TRANSITION TALK

10 Reasons to Professionally Value Your Business

Posted by FP Transitions on Nov 28, 2018 2:08:05 PM

10 Reasons to Professional Value Your Practice

Experienced business owners recognize the importance of tracking and monitoring the value of their practice over time. They know their practice is their most valuable asset, and by valuing it, they are empowered to grow, protect, and realize the value they have built.

Following are ten situations where it’s essential to have a current value and accurate understanding of your business.   

1. Increase Value

To cultivate growth and increase the value of your business, you need to have a starting point—a place to grow from. An accurate and comprehensive valuation will identify value drivers and growth opportunities, allowing you to create an informed growth strategy and make changes that will improve performance. The ability to track those changes and the value of the practice year after year enables you to see your progress and ensure your growth is on target

2. Benchmark Your Business

Tracking your value year after year allows for accurate benchmarking of the business. A thorough benchmarking report will look at your business and compare it to similar-sized businesses in the market, evaluating your company’s standing against the competition. Benchmarking reports reveal how your business stacks up against your peers as well as against leaders in the industry.

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Topics: Valuation & Appraisal, Business Value, Business Growth, Acquisition, Succession Planning, Benchmarking

If At First You Don't Succeed...

Posted by FP Transitions on Nov 9, 2018 9:53:20 AM

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In 1953, a start-up business called the Rocket Chemical Company and its staff of three set out to create a line of rust-prevention solvents and degreasers. Toiling in a small lab in San Diego, California, they set about to create a “water displacing” formula for use in the aerospace industry. It took 40 attempts to get the formula figured out.

But figure it out they did, and WD-40 was born. The name stands for water displacement formula perfected on the 40th try. Imagine what would have happened if the inventors had given up after two dozen or so really solid attempts?

The story, and the point, of course, is bigger than trying hard and eventually succeeding. WD-40 was initially a product limited to special uses, an example of which was protecting the outer skin of the Atlas missile from rust and corrosion. But that was just for starters. The product actually worked quite well for a variety of other uses–so well that several employees snuck some WD-40 cans out the plant to use at home on more mundane tasks like squeaky hinges and rusty nuts and bolts. The product eventually became a household staple. By innovating and adapting to the market, this small group of entrepreneurs created something great.

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Topics: Acquisition, Sustainability, Buying & Selling, "Buying, Selling, and Valuing Financial Practices"

FPA Annual Recap : Elevating the Profession

Posted by Christine Sjölin on Oct 19, 2018 9:50:20 AM

The last few years I’ve been unable to attend the FPA annual conference due to personal commitments. It was great to be back on site for this year’s event in Chicago.

The Future of the Industry

As an Official Sponsor of the Next Generation, we are tapped into what young advisors are doing, hearing, and saying. It’s an energizing group to be around—the future advisors I met in Chicago view financial planning as a calling as well as a rewarding career. It does strike me as a bit ironic that the “NexGen” community stops at 37 years old, when the average age of a graduate in a financial planning program (as shared during a conversation with university staff) is 41. I suspect these more seasoned career changers will have an easier time making their way into the industry, but it’s important to incorporate the youngest professionals into existing businesses, as they will impact the industry for decades, if they don’t get discouraged. This new generation of advisors are more dynamic and driven than they’re often given credit for, and these savvy younger professionals will continue pushing the status quo to create opportunities for themselves.

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Topics: Sustainability, Next Generation, Talent Recruitment, FPA, Events

BOOK REVIEW: Successful Hiring for Financial Planners: The Human Capital Advantage by Caleb Brown, CFP

Posted by Kem Taylor on Oct 17, 2018 1:01:45 PM

Brown, Caleb. Successful Hiring for Financial Planners: The Human Capital Advantage. Coventry House Publishing, 2018.

Many small financial advisory firms don’t have a Human Resources Department. So when it comes time to seek out, hire, train, and develop employees, those tasks usually fall to the owner. They must figure out where to find candidates, what to ask in an interview, how much to pay, how to set up a training plan, and how to keep them engaged and motivated. That research takes valuable time away from the owner’s other obligations and productivity.

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Topics: Sustainability, Next Generation, Talent Recruitment

Course Corrections for Your Succession Plan

Posted by FP Transitions on Oct 11, 2018 9:42:48 AM

Course Corrections

Building a sustainable business and incorporating new talent into your ownership structure is a process that takes planning and monitoring. But it’s a process that–when done correctly–can yield incredible satisfaction, growth, and value. A process with so many moving parts including multiple parties and expectations is bound to see some bumps. Sometimes those bumps can necessitate larger course corrections in order to keep the plan on track.

There are a variety of situations that can cause a larger adjustment to your succession plan–whether they’re driven  by G1 or G2, positive or negative, preventable or not, and expected or not. Below is an excerpt adapted from a section of Succession Planning for Financial Advisors, written by FP Transitions Founder and President David Grau Sr., JD.

