Don’t Play the Waiting Game!

Last week I was privileged to teach a class on succession for one of the major software vendors to the accounting profession. The session like most everything in the era of COVID-19 was held virtually – a major disappointment because the annual three-day confab was initially scheduled to be held in Florida – which would have been a welcome respite to what is heretofore been a bit of a frosty fall in the Northeast.

You don’t need to enroll in a CPE class to know that we are living in unprecedented times – the coronavirus has impacted every facet of daily life and its eventual effect on the economy may yet far exceed that of the Great Depression of the 1930s.

As is customary the webinar provided a Q&A box for attendees who were certainly not hesitant to pepper me with questions – particularly those related to succession planning amidst the pandemic.

But perhaps the question that really drew my attention was when one participant wanted to know if they should be doing anything differently regarding succession in the face of the national crises. Should we be putting it off?

I thought about that for a moment and in an oversimplification, I quickly answered “no.”

And basically, that was my response.

Prior to the pandemic, too many firms were already guilty of what I liked to call “succession procrastination,” regularly tabling an issue that so badly needed to be addressed sooner rather than later. Now my fear was COVID-19 was the excuse to stage an even greater retreat from what was critical to the near and long-term success of CPA firms.

In fact, I told the attendee that if anything, succession planning should even begin earlier than usual. Traditionally we urge our clients that ideally succession is something they should be thinking about 5-7 years down the road.

Far too many decide to trim that timeline by half or even a third and then find themselves painted into a corner when valuations begin dropping and the inventory of sellers begins to balloon making it a true buyer’s market.

Wearing a protective mask and practicing safe social distancing is not a panacea for succession procrastination – if anything it should serve as a wake-up call for aging practitioners that they just may not want to deal with a similar situation ever again.

There is an old proverb that states he who hesitates is lost. And in 20 years covering or consulting to the profession I have never witnessed anything to refute that.