9 succession planning tips for accountants to give themselves: the October issue focused on succession planning, primarily from the viewpoint of how accountants can help prepare their clients. Phyllis Bernstein follows up this month by speaking to you--accountants who own your own firms!

Advisors tell small-business-owner clients they are risking it all by having absolutely no plans in place for their businesses when they retire, become ill or die. However, serious illness, disability or death can catch any firm by surprise. As business advisors, we need to "walk the talk."

I know many advisors (so, presumably, this applies to their clients) who bury their heads in the sand rather than facing the fact that they won't always be around to look after their business. After any firm survives the start-up stage, it's essential to have a business succession plan. Developing family members, key employees and management team members, and allowing them to exercise authority and control, will be vital to success.

Once a succession plan is in place, it becomes important to communicate that plan. Such communication gives key management people and/or family successors a clear understanding of the path to the future, as well as any role they may play in that path. It also allows them to begin setting goals for themselves.

Here's a lesson from a hard dose of reality. A CPA in Connecticut told me that her recently departed financial advisor partner was a key reason clients were doing business with the firm. We agreed that these clients needed reassurance that they would continue receiving the same quality of attention and service.

Here's a practice insight: You can reassure clients by introducing them to younger associates and by shifting some responsibilities connected with such accounts to those younger associates. Get the clients comfortable doing business with the "next generation" of ownership with no change in service.

Succession planning is a complex and emotional issue. Owners and managers fail to take the bull by the horns for a number of reasons, including:

* facing the fact that the business will not always be a part of their lives,

* having difficulty choosing between children as successors,

* feeling that no one can do as good a job in running the business, and

* fearing loss of identity.

Here are nine succession planning tips to consider for your clients and for yourself:

1. Start the planning process early so you can carefully weigh all options and come to the best decision for your firm.

2. Consider potential successors on their individual merits, and avoid appointing someone simply because they remind you of yourself.

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3. If you want to keep it in the family, groom only the members of your family who possess the appropriate skills and talent for the job.

4. When you are ready to start grooming a successor, provide relevant on-the-job training enabling him or her to achieve their full potential.

5. If you are planning to retire soon, set a date and stick to it. This date should be far enough in advance to prepare your successor and the rest of your employees for the transition.

6. When agreements restrict transfers, allow or require redemptions and cross purchases to assure continuity in management and succession.

7. Consider using employee stock ownership plans (ESOPs) in connection with management succession.

8. Life insurance can provide money to pay off estate taxes, fund buy-sell agreements or buy out a family member not participating in the business. Also, insurance policies can provide cash for emergencies, helping to avoid selling to outsiders in hard times.

9. Estimate your firm's value, or retain a professional valuator who knows what to look for and what questions to ask.

Having a properly designed buy-sell agreement is only half a plan. Such an agreement should be funded, and this often means buying life insurance.

If having your firm continue into the future--without compromising your own retirement needs--is important, implementing your succession plan is the most important step of all.

Phyllis Bernstein, CPA, is president of Phyllis Bernstein Consulting, Inc. in New York City. Contact her at phyllis@pbconsults.com