There’s a difference between deciding to sell and being ready to sell, and most of what determines your outcome happens in the gap between the two.

By the time a practice goes to market, the price is largely already set. Not by the broker, not by the negotiation, but by decisions made or not made two and three years earlier. Around 60% of businesses expect a partner to retire within five years (Accountants Daily / NAB), and yet most firms still don’t have an active plan.

Here are the succession mistakes that cost the most.

Treating succession as an event rather than a process

Succession isn’t a decision you make once. It’s a sequence of changes to how the practice operates, most of which take years to bed in.

Industry guidance consistently recommends beginning five years or more ahead of a planned transition (BOZ). Some advisers put the realistic timeframe at eighteen months to three years. Either way, it’s measured in years.

Waiting until retirement almost always results in lower valuations and fewer options; the equivalent of listing a property with two weeks of marketing.

Not having a documented plan at all

Under APES 325, documenting a succession plan is a mandatory risk requirement for firms in public practice (The Access Group). Plenty of principals who advise clients on exactly this have never done it for themselves.

There’s also a real commercial cost. The ATO has urged private group owners to undertake succession planning specifically because poor planning creates unintended tax consequences, and groups without documented plans or supporting documentation sit at materially higher risk (Accountants Daily).

A plan doesn’t commit you to leaving. It just means the practice survives if something unexpected happens, and that a buyer can see how the transition would work.

Building the whole practice around yourself

This is the same finding that dominates practice valuations, and it originates in succession decisions.

Every year that you remain the person clients call, the person who signs everything, and the person who attends every meaningful meeting, you make the practice slightly harder to sell and slightly cheaper to buy. The rule of thumb is clear: if you can demonstrate the revenue continues without you, you get the top of the range.

The fix is unglamorous and slow. Introduce a second name into every significant relationship. Have a manager lead the annual meeting rather than attend it. Change who signs the correspondence. None of it happens in six months.

No generational spread in the team

Excluding the largest firms, only around 20% of public practices have sufficient equity partners coming through to ensure continuity (CPA Australia).

If there’s nobody behind you, you’ve eliminated an entire category of exit, the internal transition, and made yourself dependent on the external market. You’ve also made the practice riskier to an external buyer, because they’re acquiring a team with no succession depth of its own.

Consider locking in key people with equity stakes well ahead of time, starting small at 5 to 10% with incremental increases. It costs you something. It costs less than the alternative.

Letting the client base age alongside you

Long client tenure proves retention, which buyers value. But a fee base where most clients are winding down within five years is a declining asset, and it’s priced as one.

You don’t need a marketing campaign. You need visible evidence of momentum. A modest but steady flow of new clients over the previous two years reframes the practice from “winding down” to “stable”, and that reframing alone is worth real cents in the dollar.

Assuming the internal successor will happen by itself

Promoting from within genuinely does offer the smoothest transition. The successor already understands the business and has the client relationships. But it needs to be actively built, and it needs honesty about whether the candidate can fund it.

Many internal successions fail not on capability but on finance, discovered at the last minute. Have the funding conversation early. And accept that a gradual internal transfer will rarely realise the maximum lump sum an external sale might. As one adviser puts it, don’t let price get in the way of succession. It’s often better to accumulate wealth outside the practice than to hold out for a number that prevents the transition happening at all (CPA Australia).

Not preparing for the unplanned exit

Illness, injury or death before retirement is the succession scenario nobody plans for and everybody should.

The essentials: a current will with clear terms for the practice, a power of attorney, instructions for how client and staff needs would be managed, key person and disability cover, and for sole practitioners, a standing arrangement with another practitioner who can step in (CPA Australia). Make sure someone other than you can access the practice systems.

Reviewing it once and filing it

Succession planning is dynamic. Review the plan every six months. Firms change, people leave, the market moves, and a plan written four years ago for a team that no longer exists isn’t a plan.

Start with where you actually are

The Practice Value & Readiness Scorecard is a ten-minute self-assessment across the nine factors buyers assess. It gives you an indicative value range and, more usefully, shows you which two things are holding it back — which is exactly the input a succession plan needs.

Free, confidential, and no details about your firm required.

Get the Practice Value & Readiness Scorecard

General information only — not financial, legal or valuation advice.