Despite advising clients on their succession plans, accountants often put the needs of their own practices on the back-burner.
According to CPA Australia figures, there are just under 11,800 public practices, and of these, 89% are represented by sole practitioners and two-partner firms. With the average age of public accountancy practitioners now well over 50, an increasing number may well be contemplating how they will manage the succession of their practice – all against a backdrop a larger number of smaller practice units delivering similar services to a similar client base. According to CPA Australia approximately 42% of members may have a succession event in the next five years.
Whichever side of the plan you sit on, BOQ Specialist’s financial consultant Ryan Painter has identified five top tips to help you successfully plan and implement your succession.
- 1. Think ahead
- Succession is not a quick process and needs to be at the forefront of every practitioner’s mind. Whether you are approaching retirement or approaching partner level, the process of succession can take at least ten years so start thinking well ahead of time.
- 2. The generation game: explain the benefits to Gen Y
- As employers, it’s best to plant the succession seed early and understand what up and coming recruits want out of their career path. Firms should ideally invest time with Gen Y to outline the benefits of becoming a partner in the firm and controlling their own destiny. In an increasingly ageing profession this will be critical for future growth and success of the industry.
- 3. Align cultures to ensure client continuity
- While a well executed plan will help you to reap some equity out of your business, a fully encompassing plan will ensure that your clients see continuation of service offering particularly in terms of quality. Think about where other businesses might have a similar area of expertise and cultural similarities, it will help with a smooth transition and support retention of clients on either side.
- 4. Keep an open mind and be flexible
- The onset of the GFC understandably caused many baby boomers to delay their retirement plans. With market conditions currently more favourable, many partners are set to sell or leave their practices in the next few years. While an internal handover might be appealing and seem the easiest pathway, you need to be prepared to be flexible and adapt to the way the market is going.
- 5. Walk the talk
- What better case study to discuss with clients than your own examples of how you have prepared your business for your own succession plan. Whether you looking at junior professionals or senior hires, think about tangible examples you can share with clients.