Most practice owners don’t plan to leave their firm tomorrow. But waiting too long to start planning for succession? That’s where the trouble begins.
When you’ve spent years - decades, even - building a successful accounting or financial planning firm, it’s easy to fall into the trap of thinking you’ll just know when it’s time to pass the baton. After all, you’ve built a thriving business, loyal client relationships, and a team that runs like clockwork. Why rock the boat now?
The reality is that succession isn’t a single decision — it’s a process. And if you leave it too late, you risk undermining the very legacy you’ve worked so hard to build. Succession planning is not just about exit.
It’s about control.
There’s a big difference between being ready to retire and having a succession plan in place. A strong succession plan allows you to:
- Choose the right successor or buyer (rather than being backed into a corner)
- Maximise your valuation while your firm is still at its peak
- Gradually reduce your involvement on your terms
- Protect your staff, clients and culture through a smooth handover
- Maintain flexibility in case life throws up surprises
Without a plan, you’re at the mercy of timing - and the market.
What waiting too long actually costs you
Here’s what we see time and again with firms that delay succession planning:
- Diminishing valuation: A slow decline in energy, innovation, or responsiveness often results in flat or falling profitability. Buyers notice.
- Limited buyer pool: Many top-tier buyers — especially younger equity partners or progressive firms — want a longer lead time for onboarding and succession. If you’re out in 3 months, they’re out.
- Staff instability: Your team starts to sense uncertainty, and key talent may look elsewhere.
- Stressful exits: Forced sales, rushed transitions, or last-minute restructures rarely go well. They’re disruptive, emotionally taxing, and value-destroying.
A better way: The Succession Runway
In our experience, the sweet spot for planning and executing a successful exit or equity transition is between 18 months and 3 years. Here’s why:
- It typically takes 4 to 6 months to prepare, market and sell a firm, particularly if you want to attract a premium buyer, not just the first one to knock.
- Following the sale most principals transition over 9 to 12 months, often in a reduced capacity, to maintain client and team continuity.
- This means you need at least 18 months (or longer, ideally) to execute a proper succession to maximise options, valuation and cultural fit.
With that runway, you can stabilise earnings, prepare your team, and explore the right buyer or equity partner without pressure. It’s about staying in control, not scrambling in response.
Case in point: Two similar firms, two very different outcomes
Case A: A $1.2M suburban accounting practice reached out to us three years before the founder wanted to step back. We helped them explore both internal succession and external equity options, eventually securing a strategic merger with a like-minded firm that allowed the founder to reduce to 2 days a week within 18 months - while maintaining equity and income.
Case B: Another practice, similar in size and location, contacted us after the principal had already suffered a health scare and wanted out within 60 days. The result? A fire-sale environment with fewer interested buyers, less leverage in negotiations, and significant downward pressure on valuation.
A Final Thought
Succession isn’t just a technical process — it’s an emotional one. Succession can be confronting. Your firm may feel like an extension of your identity. Letting go, even partially, stirs up all sorts of emotions - uncertainty, pride, even grief.
That’s precisely why planning early is so critical. It gives you space to approach the process thoughtfully, not reactively.
Start while you’re strong. The best time to plan your succession is when things are going well - not when your energy, your health, or the market is on the decline. Start now, and you’ll give yourself the ultimate luxury: choice.
Want to explore what a well-timed succession plan could look like for your firm? Ready to take control of your succession plan? If you're starting to think about succession - even if you're years away from retiring - now is the time to start the conversation.
At Practice Exchange we specialise in helping firm owners structure deals that work not just on paper, but in practice. Whether you're looking to step back gradually, explore equity partner options, or prepare for a full exit, we can help you map out a clear, confident path forward.
Schedule a confidential call with Mark Witt CA via Calendly
Call 1300 722 452
Email mark@practiceexchange.com.au
Or browse our latest Practice Exchange listings
Don’t leave it too late. Start the conversation while you’re still in control.
