The Sell and Stay® path is an often overlooked, gradual exit option hidden amongst the folds of internal succession, mergers, and external sales. For owners who need or want to work towards an exit but are not yet ready to leave the business entirely, Sell and Stay® is a perfect solution. Sell and Stay® allows an owner to continue working and earning an income without having to worry about matters such as management, day-to-day operations, or compliance.
Topics: Buying & Selling, Exit Planning, Sell and Stay™
While continuity plans are required by the U.S. Security and Exchange Commission (SEC), many advisors stop at the bare minimum, leaving their firm open to major disruption, and potentially an eroded value that leaves family or colleagues holding the bag.
Topics: Continuity Planning, Exit Planning, Continuity Partner Matching, Transition Plan, Continuity
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LLC vs. Corporation. Which entity structure fits your goals?
Understanding your specific needs and specific goals is an important first step of the entity-building process. As Rod Boutin, JD, General Counsel at FP Transitions outlined in a recent webinar, “it is important that we build an entity that clearly identifies and promotes your attainment of those goals. Done right, an entity is a tool to align with your goals.”
Topics: Succession Planning, Organizational Structure, Business Growth, Tip of the Week, State of the Market, Exit Planning, Next Generation, Sustainability, Wealth Management, Valuation & Appraisal, Business Operations
Everyone has a unique vision of their future; we’re all trying to forge a path with our careers to that end goal where we can take a big breath and simply enjoy the life we’ve earned. While we might have an idea of the specific journey we will take, it’s important to remain open to alternate routes and unexpected shortcuts along the way. The hardest step on this journey for most is that which takes them out of the professional world they’ve been a part of for many years.
Unique goals and unique journeys require a creative strategy. For financial advisors, the Sell and Stay® path offers flexibility and freedom for an exit from the industry. There are advisors in the industry who have built a team of advisors with next generation owners and have built an internal transition into the sustainability of their business. The majority of our industry, however, is still made up of single-owner practices. Luckily, Sell and Stay® offers them the option of a similar exit path.
Topics: Succession Planning, Selling Your Practice, Exit Planning, Sell and Stay™
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.
Topics: Acquisition, Business Growth, Business Value, Exit Planning, Continuity, Benchmarking
Selling a business is overwhelming. And while there’s no getting around the complex process, negotiations, and paperwork, there are steps you can take prior to listing your business that will help to smooth the process. Being prepared means less anxiety and surprises throughout the process & more satisfaction when the sale is complete.
1. Know Your Value
Value is the first step for any business evolution. An accurate and comprehensive assessment of value is key to realizing what your business is worth when it’s time to sell. Beware though, taking shortcuts to value will often result in money left on the table.
READ: Using Multiples of Revenue to Determine Value
2. Gather Your Team
As you go through your selling journey you’re going to need a team of professionals in your corner to ensure you don’t run into any regulatory issues, or leave any money on the table. You’ll need a CPA and a personal lawyer to act as your advocate. But you’ll also benefit from a nonadvocacy consultant who is committed to the success of the deal and a successful transition as a whole – an expert in the process who can alleviate the guesswork and is available to answer any questions.
3. Imagine Your Ideal Buyer
Before you list your practice in search of a buyer, you should spend some time thinking about your ideal buyer. What attributes, attitudes, experience, and philosophies are important for the next owner of your business to have? Which of these criteria are essential, and which would you be willing to let go of in lieu of other favorable deal points?
4. Be Honest with Yourself
Topics: Selling Your Practice, Buying & Selling, Exit Planning
If you’ve been reading my recent posts, you know I consider myself a “win-win” gal. You’ve read about how the self-discovery of my real win—not owning the business—was key to not only successfully exiting my business, but also launching what I now call “my next chapter.”
Up to this point, I was primarily speaking of the founder’s win, and that of a buyer. In my research and work with clients who are firm founders, I have noticed that their perspectives on their own personal transition strategies often fall into two camps. That is, some are asleep at the wheel, relying on autopilot; and others are convinced they’ve already got a plan ready to go whenever they are.
In recent months, I’ve come to recognize there is one more win to add to the mix. This realization has come about as I met with a growing number of smart, hard-working “junior” professionals who are frustrated by a lack of clear strategic vision for the firm and their role in it. Even those who are designated successors, described a lack of transparency from the founders regarding the firm’s financial picture, vision and strategy.
Topics: Selling Your Practice, Culture, Guest, Exit Planning, Next Generation
This is the third piece in our series with guest writer Laurie Nichols (read the first here and the second here) that chronicles her personal journey of selling her her business four years ago.
After spending nearly 30 years in financial services, including more than a decade wearing the Chief Compliance Officer hat, I don’t often make definitive claims or promises.
However, as I reflect on what has brought me to where I am now—living and working with renewed energy and excited about the future—there is something I know for sure: A successful transition from business owner to an inspiring next chapter starts with looking in the mirror and challenging yourself.
How I Know
As I started to experience some “mid-life wake up calls,” both personally and professionally, I resisted looking at the truth of where I was in a holistic way.
I was a worrier. A deeply committed worrier who thought the key to financial security and success was to just keep pushing the same old boulder up hill and hoping it wouldn’t roll down.
Topics: Selling Your Practice, Guest, Exit Planning
After Laurie Nichols out of her business four years ago - a transition that took her on a personal goal-setting journey (read about it in her first guest post here)- she was able to look back on the importance of planning ahead for a successful exit and future for herself and her business.
Over the years, as my partners and I grew our business, opportunities to monetize seemed to crop up regularly. We figured we had time though and relaxed into our comfortable position on the fence certain of a “someday score”–we thought there’d always be someone eager to buy and we’d be set.
We had no dates, no planning tasks, no target successor profile. We coasted on autopilot and didn’t really think much about someday–except the occasional fantasy about the cash out sure to come.
Wake up
Then, about 10 years ago, the wake up calls started and we realized someday was upon us with no “score” in sight. As I look back on my transformation from shareholder to seller, three particular wake up calls stand out as crossroads that could have easily been ignored.
Topics: Selling Your Practice, Guest, Exit Planning
At FP Transitions, we’ve been valuing financial advisory practices and facilitating their transitions on the open market for almost two decades. In that time we’ve amassed the industry’s largest, most comprehensive database of financial advisor data. This year’s data tells the story of a robust Mergers & Acquisitions market despite industry uncertainties.
This year’s M&A webcast looks back over the last five years of advisor data to bring you a new perspective on the M&A market and the future of your business. Preview the presenation below, or click here to watch the full video.
Topics: Succession Planning, Selling Your Practice, M&A, State of the Market, Exit Planning