The Conversation Nobody Starts

By Frank Gramlich, CPA | Xavier Financial Services

There is a question I think every business owner eventually has to answer: What happens to this business if I’m no longer the one running it?

I can tell you from my own experience this is an easy question to put off. Xavier Financial Services is still a young firm. I am building it, investing in it, and looking for opportunities to grow. Retirement feels a long way off. But right now, I am closer to retirement age than college! (How the hell did that happen?!?!?!?!?) Maybe the right opportunity comes along in five years and it changes the direction of XFS. More likely, I will still be doing this 25 years from now and only then start thinking seriously about stepping away.

Succession planning feels distant. At the same time, my search for an accounting practice to acquire has given me a view of this issue from the other side. I am seeing firsthand how much the future of a business depends on decisions an owner made years before an eventual transition. I am documenting those lessons as I go because someday I will be the person thinking about what comes next for XFS and our clients.

There is also a much more immediate version of the question: If I couldn’t run this business tomorrow, what happens next?

Honestly, I do not have an answer right now. If I became sick and could not work for a period of time, one of my first calls would probably be to an outsourcing contact who could help keep work moving. I will admit that handing off client work does not come naturally to me. Based on the relationships I've build with XFS, I feel responsible for the quality of the work and giving up some of that control can be difficult.

It is also something I am going to have to get more comfortable with as XFS grows. Eventually, the same planning will matter in reverse. There may come a time when I want the firm to get smaller, when I want someone else handling more of the workload, or when I am ready to leave entirely. It is difficult to picture that today while I am so laser focused on growth, but the business I build now will influence the choices I have then.

That is where succession and exit planning become much broader than a retirement conversation. For some owners, it means identifying a future buyer or successor. In businesses with multiple owners, it can mean deciding what should happen to an ownership interest if someone dies, becomes disabled, retires, or wants to leave, and making sure the buy-sell agreement reflects those intentions. Where would you even go to draft a buy-sell agreement tailored to your best interests? It can also mean thinking about who can make decisions, who knows the key client relationships, and whether someone else could actually step in and operate the business.

I understand why owners avoid the conversation because it does not feel especially urgent to me either. It's not comfortable facing your own mortality, either! What building XFS continues to teach me is that planning while you still have choices is considerably easier than figuring everything out after circumstances make the decision for you.

You do not need to know when you are leaving, but you should have some idea what happens when you do.