Succession and Exit Strategies - Laying the Groundwork for a Seamless Transition

In the lifecycle of an accounting firm, the day will come when its founder must step back. Whether that moment is five or fifteen years away, having a plan makes the difference between a smooth succession and a chaotic, value-eroding scramble. Succession and exit planning are two distinct but complementary strategies that every firm owner should engage in—early and intentionally.

Understanding the difference: Succession vs. Exit 

Succession planning focuses on the business: it prepares a smooth transition of leadership that maintains the continuity of the business. Exit planning, on the other hand, focuses on the how: how the firm owner will convert the value of the business into personal financial freedom. 

• Succession planning ensures your team, clients, and operations continue smoothly after you step away. 

• Exit planning ensures you are ready—financially, emotionally, and strategically—to let go. 

Both are necessary. Both take time. 

Why plan ahead? 

Owners often think of planning their exit as a future problem. But waiting can lead to a range of risks: reduced firm value, missed tax planning opportunities, and unprepared successors. Planning ahead allows you to: 

• Take care of your team and clients 

• Minimize tax exposure 

• Align the firm’s value with retirement goals 

• Preserve your vision and culture 

• Avoid the personal and professional turmoil of an unplanned departure 

Key factors to consider 

What type of seller are you? 

Different sellers take different paths. Some maximize profits and draw down over time. Others aim to build a legacy, transition to internal leaders or family members, or sell to a 3rd party. Knowing your selling identity helps frame your planning decisions. 

Who is your ideal buyer? 

Are you seeking: 

• A legacy buyer who wants to continue your brand and values? 

• A book-of-business buyer focused only on acquiring clients? 

• A private equity group or large firm with broader investment or growth goals? 

Being clear on this helps you structure your firm to attract the right buyer. 

Is your practice ready? 

Your firm must be financially, operationally, and culturally prepared for new leadership: 

• Financial readiness: Clean books, stable MRR, low debt, and predictable growth 

• Operational readiness: Clear org chart, documented SOPs, standardized tech 

• Cultural readiness: Team alignment, leadership development, values continuity 

Are you ready? 

You can have the best plan on paper, but if you’re not emotionally ready to let go, it won’t work. This includes preparing your family, setting up post-exit plans, and defining how you’ll stay involved (or not). 

Navigating stakeholders and obstacles 

Transitions involve more than just numbers. Consider the full spectrum of stakeholders: 

• Internal management and staff 

• Clients 

• Family members 

• Legal and tax advisors 

Obstacles may include unclear communication, resistance to change, or over-reliance on a single individual. Addressing these early reduces risk and ensures smoother execution. 

Building your succession support team 

You don’t have to plan alone. Assemble a team that may include: 

• Internal management leaders 

• A valuation expert 

• A therapist or coach 

• Insurance and legal advisors 

• Change management consultants 

This team helps you address both tangible and intangible aspects of the transition. 

Practical steps to get started 

1. 1. Pick a date. Not "5 years from now," but an actual target date. 

1. 2. Evaluate your readiness across the key factors mentioned above. 

1. 3. Identify one action you can take now, whether it’s documenting SOPs, starting leadership development, or scheduling a valuation. 

Plan early, transition smoothly 

A well-thought-out succession and exit strategy is not just about departure—it's about legacy, continuity, and value preservation. Whether you plan to sell, transition internally, or phase out gradually, start now. The sooner you begin planning, the more choices you'll have and the more successful your transition will be.