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Are you the weakest link in your exit strategy?

15th Mar 2024
Brought to you by
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Are you running an accountancy practice? Or is it running you?

AVN helps you to take back control of your practice.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Don’t be the accountant that fails to bank their value.

Are you the weakest link in your exit strategy - AVN Inspiring Accountants - image of bank building
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Imagine you're a contestant on the iconic TV game show, The Weakest Link. The tension mounts as you and your fellow contestants pool together a substantial sum of money by answering a series of questions. Before the host fires the next question, you're faced with a crucial decision: to bank or not to bank? Banking secures what you've earned, but hesitating could mean losing it all with one wrong answer. 

This nerve-wracking scenario mirrors a significant challenge faced by accountants looking to exit their practice – knowing when to 'bank' the value.

A 2023 survey by AICPA/CIMA found that 44% of sole practitioners plan to retire in the next five years (reflecting the baby boomer generation beginning to exit the workplace). Of these, a staggering 28% planned to work until retirement then simply switch off the lights and walk away, turning all their time and effort to dust.

In multi-partner firms, 73% expected to face succession planning challenges in the near future (and more than 55% were already dealing with them). Despite this, 57% of the firms surveyed did not have a written and approved plan!

Critical timing in business exit strategy

Timing is everything when planning your exit strategy and it can take several years to fully prepare your practice. Acting too soon or too late means you won’t reap the full rewards for all your years of dedicated service. Just as in The Weakest Link, the key is to secure your hard-earned value at the right time.

Your accounting practice, like any business, has a peak value point. But many accountants misunderstand the optimal time to sell or restructure, leading them to miss their peak valuation period. As with the TV show, they hesitate to bank, only to lose everything on the next question.

The risk of waiting too long

Delaying the decision to bank your practice's value can have significant consequences. As your client base ages, market dynamics shift or the technology you use starts to look outdated, the value of your practice may begin to wane. Potential buyers will see more negatives than positives, reducing the chances of a sale.

Far too many businesses – including accountancy practices – go to market at the wrong time; and only 20% of those for sale actually end up with a buyer. 

An alternative to exiting: exiting without leaving

Exiting your practice doesn't necessarily mean stepping away completely. Shifting to a consultancy or part-time advisory role is increasingly popular for practice owners. And doing it this way is an opportunity to have the best of both worlds. You can maximise the value of your practice and at the same time, continue to play a rewarding and fulfilling role within the business. 

Whatever your exit strategy is, it’s vital to start planning as soon as possible – even if you want to carry on for another ten or twenty years. 

A guide through the exit maze

Like the contestants on The Weakest Link, you have to make timely decisions to secure the value you’ve accumulated in your businesses. Exiting at the right time doesn't mean leaving behind your legacy; it's about reshaping your involvement to suit your evolving personal and professional goals.

At AVN, we understand the intricacies of banking your value. We can help you navigate your exit options, whether it's finding the right buyer, enhancing your practice's value, or transitioning into a more fulfilling role within your business. Our expertise has helped countless accountants achieve a satisfying and profitable exit strategy.

We can help you to identify your practice's peak value, explore innovative exit strategies and guide you towards a successful and satisfying business transition. It all starts with a discovery call – book your call here.