By Amy Vetter
Having the best interests of others front-of-mind is part of who we are as accounting professionals. Being so busy with client work, it’s not often that we take a step back to think about our own interests. You’ve worked hard your whole life to build a successful practice and, not only does your firm deserve to continue thriving once you retire, so too do you.
Your retirement daydreams – whether that be sailing through the Mediterranean or moving away from the hustle and bustle of the city – will one day become a reality; made possible through careful planning today.
Here are a few succession planning issues you should consider today to lay the groundwork for your future:
No. 1 – Choosing the right successor
This can be a daunting task. Rather than starting by creating a list of potential successors, start by thinking about your clients.
If you have a few potential successors in mind, think about how their skill sets benefit your client base today. Will this still be the case 10 years down the road? Think about how your client base will evolve. In addition, do your candidates stay abreast of new trends in the accounting industry and embrace them?
After affirmatively answering these questions, there’s still more to consider. Does your candidate possess the right mindset? Are they a tactician or a strategist? Your practice will need a leader with a vision to complement those in your firm who execute.
If you have a few potential successors in mind, think about how their skill sets benefit your client base today.
No. 2 – Taking your own advice
Helping businesses manage their finances is your job. You regularly may advise clients on the very topic of succession planning.
Taking the method of planning you use with clients and applying it inwardly is a great way to go. Do you want to take on additional partners? Do you want to sell? Using the answers to these questions to plan the framework of your intended succession goals will help align these goals with your business processes and infrastructure.
Treating clients as shared entities is a key driver behind succession planning. Rewarding partners for referrals into other services lines is a more valuable compensation model, rather than basing it on their book of business entirely.
No. 3 – Communication with your successor
Communication is key when it comes to succession planning. It may sound obvious, but have you actually approached your intended successor and shared with them your thoughts for the firm’s future? You may have had the conversation with yourself, but your chosen successor needs to know your plan, and more importantly, agree.
Make sure your successor is involved from Day 1. Make them a part of your planning process. Depending on your style, the relationship may transition from a mentor-mentee situation to a partnership. Bringing them in from this early stage will mean their eventual ownership will be a smooth transition for everyone.
No. 4 – Letting go
The handover can be quite an emotional process for some. This huge chapter of your life is coming to a close. When there is family involved in the practice, ties can be even harder to sever.
There is a delicate line in the sand that needs to be drawn, especially when it comes to family. Speaking about the transition ahead of time with family members will make stepping back easier when the time comes. While you have your family’s best interests at heart, avoid “checking in” as this will give them the independence and confidence they need to thrive.
There is no better time than now to start thinking about your future. Thinking about these issues early on will save you frustration down the road. Your future self will thank you.
Amy Vetter, CPA.CITP, CGMA, is the Global VP, Education & Head of Accounting, USA, at Xero. Follow her @AmyVetterCPA.