Don’t hold back succession plans
Does your firm have a transition plan in place if a key partner decided to retire or became disabled? Francesca Zelasko offers advice on choosing replacement leaders and ensuring continuity.
As the Baby Boom plays out, many accountancy firms will have a partners who will reach retirement age in the next decade. They know it’s coming, so there’s nothing to stop them starting to develop a succession plan now that will ensure retiring are able to extract their fair share and compensation payments when they go.
The first step in developing a succession plan is to decide what future you want for your firm. If you want the firm to remain independent, start training younger partners now in business development and management skills. Teach them how to manage the firm and become leaders.
If merging or selling out is a more likely course, start identifying potential acquirers. Deciding to sell or merge can be hard, particularly if there are different views within the partnership. Planning for the future can be hard if individual partners want to achieve different goals or are working to different timetables.
If several firm want to retire around the same time and haven’t groomed younger partners to take over, they may have already effectively made the decision to look for a sale or merger.
Developing new leaders
It can take up to five years to prepare junior partners for leadership positions. If you decide to groom internal successors, start developing those future leaders as soon as possible. The next generation of partners will need coaching and formal training, so consider lightening billing targets for senior partners so they can bring younger firm members into in more demanding engagements and client relationships.
In addition, your plan should cover:
- Mandatory retirement age
- Partner retirement agreements
- Retirement plan funding
- Compensation structure
- Accountability for adhering to policies and procedures.
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About the author
This article first appeared on our US sister site, AccountingWEB.com. Francesca Zelasko is director of accountant partner programs and partner marketing for SurePayroll and has more than 10 years’ marketing experience within the technology industry. She currently oversees the Accountant Channel for SurePayroll, which includes referral and reseller partners.