The way ahead for your Practice
There is no question that the profession is going to go through some profound changes over the next few years. I don’t know how many times I have said this, but baby boomers are going to cause considerable alterations to the accountancy profession due with so many of you coming up to retirement. Unfortunately in some cases retirement is not an option due to the lack of funding for a lifetime pension, but for many it certainly is an option or, in some cases with many practices, compulsory. There are retirement ages set into many practice that will ensure that we lose a lot of my old clients over the next few years.
The difficulties faced by many practitioners can be generally summed up in a small number of ways. First of all, of course, there is the issue of age. Nobody grows younger! There comes a point where age or ill health will necessitate the retirement of a practitioner, if not already forces out by a partnership agreement. Mitigating the impact of retirement is of course the way to approach the issues. We have something in excess of 5,500 firms in the ICAEW area, but more than half of those have little or no survival capacity. The big issue (if you don’t end up selling it) is around succession within a practice. Very few mid turnover practices have this in place. There are some lucky ones where family have joined the practice and help to achieve continuity, but they are quite small in number. The second issue has been in our training of youngsters coming through to take over from us in due course. We have rather been control freaks, and the end result is that we carry on doing everything and keep in control of everything, and not allowing the youngsters to come through and commit the mistakes that are inevitable. We try to avoid them doing that and in so doing have stopped their natural growth. There are few of us that have not made mistakes in the past, many of which we can still blush about, but we learnt by those mistakes and moved on. Sadly, most of us only ever learn anything by the things we do wrong, rather than the things we do right. Not only are the youngsters not trained well enough to look after clients and run a business, they don’t have the funds either, generally speaking, to undertake the opportunity. There also seems to be a lack of desire. The end result will be that many practices will need to merge or be acquired by their bigger brethren, this can either be a larger practice, a national practice, or even groups of practices that are growing rapidly. Sole practitioners of course have their own issues and we have found ways of helping practices to move on and achieve, in many cases, ongoing income as well as capital values guaranteed.
From conversations I have had recently it would appear that Goldsmith Practice Services Limited are seen as just a merger and acquisition business. We are not. We are practice advisory services that happens to be one of the biggest movers and shakers in the merger and acquisition business by pure accident. It is a requirement of the consultancy service to look at those opportunities that may exist for a practice, either to move itself onwards by being merged or acquired or actually be the acquirer. There are also of course other opportunities such as external investment, or which there are a number around at this time. One or two are worth looking at. Several I don’t think are. But it is probably a good moment to think about your own future. A visit to your practice for discussion is confidential and, of course, free!
When you are ready to take that first difficult step, give us a call. Send us an email. You can even try carrier pigeon.