If Founder Plans Change

The whole purpose of a succession plan is to help your business outlive you, so count on this being a somewhat lengthy process. While some plans on paper may go out 20 or more years, they are implemented tranche by tranche, with planned opportunities for reassessment and course changes or adjustments. At a minimum, plan for annual valuations to monitor value, annual benchmarks using that valuation data to track operational numbers, and plan adjustments every five years or so. Depending on the size of the business, the number of owners, and the goals, some businesses and firms prefer more frequent maintenance so that the course corrections are more subtle.

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Topics: Succession Planning, Sustainability, Selling Your Practice

SOLD : September 2018

Posted by FP Transitions on Oct 4, 2018 2:11:03 PM

FP Transitions is pleased to announce the recent sales of financial services practices in the following locations:

  • Santa Cruz, CA • $221,000
  • Southern New Jersey • $668,000
  • Maryland • $652,000
  • Southern Oregon • $261,000
  • San Francisco Bay Area • $583,850
  • Northern California • $1,800,000

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

LIST YOUR PRACTICE WITH FP TRANSITIONS

 

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Topics: SOLD, Selling Your Practice, Buying & Selling, Acquisition

NexGen Update from the San Diego FPA Chapter Symposium

Posted by Kem Taylor on Sep 28, 2018 10:01:00 AM

Earlier this month, I attended the San Diego chapter FPA Symposium. Along with case studies and market information, there were presentations on program updates for the next generation of advisors. I thought it was especially relevant to hear about their NexGen focused resources in light of Michael Kitces’ article published last week on our profession’s looming talent shortage: Competition For Talent And The Rising Shortage Of Next-Generation Financial Advisors. 

Here are some notable programs the San Diego chapter has set up with a focus on the next generation and getting future planners excited about a career in financial services.

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Topics: Events, FPA

Which Exit Path is Right For You?

Posted by FP Transitions on Sep 20, 2018 11:53:53 AM

Which Exit Path is Right for You?

You’ve built a business providing financial insight to a growing community of clients. You’ve fostered this relationship over the years and established a trusted role in their lives. As your clients have moved along their journey as professionals, entrepreneurs, investors, or heirs, they’ve turned to you for advice at each step; and now they are counting on your business to be there and to see the process through to the end. This means that as your clients transition into their own retirement, they will depend on your services more, not less. Regardless of the plan you choose, it is your duty as an independent financial professional to have a plan for client service and support that extends beyond your own career.

One way or another, your path as a financial planner will come to an end. The question is whether or not you’re going to exit on your own terms and in your own way. Are you going to create a plan for your exit that preserves the value and growth of the business you’ve spent your career building? Are you going to make sure your clients’ assets are in good hands for the length of their lifetimes, not just for the length of your career?

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Topics: Business Growth, Business Value, Enterprise, Sustainability, Benchmarking

Maximizing Business Growth Through Benchmarking

Posted by Marcus Hagood on Sep 14, 2018 8:48:16 AM

Maximizing Business Growth Through Benchmarking

The average advisor faces a difficult and increasingly competitive industry. With industry consolidation, technological advances, increased competition, more regulatory oversight, and the need to recruit and retain talent, it has never been more critical that financial advisors use benchmarking as part of their ongoing strategic planning process. With benchmarking, a business owner can improve their relative revenue and expense performance, organizational structure, and marketing results to support growth and achieve short-term and long-term goals. Used in conjunction with your business planning process, benchmarking is a powerful tool to track and build additional enterprise value.

What is Benchmarking and Why it is Critical?

Benchmarking is defined as a measurement of the quality of an organization's policies, products, programs, and strategies as compared against standard measurements of their peers and “best-in-class” providers. An effective benchmarking program provides insight into the connection between your business decisions and the resulting outcomes.

Benchmarking improves performance by identifying and applying demonstrated best practices to sales, operations, and procedures. Comparing the relative performance of their products, services, and sales both externally (against competitors) and internally (with ongoing operations and business decisions) ensures that performance meets or exceeds the competition. The objective of benchmarking is to find examples of superior performance and understand the business practices driving it. Effective business owners utilize benchmarking insights to improve by incorporating these best practices, not through imitation, but through innovation.

The Four “M's” for Incorporating Benchmarking into Business Planning

Every firm has unique needs for benchmarking. For example, the goals of a mature firm versus that of a start-up practice may differ greatly. More established business and solo advisors might be more likely to utilize benchmarks to implement changes that result in increased efficiency and profitability. By contrast, a young developing practice may be more focused on driving and managing growth in clients and revenue.

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Topics: Business Growth, Business Value, Enterprise, Sustainability, Benchmarking

SOLD : July / August 2018

Posted by FP Transitions on Sep 6, 2018 7:00:00 AM

FP Transitions is pleased to announce the sale of financial services practices in the following locations during the months of July and August:

  • Central Coast of California • $3,200,000
  • Cedar Rapids, IA • $807,500
  • Kansas City Area Kansas • $1,198,812
  • Little Rock, AR • $1,450,000
  • Los Angeles, CA • $1,600,000
  • Research Triangle of North Carolina • $1,221,696
  • Southern Coast of Florida • $880,000
  • Southeastern Coast of Florida • $794,037
  • Boca Raton, FL • $988,046

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

LIST YOUR PRACTICE WITH FP TRANSITIONS

 

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Topics: SOLD, Selling Your Practice, Buying & Selling, Acquisition

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