Archive for the ‘Succession Planning’ Category

Monday, November 16th, 2020

Real Skills (Success Skills)

“Some people call these, “soft skills.” That’s because they’re not easy to measure. But for me, they’re real skills. The skills that actually determine how far we’ll go and how it will feel to work with us as we move forward.” – Seth Godin

For many years, in public accounting, we took note of the fact that many accountants dutifully achieved the expert category when it came to technical expertise.

Also, for many years we complained that we employed some very skilled managers but nearly all of them lacked “soft skills.” I like to call them “success skills” because to reach the level of partnership in the firm a candidate had to demonstrate the ability to network in the business community, be a great conversationalist, build relationships, be an adept speaker, manage people and develop personal leadership attributes. I like Godin’s term: Real Skills.

These skills, along with the technical skills, enable a CPA to bring in business to the firm. Some current partners have even developed these skills.

My friend, Guy Gage, @PartnersCoach, has developed the Partner-Pipeline® to assist firm partners to develop the “success skills” necessary to become true firm leaders.

From Guy Gage:

There are five “Contributions” that comprise high-performing partners: strong technical capability; client experience/client relations; new business development; capacity building (talent development), and leadership capability. While no one can be exceptional in all five areas, partner-candidates should be excellent in two and competent in the other three. Since firms have addressed the technical capability, I’ve developed a program that addresses the other four areas.

To learn more about the Partner Pipeline and to download a matrix outlining the program steps that are appropriate for each level in the firm. – Associate, Senior, Supervisor, Manager, and Senior Manager, click here.

It is important to begin the success skills training early in a person’s career so that the firm always has a vibrant and healthy partner pipeline.

  • Firms can only do so much, then it's up to the individual to choose to engage. Teach them HOW with programs and coaching.
  • Guy Gage

Friday, July 24th, 2020

Is It Time To Retire? – Flashback Friday

This week, for Flashback Friday, I have selected a post from February, this year. It was before the you-know-what hit the fan. Maybe retirement is now on your mind more than ever.

Here’s the post:

IS IT TIME TO ACTUALLY RETIRE?

In yesterday’s blog post I mentioned that I had recently re-read Tuesdays with Morrie.

One of Morrie’s wise sayings was:

“Don’t let go too soon, but don’t hang on too long.”

He was talking about life. To me, because I have worked with so many Baby Boomer CPAs over the years, it is something that applies to their retirement.

Many are in denial about retirement. They plan to work until they drop. Very short-sighted, indeed. There is so much more in life to experience if you wish it so.

Several situations I know about involve partners retiring but they do not quit working at the firm.

A couple of others involve 80-somethings continuing to come into the office even though they are not able to use the technology any longer.

My advice: Don’t hang on too long.

  • It's not too late to develop new friendships or reconnect with people.
  • Morrie Schwartz

Monday, October 8th, 2018

Partner Buy-Out & Retirement – Webinar

“Golf is played by twenty million mature American men whose wives think they are out having fun.” – Jim Bishop 

I get so many questions about what a partner buy-out and retirement should look like. Here’s an opportunity for you to learn about the current trends presented by Gary Adamson of Adamson Advisory via CPA Leadership Institute.

October 10, 2018 – 1:00 – 1:50 pm EST – Surviving Succession – Partner Buyout and Retirement.

If you’re like most firms, your partner agreements have not been reviewed or updated in a long time. That is dangerous given the succession issues in our profession today and the number of baby boomers retiring. I will discuss best practices and latest trends in how to value your practice, how to pay out the retiring partner, building your bench, and successful client transition to the next generation.

REGISTER HERE.

 

Wednesday, September 26th, 2018

Compensation & Succession

“Do your job and demand your compensation – but in that order.” – Cary Grant

Here’s a heads-up regarding two upcoming webinars sponsored by CPA Leadership Institute and presented by Gary Adamson of Adamson Advisory. These two topics are usually at the top of the list of partner issues.

