Most entrepreneurs work long hours to provide for their family. The goal is not just to earn a salary today but to build something that will provide for their retirement and then hopefully leave an inheritance to their children. This requires planning by the owner early on. When the owner is looking to retire it is too late and they may leave money on the table because they are desperate to get their money out.

As the baby boomers retire they will be looking to pass along their businesses. The business must be converted to cash so it can be used for retirement by the owner. This is done by selling it to investors or to larger firms. Many private equity firms are bundling up smaller companies to get economies of scale.

The process is more difficult for professionals like CPAs and lawyers. It is rare to have contracts with clients and the most value they bring to the table is a client list. That is why the exit plan for many is to sell the practice to junior partners. This provides them with income for their retirement. Most owners don't want to be relying on others to keep the business profitable after they have left.

The AICPA surveyed their members to see what kind of succession planning they had done for their firms. As most businesses in this economy the respondents had spent most of their energy through the recession just trying to keep their firms profitable. As the economy improves it may be time to evaluate your business and start planning for a smooth exit.

As with anything in business the more prepared you can be the more value can be gained for the owner and the company after the succession. To start with do a business analysis. Be honest and identify the strengths, weaknesses, and opportunities of the firm. Some good questions are:

• Are too reliant on too few major clients? 
• Are your rates in line with other firms in your area?
• Do you have a unique specialty?
• Are there industries you have strong connections with?
• What is your percentage of individuals to business clients?

Think about how you would market the firm to potential buyers. Begin a plan to eliminate the weaknesses and focus on building up your strengths. You will need to sell a story of how your firm will benefit a larger organization. It should have value even without the partners.