February 13, 2013
Turn a Profit From Succession Planning
I previously discussed the importance of succession planning for small businesses. According to Accounting Today, succession planning may also be positive for CPAs. The article suggests if CPAs consider the following options, they could turn a profit from the recent increase in succession planning.
- Evaluate product and service lines
- Cashflow management
- Use recurring models
- Add an annual valuation statement
- Develop a tax plan
- Offer personal wealth consulting
A CPA might help his client by separating and ranking what products and services the client is profiting from. This restructuring will help streamline products and services. CPAs can also show clients how to lower their working capital needs by creating a positive cash flow cycle. As a result, this increases the purchasing money the buyer has to buy the company. Using a recurring model is another way CPAs might profit from succession planning. Recurring models are ongoing services that people are willing to pay more for. This increases the value of your client's firm. A CPA might consider encouraging clients to add a valuation statement to their annual progress report. This can help them understand the factors that determine value. CPAs might want to consider offering to develop a tax plan that allows clients who have sold their business to maximize their after-tax proceeds. Last, CPAs can offer to manage a clients personal wealth created from the sale of his business.
See John Warrillow, Six Ways to Profit from the Succession Planning Boom, Accounting Today, Feb. 12, 2013.
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