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To give you a flavor, 14 percent of the sole practitioners responding indicate that they have current succession planning challenges, 18 percent say they will have succession planning challenges in the next one to two years, and one-third report they will have succession planning challenges in the next three to five years.
Four out of ten sole proprietors indicate that they plan to sell their practices at retirement to maximize the value of their investments A little less than a third (31 percent) plan to transition their books of business internally, either to existing colleagues or to incoming owners. One in 10 will treat their firm as a wasting asset, gradually diminishing the size of the practice, their involvement in it, and their annual income from it. A surprising number of only nine percent of sole practitioners have practice continuation agreements in place.
What I like about the survey write-up are the observations made throughout, including the inclusion in a practice continuation agreement of a buy-back of the practice should a disability heal, or the delineation of quality controls during a short-term disability to ensure client retention, as well as specified plans for existing employees.
More needs to be written about the issues that sole practitioners face, and just as important, sole practitioners should pay more attention to succession and, in turn, executing a plan so it can be accomplished. This survey is a great starting point.
