
Key performance indicators, or KPIs, are data points which help businesses assess progress towards an intended result. Ensuring you take the time to Mark, Measure, Monitor, and Master those KPIs which will help you manage, protect, and grow the equity value of your business.
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Topics:
Benchmarking,
KPI,
EMS

For many years, our data has shown that firms with over $2M in annual revenue tend to grow twice as fast as those with $250K in annual revenue. Contrary to how it might seem, this is actually a function of their structure, not necessarily their size. These firms have cultivated efficiencies in cash flow, capacity, expenses, and operational systems to support scalability and growth. These sophisticated structures are accessible to most businesses–in a wide range of revenue levels–if they’re willing to explore and dedicate time and resources to improve.
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Topics:
Business Growth,
Business Value,
Client Retention,
Benchmarking
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KPIs, or Key Performance Indicators
During a recent webinar hosted by FP Transitions, several attendees had questions about KPIs. Marcus Hagood Director of Equity Management System at FP Transitions, and Mike McKennon, EMS Consultant at FPT, had previously hosted a webinar on KPIs, and many of those key points are featured in the following post.
Knowing the KPIs
The industry is flush with discussions of KPIs. Surely, you’ve heard the term before, or perhaps seen these indexes described as performance metrics, key variables or key success indicators. At FP Transitions, we use the term Key Performance Indicator; but ultimately, the data these terms convey is the same. KPIs are a unit of measurement leveraged to help you determine where your business is at, where you want to go, and will ultimately provide you with a road map of how you should proceed on your journey.
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Topics:
Webcasts,
Business Growth,
Tip of the Week,
Deal Structure,
State of the Market,
Sustainability,
Benchmarking,
Valuation & Appraisal,
Business Operations
We're pleased to announce that FP Transitions was named one of CFO Tech Outlook's Top 10 Valuation Service Companies of 2021, recognizing FP Transitions' efforts and placing our team at "the forefront of providing Valuation consulting services and transforming businesses."
The publication accolades were accompanied by an article: "FP Transitions: Providing Comprehensive Valuation Services," featuring our Ryan Grau, CVA, CBA, Partner and VP of Business Valuation Services. The full text of which can be viewed below or by clicking here.
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Topics:
Business Value,
FPT in the News,
Benchmarking,
Valuation & Appraisal

Completing an annual valuation on your business is the financial service industry equivalent of undergoing your annual physical. I’ll turn 55 this year and I have resigned myself to the fact that prescription medications have officially become their own food group and an annual physical is no longer optional. My annual pilgrimage happens to take place in the spring tucked neatly amongst the sporadic appointments to see specialists for knees, elbows, near sightedness, far sightedness, rotator cuffs and something about my lumbar.
Now, the key word here is annual. If I had my cholesterol checked 10 years ago and then never again how am I going to know if what I am doing is working? An annual examination provides a historical record of your overall health including your vital signs enabling you to make changes in order to perform at your best. The good news is that, unlike my annual physical, your valuation results should get better as your business matures.
Your business is a living, breathing entity. Just like the investments you make on behalf of your clients, it needs to be nurtured, protected, and developed in order to realize its maximum value. It’s important that your valuation be updated annually. The monetary value of your practice is just one of many pieces of information to be gleaned from a professional business valuation.
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Topics:
Acquisition,
Business Growth,
Business Value,
Exit Planning,
Continuity,
Benchmarking

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

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,
Sustainability,
Benchmarking,
Enterprise

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 their own performance 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,
Sustainability,
Benchmarking,
Enterprise

The value of your practice is determined by many factors, some obvious, and some not so obvious. Even if the idea of exiting the business is far down the road, as an owner you need to consider the ten factors below as part of managing and growing the practice. Focusing on these areas can make a major difference in your book’s sustainability and its eventual purchase price (when transition time arrives).
The purpose of this article is not to review the theoretical aspects valuation or create an exhaustive list of factors that influence your value. That would be a much longer, technical article–which can be viewed here. The point here is to highlight the drivers that can help give your value an extra boost in the right direction. These factors include:
- Predictable revenue and recurring revenue streams
- Client demographics
- Average client tenure
- Size of potential market
- Transition timing
- Client affluence and average client revenue
- Asset or revenue concentration
- Use and structure of referral fees
- Length of surrender period
- Profitability
As you look at your practice with an outsider’s eye, you will see avenues that help grow the business and make it more robust.
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Topics:
Business Growth,
Business Value,
Buying & Selling,
Sustainability,
Benchmarking,
Valuation & Appraisal