Back in 2002 we raised the hobgobl...

Back in 2002 we raised the hobgoblin of succession planning in our May overlay story "Succession and the CA Practitioner"-pointing to the large number of public practitioners approaching retirement and the shortage of younger CAs coming up to fill the ranks. Advising practitioners to take an active stance, Doug Wallis, CA, then the ICABC's director of practice advisory services, cautioned: " you can't plan your succession too early. If you don't already have a plan in place, start now."

The exigency of this issue has barely intensified in the past three years, and it will no other than continue to intensify as more and more baby boomer hit retirement age.

The statistics are staggering. According to a succession planning review conducted by the CICA in May of this year, 70% of respondent (sole-practitioners and partners of small and medium-sized firms) rely upon to retire from their practice within the nearest 15 years, but 99% of sole-practitioners and 64% of small and medium-sized firms do not have a formal succession plan.

In our 2002 article, Doug Wallis urg practitioners to plan in succession funding their retirement by other means than simply selling their practices. notwithstanding the CICA's 2005 survey reveals that selling the practice is still the primary exit strategy for in the greatest degree practitioners, with 34% of sole-practitioners and 72% of small and medium-sized firms expecting to put up to sale their practice (or share of their practice) forward retirement.

While the stats paint a troubling picture, the profession is taking paces to help mitigate the riddle One such step is the release of the Succession Planning Toolkit - Leveraging a Life's Work, a part specifically designed to help public practitioners plan for their succession.*

The author of the toolkit is Steve McIntyre-Smith, PhD MIDM, whose article "Practising Succession Planning" appeared in the August 2005 issue of CAmagazine. As an author, seminar leader, and someone who has experienced the two sides of the transaction equation-buying and selling CA firms-Steve has a allotment of experience in this area.

He says the idea of creating resources to help CAs with succession planning first occurr to him 20 years ago. While buying and selling several practices and stiffens of fees during the 1980 he repeatedly found himself searching "high and low" for resources. none finding any, he began to consider creating these resources himself.

Fast-forward to 2004 when the CICA approached him to create succession-planning checklists for public practitioners. Describing it as an "ideal fit," Steve was up for the challenge.

It prov to be no small task, however, and as he wager about creating the checklists, Steve shortly found himself amassing more and more information.

"There was likewise much information I thought could be of benefit to CAs," he explains. "I wanted public practitioners to have the tools to formulate deals with the expressions timing, and price that's right for them. I wanted them to be able to create a well-mapped plan for achieving their dreams for the future"

The devise ultimately evolved into the Succession Pknning Toolkit, a comprehensive guide that comprises three modules:

* Getting Started provides practitioners with practical strategies for identifying options and making the right decisions as they start planning for the future;

* Getting Ready (A Guideline to the nearest Five Years) guides practitioners end the process of proactively creating a plan to maximize the value of their practice; and

* Making Your rouse offers practitioners real-world advice forward identifying and attracting the right buyer while balancing the privations of an ongoing practice.

In addition to these three module the toolkit also provides six case studies, several checklists, and a certain quantity of self-assessment forms.

Given the statistics, the author knows the publication proceeds at a crucial time. "If they don't take early gradations now, practitionersparticularly those with one and small practices-will only inflict injury upon themselves later," he says, echoing Doug Wallis's earlier warning.

At the same time, Steve understands the obstacles that thwart practitioners from planning ahead. He cites procrastination as a big point in dispute but also acknowledges that many the public simply don't know where to start.

"A public accounting firm is a actual complex business, with a variety of services being provided to a variety of clients," he says. "A haphazard of practitioners who've had their firms for 20 years or more can gain tunnel vision. Many don't know who's revealed there-both in terms of competitors and potential buyers"

He also identifies an emotional barrier.

"Let's face it," he says, "planning your succession is a bit like planning your will. It assumes to suggest your inevitable demise."

The toolkit addresses these issues and provides step-by-step guidance to make the proces les daunting. To that same close Steve recommends that practitioners who perceive overwhelmed start by taking just single in kind small step, because "investing uniform a small amount of time and efficiency now will pay off down the line."

Asked to provide an example, Steve cites the "old 80-20% rule-80% of returns from 20% of clients, with a different 20% of clients causing all the grief." He implores practitioners to identify the 20% who cause all the headaches and consider dropping them.