Academic journal article Journal of Accountancy

Succession Planning: Are You an Operator or a Superstar? the Difference May Tell What Your Firm Is Worth, and Whether It Endures after You

Academic journal article Journal of Accountancy

Succession Planning: Are You an Operator or a Superstar? the Difference May Tell What Your Firm Is Worth, and Whether It Endures after You

Article excerpt

A satisfactory CPA firm succession is less about the legal agreements and more about the partnership's entire organization and business strategy.

Think of it this way: the more dependent a firm is on individuals rather than infrastructure, the more likely the transition will fail. For example, if you were sitting on a board of a public company, you would take hiring a new CEO very seriously. At the same time, you would not assume that the company was totally dependent on this individual's personal performance. A CEO's poor performance might result in less than the desired success, but the board would assume that the real assets of the business, such as its customer base, employees, products or services, marketing programs, and quality control processes, would drive the company's future.

In the final analysis, all firms share big picture issues, such as:

* Getting a fair return on payroll investment

* Maximizing personal income within the parameters of firm members' desired work/life balance

* Increasing the value of the largest asset most partners have--their interest in the firm

* Attracting the best and brightest people in order to develop the firm's future leaders

* Feeling that they are making a difference to the clients they serve

* Enjoying the people they work with while building a firm that they are proud to be a part of

* Being able to decide how they want to spend their limited time

Two concepts are fundamental to my discussion of succession: First, there are two basic models used to build a firm, namely, the superstar model and the operator model. …

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