Here’s the information regarding date, time and topic:

October 4, 2018 – 1:00 – 1:50 pm EST – Partner Compensation Methods and Trends Update
I will discuss the most common compensation systems in use today and provide my perspective as a former managing partner of a top 200 firm. I will help you determine what is right for your firm and how a firm evolves from one system to the next as it grows. I will also give you some tips on setting up a performance-based system in your firm and how to align your compensation system to your firm’s strategic plan.
October 10, 2018 – 1:00 – 1:50 pm EST – Surviving Succession – Partner Buyout and Retirement.
If you’re like most firms, your partner agreements have not been reviewed or updated in a long time. That is dangerous given the succession issues in our profession today and the number of baby boomers retiring. I will discuss best practices and latest trends in how to value your practice, how to pay out the retiring partner, building your bench, and successful client transition to the next generation.
  • Planning is bringing the future into the present so that you can do something about it now.
  • Alan Lakein, author

Wednesday, July 11th, 2018

Left Standing At The Altar

“Let the beauty of what you love be what you do.” – Rumi

Your accounting firm has several partners in their late 50s or early 60s. You don’t have enough young partners or future partners to take the firm into the future and still pay-out a significant amount of retirement dollars.

What do you do? The popular choice is to seek a larger firm to acquire your firm.

In a recent article for Accounting Today, Terry Putney and Joel Sinkin have shared ways to make your firm more attractive to acquirers. It used to be a seller’s market but it has now become a buyer’s market because so many smaller firms are looking for succession assistance.

A large firm is “looking at” your firm and another firm of similar size. The other firm has embraced technology and you are still not completely paperless. They choose the other firm and leave you standing at the altar.

Here are the Five Ways to Beautify Your Firm For M&A. Follow the link to read helpful descriptions about each of the five ways.

  1. Embracing technology
  2. “Brand” versus “partner” loyal
  3. Good clients and staff
  4. Niches
  5. Realistic terms

Thanks to Terry and Joel of Transition Advisors for this helpful information.

  • The future belongs to those who believe in the beauty of their dreams.
  • Eleanor Roosevelt

Thursday, May 24th, 2018

Bringing In New Partners

“The price of greatness is responsibility.” – Winston Churchill

Recently, Marc Rosenberg contributed an article to CPA Practice Advisor titled 7 Must-Haves for Accounting Firm Succession Plans. 

Rosenberg notes that 80% of first-generation firms never make it to the second generation because they have non-existent or ineffective succession plans.

If you want your firm to survive into the future, choosing the right partners is an important step. Often, owners make someone a partner without them truly understanding the expectations and responsibilities of a partner. Firms also often make someone a partner just because they don’t want them to leave the firm.

In his article, Rosenberg kindly shares his one-page list of criteria for promotion to partner. You can download it here. Be sure to read his entire article. Thanks for sharing, Marc.

  • Ninety-nine percent of all failures come from people who have a habit of making excuses.
  • George Washington Carver

Thursday, May 10th, 2018

Words of Wisdom from a Succession Planning Panel

“It is better to live rich than to die rich.” – Samuel Johnson

At the BDO Alliance conference, the Succession Planning panel was comprised of Marc Rosenberg, Jay Nisberg, Carl George and Bob Lewis. It’s important for you to keep tabs on current trends in the succession area and tweak your own plan as the years go by.

Daniel Hood, Editor of Accounting Today tweeted some great comments from the panel. I have selected a few for your contemplation.

  • Lewis: The first thing to do is look at the gaps – financial gap (can the successors support the retirees?), the talent gap (who can bring in work), the strategy gap (do you know where you want to be in 5 years?)
  • Nisberg: Too many Baby Boomers don’t see the people coming up behind them as having the same strengths they have. I assure you, they do – you just have to trust.
  • Rosenberg: Partners need to have a show-down meeting: When do they want to retire? What do they want from it? It’s a hugely emotional issue.
  • Nisberg: Vision is critical – highly successful firms have a vision that is the culmination of the will of the partners – where they want to go and how they want to get there.
  • Rosenberg: 80% of 1st generation CPA firms don’t make it to the second generation.
  • George: If you don’t put succession planning in partner goals and the compensation system, you will be stuck in the mud.
  • Lewis: It’s important that staff know there’s a succession in place.
  • George: A surprising number of firm leaders don’t understand the business of public accounting.
  • Lewis: In many firms, staff doesn’t understand firm revenue, the actual size of the firm. How can they operate in the dark?
  • George: Start teaching staff the business of public accounting on Day 1 – while you’re onboarding.
  • Rosenberg: Get everyone in the firm to understand how the firm works and how it makes money. That needs to happen at CPA firms. Partners are much too secretive.
  • Rosenberg: Staff doesn’t have a clue how much partners make – give them an idea because it’ll be higher than they expect.
  • Lewis: If a non-equity partner isn’t willing to convert to equity, then you don’t really have a partner.
  • Nisberg: I don’t understand why so many firms rush to M&A when there are so many other options.
  • George: I’m very happy to see more women than ever running firms — and they’re doing a great job.
  • Golf is played by twenty million mature American men whose wives think they are out having fun.
  • Jim Bishop

