Practice owners need to think about potential buyers when planning their business strategy
There is a lot of talk around succession planning for accounting and advice firms. Our first round of results from our business valuation tool demonstrate that valuation results are changing as business models change in line with FOFA reform.
As everyone reviews their strategy and looks at the way forward in the new regime, it is more important than ever to have the end in sight – no matter whether that end is five or 20 years away. Why? Because without knowing your desired outcome, you can’t build your strategy path to get there.
There are so many choices to make in owning a business today. We have watched Sam making decisions around his business – should he franchise, specialise, or offer key staff equity? All these decisions can change the nature of his business, and his final result. Stay tuned for judgement day to see which way he goes.
One thing I have learned from working with so many practice owners is that it is good to be honest with yourself and ask – what is the key driver for you in planning your succession?
Many wealth businesses are family owned, and are built to hand down to the next generation. Some are partnerships where one partner will buy the other out, while others are counting on their licensee becoming their buyer of last resort.
It is worthwhile asking yourself what is the best way for you to build a succession strategy. Does it involve leaving behind key staff to run your business, or like Jim Taggart, integrating into a larger business? You will have seen Jim go through mentoring advice around making a plan for himself even post-sale – as it is always better to be looking forward and striving for a goal and destination.
Business buyers like Barry Lambert believe that the best business owners identify their potential purchasers very early on, and then go about making their business just the thing that potential purchaser needs.
So as you go about making decisions on your business strategy post-FOFA, perhaps the biggest question you should ask yourself is: who is my buyer if I put this strategy in place?
It could just be the question that gives you the clarity and direction to realise your practice potential.
As always, we love hearing your thoughts and challenges – please let us know what you are working on and how we can help.
You can follow Vanessa on Twitter: @ceovanessa
