In Planning Your Exit Strategy, Fear is Your Enemy

Source: Pennsylvania CPA Journal

This article has many practical considerations for planning an exit strategy, whether through internal succession, or sale or merger of the practice. Here are some highlights. To read the complete article, click on the link at the end of this review.

• Fear of losing clients to departing staff has had a perverse effect on accounting practices. Because of this fear, partners or sole proprietors cultivate technical competence among staff and restrain them from growing into business developers and client relationship managers. As a result, potential successors may leave the firm, jeopardizing continuation of good client service when you retire. Thus, fear of losing clients becomes a self-fulfilling prophesy.
• Provide your promising staff members with career paths leading to more responsibility. They will be more likely to stay with the firm for the long term. This will allow the firm to operate for periods of time without the owner and, of course, help ensure smooth succession without loss of clients.
• But some good people inevitably leave the firm. So be sure to cross train others to assume their responsibilities.
• Stop shunning your competitors because you fear their rivalry. They may be potential merger candidates. You may preclude a merger with a firm geographically well positioned to assure continuation of your practice.
• Do not try to do everything yourself. Your time may be better spent if you engage outside consultants to help with recruiting, internal processes, and succession planning.
• It is never too soon to plan for the future.

From Pennsylvania CPA Journal, http://www.picpa.org/, Winter 2008.

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