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advocacy community education
Succession Plan Options
While the CSCPA survey respondents
indicated that transitioning to someone
within the existing firm is the preferred
method for succession planning, firm
owners have several other options.
Mergers and acquisitions are becom-
ing an important succession option.
Larger firms are absorbing smaller
firms and similar firms are merging
resources. Information about opportu-
nities are increasingly available to firm
owners through direct mail solicitation,
advertising in CPA publications, and
the new
website offered by the CSCPA
[Editor's note: see page 12 for more
For those owners who choose to transi-
tion the firm to another professional
within the firm, training programs for
long-term leadership development and
strategies for mentoring emerging lead-
ers can help guide the process.
Grooming successors is an active
process that involves both the retiring
firm leader and the emerging leader.
One of the keys to a successful transi-
tion is insuring that there is enough time
to develop the new leader and foster a
collaborative and trusting relationship
between the new leader and the clients.
While closing the doors and walking
away may be an alternative for some
professionals who do not rely on repeat
engagements, it may be the option of
last resort for firm owners failing to plan
for succession. Retiring on short notice
limits the opportunities and may result
in little or no value received for the firm.
Often, with this method, clients and
employees must make alternative
arrangements without the benefit of a
smooth transition.
The Importance of Firm
Succession Planning
The uncertainty about which succes-
sion approach to take has resulted in
the failure of many firm owners to take
the first steps in developing a plan. It is
important to understand that firm suc-
cession planning is not simply an exit
strategy for the owner. While one of the
major goals of the plan is the maxi-
mization of the return on investment to
help fund retirement, firm owners also
have a responsibility to the clients and
the firm employees.
As the firm owners approach retire-
ment age, the lack of planning can
undermine the confidence that both
clients and employees have that the
CPA firm will continue to take care of
them. This uncertainty may cause
clients, employees, or possibly other
partners to leave the firm and potential
new clients to look elsewhere. The
result is a diminished firm that has less
value. In addition, having an estab-
lished plan can provide the owner with
the professional satisfaction that they
have provided well for themselves and
their family, as well as the firm's clients
and employees.
Succession Planning is More Than
Retirement Planning
Many people think that succession
planning is merely a retirement issue
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