For a lot of transactions, the tail end of the transaction can be for 3 to 10 years.
That's kind of the new model of M&A right now. It used to be that we only saw transactions when an advisor was ready to exit. Now we're starting to see advisors think about M&A earlier and earlier in their career–whether that’s preparing for a sale or exploring a merger.
Topics: Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
This Playbook is all about maximizing your M&A efforts and going with the flow of the system for acquisition success. You don't need to do everything all at once from the jump. Winning gold is about taking it one heat at a time.
There are people in the initial phase of inquiring on a practice on the open market who are trying to close the deal in that first inquiry message. And that's just the cart way ahead of the way ahead of the horse.
Topics: Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
One of the other things that I see a lot more sellers asking for is multi-generational ownership and multi-gender ownership. I encourage my clients to diversify their ownership group as much as possible.
Topics: Succession Planning, Acquisition, Multi-Generational Ownership, Buying & Selling, Open Marketplace, M&A Playbook
The biggest mistake that I see people make–the single biggest mistake–when they are in pursuit of an offering that we have on the open market, is they position themselves as a great practice, they don't position themselves as a great fit. Really not understanding what fit is and just thinking I can afford this practice and I'm 50 miles from it. And while those things can be important, there are other things that are critical in what fit is and what goes into us finding the perfect fit.
Topics: Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
Ultimately, I think sellers come to us and they want to know what kind of multiple they can get to their business. And the question is really well-intentioned, what I think would be better for sellers to ask is: How do I position my business to get the most value or to achieve my strategic objective?
Topics: Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
How has marketplace strength held on throughout 2023?
We've seen a really strong M&A marketplace in 2023. Demand is still really strong. As we've consistently had at least over the last five years, we've got an inverse in terms of there's a really strong demand and not a whole lot of supply. And that trend has continued in through 2023.
Topics: Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
This week's playbook highlights very important insights for first time borrowers from our friend Susie McEuen at Oak Street Funding.
Topics: Acquisition, Financing, Buying & Selling, Open Marketplace, M&A Playbook
What makes a financial services firm more desirable on the open market?
Topics: Selling Your Practice, Acquisition, Buying & Selling, Open Marketplace, M&A Playbook
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.
Topics: Selling Your Practice, Open Marketplace
It is without a doubt a “seller’s market” when it comes to financial advisory practices. With an average buyer-to-seller ratio of 85:1, sellers can be picky. Given the sheer volume of qualified buyers that send in inquiries for practices listed by FP Transitions on our open-market system, it is extremely important for potential buyers to put their best foot forward and show the seller why they are the “cream of the crop.”
Remember, your inquiry is the first communication you will have with the seller, who likely knows nothing about you. While we don’t recommend drafting a novel, your inquiry should at a minimum tell the seller enough detail to pique the seller’s interest. Inquiries that merely state, “I have cash,” “Let’s talk,” “I need more information,” or “See our website for more information,” are usually immediately stricken by the selling party from consideration, regardless of how well qualified the inquirer may actually be. This is because experienced and successful buyers take the time to make a strong first impression.
Topics: Acquisition, Buying & Selling, Open Marketplace