"I didn’t think about succession planning when I first started my practice" says Kamlesh. "I had a business plan and was full of adrenaline to become a practice owner. Sometimes our dreams and our motivation drives us to do crazy things and it didn’t occur to me to recruit clients before starting my practice, so I had no clients when I first set up my practice. I experienced the same pain as other business owners of setting up and growing a business and those were my only plans – to grow the business. I had no plans at all for succession planning.

"It’s been a journey for me to convince Adarsh to become a practice owner one day, and now it is my responsibility to train him to be one. It’s a legacy – I’m passing on the baton to someone, but I need to make him worthy of that as well in all respects – technical aspects, advisory aspects, and of course commercial aspects.

"Every time I start thinking about training Adarsh, I remember that I wasn’t trained – I learned myself and I’m still learning, so when is the point when someone can feel ready? My belief is that the day I qualified and got my practising certificate, I was ready because ACCA’s licensing process is so rigorous that I knew what a practitioner did. Any member getting their practising certificate now, you’re ready – but if you are not confident then a mentor can help you in your early years as a practice owner.

"I have now made a formal succession plan which I have shared with Adarsh but it is incomplete – I have clearly defined what I expect of Adarsh in terms of the skillsets he needs to develop to become a practice owner, but we are still in the first phase of succession planning at the moment." 

Adarsh remembers it well. "When my dad started talking to me about taking over the practice one day, it was a bit of a scary thought. I know how well respected he is in the accountancy community and how extensive his network is. I have seen how he advises clients and helps the community which are massive shoes to fill. 

"Now I am eager to learn and hungry to know what is next and how I can get there. This is in my control and I am determined to make it happen."

Kamlesh continues, "In 2024, we will start the progression process with a view to taking different roles in the practice. I will focus on the business development side and consultancy side. Adarsh will do the day-to-day compliance – the best place to learn is being a practice principal. Adarsh and I are both ambitious – I want to grow the practice by 20 times in the next five years, so I want to be fully focused on that. The plan is that by December 2024, the practice will be bigger and stronger with more staff and Adarsh will be ready, but the gradual work is now."

Adarsh agrees - "I have acknowledged the need to build my relationship with clients, so I have been involved in more client meetings. We are continually working together on building the good foundation to provide excellent client services."

Kamlesh is looking forward to the future. "I am sure that many practitioners sell their practices and retire but they still care about their clients after taking care of them for so many years, which is a good thing. But in terms of capacity, when you are reaching 65 years and you have worked so hard for so long, you want to enjoy life a bit, travel and do other things. I have gradually started this transition process because I want to do other things as well. 

"When I looked at other succession plans, they talked about lots of things but not like my plan. I feel that I am still responsible when I hand over the practice. If I handover too early and it collapses, then I have not prepared Adarsh to carry the baton. My presence needs to be longer, but it should gradually reduce because it is important that I acknowledge my presence will overshadow Adarsh’s presence and I think that is a disservice to the practice and to him. 

"Accountants are humans and it is natural that we fall into that stereotype that whilst we advise others, we sometimes fall short of applying it within our own business and we are guilty of that. It is not a sin, but it needs to be acknowledged as a weakness in the practice model that we do not do this succession planning as such.

"One of the lessons I have learned in life is that nothing is free in this world. I think it is a disservice to others to say that it is free for you. I think Adarsh needs to learn and go through the journey, because one day he may have to think about his own future for the practice if his children don’t want an accountancy career. For many years as a practice owner, you don’t always take a salary, or you only take a minimum wage, or you pay everybody before you pay yourself. You work unsociable hours and take very few holidays and that’s where the value is frozen. There is a parenting duty – so something goes as a gift to the children, but there is another part of that – it has to have a value. It’s a mixture of both. 

"Any practitioner or anybody who is inheriting a practice needs to go through that process of actually recognising the value. If I say that the practice is worth £1m, Adarsh will lose a couple of nights’ sleep but then he needs to figure out how to extract that £1m profitably - how to grow the practice so that it generates £1m in value and he can pay me. It has to have some value – it cannot be the total value, but it cannot be zero value. It has to be a middle ground value so it will allow me to do the parenting duty – passing an inheritance to my son – but at the same time, I trust in his ability that he’ll run the business and be able to extract the value that I deserve to pay me.