep room for the part-time work you want.
• Letting staff hear it from someone else. Plan the day, the room and the words.
• Forgetting health insurance until the last paycheck. Gaps are expensive and some enrollment windows are short.
• Ignoring earnout reports. Check them every month, not at the end.

Questions to ask your CPA, attorney or broker

1. What exactly does my transition or consulting agreement require, and when does it end?
2. If the buyer uses an SBA loan, which SOP version applies and how long can I stay?
3. How wide is my non-compete, and is it enforceable in my state?
4. How is my consulting pay taxed, separate from the sale price?
5. What reports and audit rights do I have during the earnout?
6. When is escrow released, and what claims can reduce it?
7. What will my health insurance be from closing until Medicare, and what will it cost?
8. When can I close my old company, and what insurance should it keep?

Sources

1. Prencipe International, SBA caps how long your seller can stay
2. IRS, Instructions for Form 8594
3. Reddit r/ProHVACR, Should I sell the business?
4. TurnPoint Services, Grow Your Business
5. Roofing Contractor, The Roofing Consolidation Boom and Its Impact on Workers
6. PM Magazine, Retention: The Best Exit Strategy
7. Salt Creek Advisory, Who Buys Plumbing Companies in 2026
8. Medicare.gov, When does Medicare coverage start?
9. U.S. Department of Labor, COBRA continuation coverage
10. HealthCare.gov, Health coverage for retirees
11. Illinois Roofing Industry Licensing Act (225 ILCS 335)
12. Florida Statutes 489.119, Business organizations; qualifying agents
13. Texas State Board of Plumbing Examiners, Responsible Master Plumber
14. California CSLB, Change in Personnel