By Jennifer Rieman, CAE, OSCPA manager, public relations
A new report from The CPA Consultants Alliance (CPACA) should serve as a wake-up call to firm leaders who have procrastinated on succession issues. So says Gary Adamson, CPA, CEO of Adamson Advisory, a CPA practice management consulting firm and member of the CPACA, a group of management consultants serving the CPA profession.
“If it were easy, everyone would be doing it,” Adamson said. “It’s difficult. A lot of work in my practice is helping firms trying to figure out how to survive.”
The survey results are striking. More than half of the 337 respondents from small, medium and large firms said procrastination or denial is the primary reason firms struggle with succession planning. Of firms with fewer than 25 employees, only 19.9% have a system in place to identify future partners, while in firms with 25 or more employees, 47.8% have a plan.
“A lot of the smaller firms, their idea of what they’re going to do it is sell out,” Adamson said. “The problem is, there are going to be so many firms for sale, particularly sole practitioners that are looking to sell, that it’s really going to change the dynamics of the market. Right now pretty much anyone can sell their practice, but I think we’re getting close to the day when it’s going to be a buyer’s market. There will be a lot of smaller firms that don’t find buyers.”
Adamson advises firms that wish to stay independent to focus on three things: recruiting, leadership development and inclusion.
“Firms have to be hiring all of the time,” he said. “What that does is constantly fill the pipeline with new people. Then they can see more talent and replace people more quickly.
“The biggest single takeaway is to step back and look at your practice and start working on it now,” he said. “Don’t procrastinate. Because that’s what we tend to do; we tend to revert to the familiar. This stuff is hard. But the sooner firms address it, the better off they’re going to be.”
Take a deep dive into succession issues with Gary’s video series for OSCPA Spotlight.
The Succession Institute offers OSCPA members discounted access to succession planning and practice management resources. Learn more.