As demonstrated in Bstar’s 2015 Accountants Research Report, accountants have a medium to high degree of understanding in relation to practice growth and succession planning.
With 78% of accountants surveyed being in the “growing to going” phase of their firm’s lifecycle, growth and succession planning are big issues they must face head on. Furthermore, up to 94% of accountants surveyed rated growth planning as being important to their practice, up 18% this year from 2014.
The report also found 55% of accountants surveyed had a detailed growth plan.
It revealed the most commonly selected growth plan was “to adopt technology and/or outsourcing to create efficiencies and diversify revenues with more coaching/advisory work”.
Keeping your in-house policies and procedures simple when adopting technology will make for a smooth transition, as will a gradual progression to more proactive advice services, such as wealth management.
Vision and Growth
When it comes to vision and growth, once the current owners and the directors of the firm are aligned, it’s about creating an inclusive culture to empower the team to help fulfil their vision.
It’s up to the current owners, and the next generation, who are the typical succession plan. The next generation, and even non-traditional equity investors, are not likely to buy into a static, regressive, last generation firm or business that doesn’t have a clear plan for growth.
All investors, internal or external, including the next generation want to buy equity in a firm that means something, does something different and that adds value for clients and has a plan to deliver on that, plus provides a good and ever increasing return on investment.
Succession planning (management and ownership) made the top three highest increases in business concerns, moving from the 11th to the 6th place between 2014-15, the Bstar 2015 Accountants Research Report showed. Up to 44 per cent of accountants considered succession planning important to their business from “now to one year”.
Partners approaching succession and retirement are ready to take action about the future performance and value of their practice. Valuation involves discussing margins, growth, succession planning, additional services and efficiency, which are underpinned by technology, all wrapped up in the business plan and strategy.
For partners and principals who are about to retire, the risk that their practice value will decline might be the catalyst to bring forward their succession plans.
As a firm, Prime is working nationally with many accounting firms to define their business goals, extend service lines and inject equity capital to enable growth and structured succession planning. We strongly believe in the future of accounting, advisory and wealth management services for a complete client service. We are actively investing in that future.
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