Today's Features
PRO Member Exclusive

Help! A Partner Wants to Retire Really Early

six shocked coworkers

How big should the buyout be?

By Marc Rosenberg
The Rosenberg Practice Management Library

Question from a reader: We didn’t contemplate an owner leaving before normal retirement age unless it was because of death or disability or we had to fire them. However, as we were discussing hypotheticals at a recent partner meeting, we came to the uncomfortable conclusion that, currently, there’s nothing to stop owners from accumulating large buyout balances and just walking in one day and offering up their resignation pursuant to our partner agreement, thus entitling them to receive substantial buyouts as long as they give us a one-year notice. Our vesting provision has a very limited penalty for early retirement: the buyout is reduced by 2 percent a year for every year before 60 they leave.

MORE: Thirteen Traits of Partners You’ll Want to Keep | Six Rules for Keeping Partners Happy and Productive | Five Ways to Separate Accounting Winners from Losers | Core Values: Why Your Firm Needs Them | Voting on Ownership Basis? Three Better Methods | Fifteen Big Questions for Your Next Strategy Session
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No matter what, we need to modify our agreement so that if someone wants to leave early, they can do so, but they must know there will be a stiff penalty. We don’t want our partners to see their vested buyouts as large savings accounts that can be withdrawn at any time. Instead, we want them to see our buyout as a true retirement plan, one that is redeemed close to or at a normal retirement age. My current thinking is that we restrict it in a similar way to an employer-funded retirement plan. The first day you can withdraw is the day you reach 55½, subject to vesting provisions and stiff penalties for early withdrawal. We think there should be a minimum number of years as a partner in order to receive any buyout.
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MANAGEMENT

Firm Not Thriving? Five Fixes

Plant seedlings growing out of coin stacks , both increasing in size

Taking steps “little and often” works, but you have to get started.

By Martin Bissett
Passport to Partnership

A big concern in recent years has been how the incoming partners will purchase equity or fund the capital account and exit of a retiring partner.

Much has been written that examines the mathematical complexities of this topic but the bottom line is simple. Would-be partners in the age demographic of 28-42 are part of a generation who are already heavily borrowed in the form of credit card debt, mortgage debt and other forms of personal loans.

MORE: Five Questions About Facing Challenges | The Real Math Behind the Sales Pipeline | Keep Business Development Going During Busy Season | Walk the Commitment Walk | Two Steps Toward Mastering Selling | Thirteen Ways to Show Commitment | Clients Can’t Grow without You | Seven Mistakes in Winning New Fees | How to Develop Your Communication Abilities | Five Questions for Measuring Partner Potential
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Their capacity to borrow in the current economy is extremely limited and it would appear that this will be the environment for the foreseeable future. In turn, banks’ willingness to lend has also been largely withdrawn in recent years.

This has produced a cash impasse that has forced partners to consider gifting equity, especially on the basis of time served in the firm. There is not scope within this piece to give full examination of best practice within this area except to highlight that 72 percent of partners surveyed highlighted that a senior manager’s ability to “buy in” to the firm and assume responsibility for funding the retirement plans of exiting partners was among their top three concerns about passing their practice on to existing employees.
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PRO Member Exclusive

AI Named the Highest-Paying In-Demand Tech Skill for 2024

Are your skills up to snuff? 

By Rick Richardson
Technology This Week

According to a January 2024 Deloitte study of 100 business executives, nearly half, or 45 percent, of high-level executives indicate they are aggressively upskilling and training their work force in artificial intelligence. Approximately the same percentage, 44 percent, state they are hiring for it.

MORE: AI Generates Revolutionary New Battery Design | ChatGPT Is Getting Humanlike Memory | Lenovo Readies New ThinkBook Laptop with a Transparent Display | Breakthrough Implant Uses Excess Blood Sugar to Generate Electricity | One State Is Now America’s Clean Energy Paradise | Microsoft Moves Further into Nuclear Development with New Director | Nuclear Battery Could Keep Your Future Phone Running for 50 Years | Did Ancient Romans Find a Solution for Climate Change? | Tack One Launches New Location Tracker for Children and Seniors
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Therefore, it should not be shocking that generative AI ranks first among the highest-paid IT skills. This is supported by a recent study from the job search firm Indeed, which determined that computer abilities have the largest impact on pay. According to Indeed, a job’s salary was 47 percent higher when generative AI was listed as a required talent.
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MANAGEMENT

Busy Season Is Over, So It’s Time for Some Resolutions

Twelve things to do before you get busy again.

EDITOR’S NOTE: The end of every busy season means a new beginning for practitioners, which is why we thought this Q-and-A was particularly timely.

By Ed Mendlowitz
202 Questions and Answers: Managing an Accounting Practice

Question: Do you have any suggestions for the New Year?

