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Process Overview: Selling Your Business on the Open Market


Selling your business is a big decision. The good news is that demand is high and you have many options for structuring your exit. You also have many places to conduct your buyer search: reaching out to your professional and community networks, pursuing unmonitored listing bulletin boards, entertaining an unsolicited query on the table, or engaging in an open-market search. Most of these strategies result in having to navigate the process alone.

Buyers who have bought businesses before have the advantage of prior knowledge of the acquisition process, but as a seller, you often only get one shot at it. It’s important to understand what to expect. What follows is an overview of the process for selling your business through the FP Transitions Open Market.

PHASE ONE: Finding the Best Match

1. Establishing Value (vs. Price)

Business value and selling price can be two different numbers. A comprehensive and professional valuation will provide a fair foundation for your selling price that considers revenue, expenses, client demographics, geographical location, and much more. As part of selling your business on the FP Transitions Open Market, we’ll perform our value assessment for the purpose of a near-term sale. Our opinion of value is based on assessing revenue, expenses, and staffing as well as various other factors that dig into what makes your business uniquely valuable. To determine the selling price for your practice, we consider your business’s value, the buyer demand in your area, and the interest for the unique qualities of your practice in addition to specific deal terms and other personal goals.

2. Determining Buyer Criteria

Every financial services business is unique and finding the right buyer for the clients you’ve worked with for years should be a top priority. In addition to fulfilling your responsibility to your clients, finding the right buyer ensures a smoother process and greater client retention post-closing. This is why we start the process by exploring who you envision as the best caretaker for your clients’ futures and helping you articulate your required criteria. This is also where key attributes for an acquiring firm are defined, including (but not limited to) service offerings, investment philosophy, and niche demographics.

3. Setting Deal Terms and Price

While the fit between the buyer and seller are paramount, before opening your practice up to the M&A marketplace, it is important to consider the price and deal terms you expect to receive for your business. In addition to the numbers (e.g., cash at closing), deal terms include, transition support expectations, remaining staff, and any other special circumstances including Sell and Stay® intentions.

4. Marketing the Practice on the Open Market

Once you’ve clarified buyer criteria and terms, we can put your practice out into our marketplace. The FP Transitions team prepares marketing materials and uses a multi-channel approach to promote the opportunity to our large network of advisors, following the philosophy that casting a wide net for buyers makes it more likely to find a buyer who meets your criteria. We present critical business details (AUM, practice type, location, number of households, etc.) along with your defined criteria and other special considerations and start collecting inquiries from interested buyers. Your name, business name, and any other identifying information will remain confidential.

5. Vetting Potential Buyers and Narrowing the Field

When it comes to navigating the Open Market, this step can be the most daunting to sellers, especially since we see an average of 85 inquiries per practice for sale. This is where the support and experience of our team is invaluable. Our team screens your inquiries based on your criteria and key data points, and presents you with qualified buyers only. As you review these inquiries, our team is available to answer questions and help you narrow the list of buyers to those you invite to make a formal offer. To take the stress off your shoulders–and to preserve confidentiality–our team facilitates requests for additional information, communication with prospective buyers, and submission of initial offers.


From step one our team of professionals protects your identity and provides confidentiality. When the time comes for formal offers to be submitted and reviewed it is important that a personal connection be allowed. You and your short list of prospective buyers will need to learn a bit more about each other and have a conversation before deciding if you want to move forward in the process. At this point, all parties will be required to sign a Non-Disclosure Agreement (NDA) to continue to preserve confidentiality before moving forward.

6. Choosing Your Finalist and Establishing LOI/Term Sheets

After holding initial meetings with your buyer finalists, reviewing offers, and fielding counteroffers next steps are the signing of the offer/term sheet. Remember, finding the right buyer is critical, and, though not necessarily common, it is not atypical for sellers to decide to revisit prior offers or reopen the practice for inquiries.

Once the final buyer has been chosen, the buyer will present a final offer in the form of a Letter of Intent (LOI) or Term Sheet. The LOI is intended to set expectations for the transaction moving forward, including time frame, payment terms, deal structure, price, and other details depending on the business and parties involved. These documents differ in format and execution, but, typically, both are non-binding with the presumption that at this point both parties have committed to work in good faith to successfully close the sale.

PHASE TWO: Completing the Deal

7. Performing Due Diligence

During due diligence, both parties formally investigate and review each other’s businesses in detail to determine if there are any deficiencies or differences from what was promised or expected. This step is important for both buyer and seller to perform, but the goals are different. Buyers are looking at the details of the business for sale, including technology systems, organizational structure, compensation, staffing, and compliance issues. Sellers, on the other hand, are looking at the buyer’s ability to purchase and operate the business by delving into things like credit scores, financial commitments and debt, previous acquisitions, and disciplinary history.

8. Negotiating Finer Deal Points

Based on discoveries made during due diligence–and the whole of the process thus far–buyer and/or seller may choose to modify some terms of the deal. This could include adjustments to down payment percentage, length of note, or, less often, price. At this point other deal terms that were not addressed in the LOI are discussed and negotiated.

9. Drafting Documents

Once the additional terms have been negotiated and agreed upon, the deal documents are prepared by the FP Transitions legal team. It’s important that each party review these documents with their own independent counsel and. This stage commonly includes some back and forth to finalize language, but if the right buyer/seller match has been made and due diligence has been appropriately performed, there should be only minor adjustments and, hopefully, no last-minute surprises.

10. Closing

In this penultimate stage, documents are signed, ownership and responsibility of the business officially changes hands, and payment is transferred. You have successfully sold your business!

PHASE THREE: Transitioning the Clients

Much of the post-closing work falls to the new owner as they solidify client relationships and secure any necessary agreements to transfer service. As the seller, however, it is your responsibility–and often a documented obligation–to help to make their transition as smooth as possible usually by facilitating client introductions and helping to address questions and concerns. Oftentimes, your eventual payout will depend on the client retention percentage at some point post-closing (typically 1-3 years).

Additionally, if your exit is a Sell and Stay® and you intend to remain with the firm as an employee and service clients, you might be expected to have a larger role in the post-closing process. This more gradual transition can greatly increase client retention rates and final payout of the sale.

By leveraging the FP Transitions Open Market you’ll gain access to experienced guidance for structuring your terms and price, a network of 30,000+ potential buyers, and expert help navigating the process every step of the way.

Checklist + Workbook: Plan for Sellers

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