Tuesday, December 5th, 2017

Gender Study

“We realize the importance of our voices only when we are silenced.” – Malala Yousafzai

The AICPA Women’s Initiatives Executive Committee recently released the results of their 2nd annual CPA Firm Gender Study.

women-cpa-firms-gender-survey-768x493There has been little change. Women still make up less than one-quarter of partners in public accounting firms.

As usual, the smaller the firm, the more female partners.

Here’s some info from the Executive Summary but I urge you to review the entire report and share it among your partner group.

  • Partnership on average remains overwhelmingly male, with women representing only 22% of partners in CPA firms.
  • A growing percentage of women are serving as directors or non-equity partners.
  • Only 47% of firms have a formal succession planning process and only 2% include a formal gender component in their plans.
  • Flexible work hours are the most popular program, followed by reduced hours and telecommuting.

Women are key to succession for male partners. Make sure your firm is working on, or already has, a plan to help women (and men) to become future owners of your firm.

Here’s a link to the members of the AICPA Women’s Initiatives Executive Committee members. Maybe someone from your firm should volunteer for the committee.

  • Instead of looking at the past, I put myself ahead twenty years and try to look at what I need to do now in order to get there then.
  • Diana Ross

Thursday, August 10th, 2017

The 10 Most Profitable Industries

“Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn

It’s no surprise to CPA firm owners, but accounting and bookkeeping firms (along with real estate leasing companies and legal services) top the list of the most profitable industries over the last 12 months.

It’s nothing new, accounting has been at the top for several years, but I think sometimes CPA firm owners don’t think much about it, probably because they are used to the profit margins.

The information comes from Sageworks in its annual ranking of the most profitable industries in the U.S.

Most CPAs truly love the work they do. Sure, it involves some long hours, commitment and dedication to client service but being extremely profitable sure is a nice reward.

Share this information inside your firm. Perhaps it will inspire talented, young CPAs to go down the future partner track. Some partners don’t want to share this information because the staff will want bigger salaries. Maybe it is time to have that conversation inside your firm.

most-profitable-2017

 

  • Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.
  • Warren Buffett

Tuesday, August 8th, 2017

Warm & Fuzzy

“You cannot do a kindness too soon because you never know how soon it will be too late.” – Ralph Waldo Emerson

Many accounting firm owners/shareholders, in years gone by believed they were doing the right things.

  • We can get by with two monitors, no one needs three.
  • We need to stick with our professional dress code, our clients care.
  • Not everyone needs access to remote connectivity.
  • We don’t need to send more than one person to that management conference, they can come back and inform us all about what they learned.
  • We can just send one person to that leadership training, they can teach it at the firm.
  • It will be okay if we delay working on that succession plan until next year.
  • We don’t need to spend very much on Christmas gifts for the staff, they really don’t appreciate it anyway.
  • It is too hard to keep track of everyone’s birthdays, we don’t need to send a card to each person’s home.
  • It will hurt production if we close the office on Fridays in the summer.

Many partners called all of these things and other nice, little things they were expected to do for staff, “warm & fuzzy” stuff.

In the past, some of these did apply but they sure don’t now. Never be afraid to admit that you were wrong and make important changes that will guide your firm into the future.

  • We would all like a reputation for generosity and we'd all like to buy it cheap.
  • Mignon McLaughlin