MORE: Hold Staff Accountable If You Want Them to Listen to You | When Selling a Firm to Staffers Is Tricky | Courting a Client? Don’t Give Too Much Away for Free | Nine Tips for a Healthier Tax Season | Fifteen Strategies for First-Time Supervisors | Measure Knowledge Gaps (Then Close Them) | Should You Offer Financial Services? | Ready to Retire? Selling Your Practice Is No Strategy | 20 Things You Need for a Business Valuation
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Answer: Checklist of things to do in the New Year:

  1. Stop marking SALY next to your New Year’s resolutions. Make one or two big-time life goals resolutions that you will do.
  2. Check your personal insurance coverage. Make sure you have adequate uninsured motorist, umbrella, workers compensation at your home and life insurance.

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MARKETING & SALES

Dodge the Four Curses of a Production Orientation

BONUS: An illustration using two firms, one oriented to both production and marketing.

By August J. Aquila
Price It Right: How to Value Accounting Services

An emphasis on production (billable hours) can have negative consequences for an accounting firm. An emphasis on billable hours causes professionals to focus on internal measurements, i.e., the number of hours charged to a client, and not external measurements such as client satisfaction.

MORE: Clients Buy Solutions, Not Features | Six Ways to Expand Your Client Services Checklist | Ten Questions to Refine Your Successful Marketing Plan | Four Questions for Choosing Your Marketing Audit Strategies | Four Steps to a Successful Email Marketing Campaign | Five Reasons to Implement Change Orders | Make Your Practice Better | Eleven Marketing Strategies for Smaller Firms
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It also emphasizes the technical aspect of accounting work and keeps professionals from developing a marketing mindset. Let’s look at the four negative consequences of a production orientation.
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MARKETING & SALES

Do You Want More Publicity? Or BETTER Publicity?

letter blocks with middle section rotating to change word from "quantity" to "quality"

Determine the reason you want it in the first place.

By Bruce Marcus
Professional Services Marketing 3.0

EDITOR’S NOTE: CPA Trendlines was privileged to have a long relationship with Bruce W. Marcus, who was ahead of his time in his thinking and practice in marketing for accounting. We are publishing some of the late expert’s evergreen work, which retains wisdom for the present.

In the early days of publicity, when it was low-down press agentry and not high-blown public relations, the idea was to get your client’s name in the paper. Often. In any context. Just spell it right.

MORE: How to Write Media Releases That Capture an Editor’s Attention | Nine Ways to Choose Your PR Person | When There’s a Leak in Your Firm | Eighteen Things Advertising Can Do for Your Firm | How and Why Client Service Teams Work | Manage Knowledge as a Marketing Tool | Secret Marketing Formula: Get One Client at a Time | Marketing a Fixed Position in a Moving World | How to Build a Marketing Culture
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In the early days of marketing professional services, it became clear that merely to get your firm’s name in the paper, in any context, didn’t help much. Ego, maybe, but nothing more. A new approach to publicity had to be developed.
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ABOUT US

Bissett Bullet: Make It a ‘No Brainer’

Today’s Bissett Bullet: “The best way to talk about price is in terms of what they’re paying already.”

By Martin Bissett

When you talk to clients (or potential clients) about the price you want them to pay, minimize the impact for them. First, take your proposed annual fee and divide it by 12 to give them a monthly price. Then, look at what they pay already and only talk to them about the increase on what they already pay (if any) rather than the amount in full.

Today’s To-Do:

Take out the last proposal you wrote that was unsuccessful, take the price you quoted that client and minimize it as above. What difference could it have made to their mindset if they were presented with only the increase on their monthly fee?

See more Bissett Bullets here

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MARKETING & SALES

Twelve Ways Your Business Card Can Hurt You

Confident businesswoman handing man a business card in networking session

Does your card tell your prospect what to do next?

By Sandi Leyva
The Complete Guide to Marketing for Tax & Accounting Firms

The lowly business card: We don’t give it a second thought before we get the thing printed up, and we just do what everyone else does.

MORE: How to Use ChatGPT to Create Images | How to Leverage ChatGPT During This Crazy Tax Season | Eight Steps to Getting Started with AI: A Guide for Tax Professionals | You Don’t Have a Time Problem | Three Money Leaks and How to Plug Them | Eleven Ways to Serve Clients Even Better | Make Your Prospect Kit Stand Out | Six Ways to Beat the Competition | Grow Your Revenue with Three Marketing Strategies
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Many people, new in business, get the business cards printed before they’re really ready to, which causes many of the mistakes I list below. Experienced or new, you’re missing huge opportunities to let your business card take some of the work off your shoulders. We may take it for granted, but I feel that your business card is one of your most important pieces of marketing collateral – and the most underutilized.
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