What’s Next for You? Succession Planning Matters Now

Running an accounting firm takes a lot of work—I know it firsthand. Juggling client demands, making sure the team has the support they need, and staying on top of never-ending deadlines makes it hard to look past this month, let alone think about what your firm will look like in five or ten years. Will you still be doing what you’re doing? Will you have moved into a new role at your company? Or will you have sold your firm and retired to the tropics?

As my kids grew up and I found myself wondering what the heck I was building towards, I had an aha moment—I wanted to build something that left a bigger legacy than supporting my family.

And I’m guessing that even if you haven’t thought much about it yet, there will soon come a day when you want to make sure all your hard work now can also support your retirement. While it’s not exactly accurate to say if you're not planning for succession, you're planning to fail, it is true that if you’re not setting goals and working towards them, you’re bound to stay stuck.

And here’s a reality—a lot of people in our profession are aging (even more so during busy season). Baby boomers are mostly retired at this point, and Gen X is closer on their heels than any of us like to admit, taking with them decades of know-how and client relationships. Meanwhile, finding and keeping top talent is harder than it’s ever been.

I’ve heard merger and acquisition conversations everywhere lately, so it’s a hot topic. And one thing is true—whether you eventually want to grow or sell via M&A, or sell to your nephew, a solid succession plan is your ticket to staying relevant and valuable. But what does that look like for you?

Over the last year, I’ve spoken with quite a few companies who are ready to have M&A and succession planning conversations—both clients and industry colleagues. Here’s the breakdown of what you need to know to grow.

Take Stock of Your Team

First things first: take a good, hard look at your team. Who are your great number crunchers? And who is a great leader or potential leader?

Use assessments and feedback, plus what team members tell you about their own goals to figure out who emerges as a long-term asset to your firm, and who you can support and mentor as a leader in the short-term.

Once you've spotted your rising stars, figure out what they're missing. Maybe they're wizards with spreadsheets but get a deer-in-the-headlights look during client meetings. Or they're great with people but break out in hives at the mention of business strategy. Identify those gaps and start filling them pronto—either through in-house training or hiring to create the structure you want.

Create Your Succession Roadmap

You need a plan, and not just a vague "someday, I’ll do XYZ.” We're talking timelines, SMART goals, training programs, and a plan for how to benchmark success. Think about:

• When key players might bow out (gracefully or otherwise)
• How you'll groom your future leaders
• Who'll take over those all-important client relationships

Don't keep this plan locked in a drawer. Just like you and I see with clients, any plan is just words on a page if you’re not following it. Review it regularly, work it, and update it. Things change, people change, the market changes. Your plan needs to keep up.

Knowledge Transfer and Mentorship

The last thing you want is for critical information to slip through the cracks. Start documenting everything from the little tricks or “magic” emails for dealing with tricky clients to the knowledge that makes your firm special. It can’t all live in your head—and trust me, I struggle here too. But the reality is, get it on paper, mentor your team members, and encourage your senior team to mentor junior employees.

Anyone can learn QuickBooks skills—but transferring the intangible knowledge and “soft” skills can set your firm apart.

Legal and Financial Stuff You Can't Ignore

Now for the part that'll make your head spin: the legal and financial side of succession. As accountants, you understand the numbers, but when it comes to valuing your own firm, it can be tough to be objective, so if necessary, bring in a neutral third party to help. To that end, don’t forget how quickly the tax implications of passing on your firm can get messy.

As for legal, bring in an attorney early in your succession planning process to ensure that you don’t have any surprises as you get closer to the finish line. Think of it this way—when our clients include you and me in the planning process, we can help them make better decisions. The same goes for attorneys and succession planning.

And if M&A is on your radar? Your succession plan just became your secret weapon. A firm with a clear plan for the future is like catnip to potential buyers or partners. It shows you've got your act together. More importantly, in doing so, you can confidently sell for top dollar.

Be Transparent

Keep your team in the loop and be truthful and open about where the firm is headed and how they fit in, especially as R-day (retirement day) goes from “someday” to within the next few years. It'll keep the rumor mill from churning out doom-and-gloom scenarios. And if you can show them the role you’re hoping for them to play in the future of your firm, they’re more likely to buy in and support your growth.

Don’t stress about sharing your vision with clients if it’s 5-10 years out. But as you get within 1-2 years of moving on, make sure they understand how you’re making sure they’ll be taken care of and your level of involvement during the transition period.

In the end, succession planning is more about shaping the future of your firm and your golden years — to ensure that all your work pays off not just in the short term but for years to come.