TRANSITION TALK

Buyer and Seller – Finding the Perfect Match

Posted by FP Transitions on Feb 13, 2024 9:00:00 AM

Blog Banner - Buyer and Seller Finding the Perfect Match

One could argue that the open market acquisition process is a bit like online dating. Using a finite amount of fields and characters you must convey to someone–whom you’ve never met and know a limited amount of information about–that you are worth their time. That you are worth their time conversing with, spending time together, and potentially making a binding commitment with.

And like dating, finding the right match isn’t about how much someone is willing to spend on dinner, but how many of your attributes complement each other, how well you get along, and how much you trust each other. These matters are paramount to making a relationship work–whether it’s friendship, love, or business acquisition. 

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Topics: Selling Your Practice, Acquisition, M&A, Deal Structure, Buying & Selling

The Dangers of Napkin Negotiations

Posted by FP Transitions on Nov 23, 2023 9:00:00 AM

Blog Banner - The Dangers of Napkin Negotiations

The financial services industry is a personable one. Professional networking and client prospecting depend on your charisma and ability to connect beyond surface pleasantries. But when it comes to selling your business, it’s important to keep your cards close to your chest.

It’s very easy to get excited about the prospect of transitioning your business and moving forward in life–especially, when you’re talking with a colleague you’ve known for years. However, the excitement can cloud your ability to think through details and maintain a healthy level of confidentiality. It’s important to avoid casual negotiations and hashing out deals without proper documentation.

These casual conversations–also referred to as handshake agreements, or napkin negotiations–can lead to a lot of problems, including a loss of realized value. 

SHARKS IN THE WATER

The first issue that could arise from the casual mention that you’re even thinking about selling your business is the influx of phone calls or visits from people who want to buy. It’s like blood in the water. And while buyers flocking to you may seem like a boon, it can quickly become overwhelming. Without an efficient screening system, it becomes time consuming and difficult to sift through the phone calls to find serious and qualified candidates, let alone the person who fits your ideal criteria to take over your business. You also make yourself vulnerable to predatory buyers.

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Topics: Selling Your Practice, Acquisition, M&A, Deal Structure, Buying & Selling

Mergers - A Nontraditional Growth & Acquisition Strategy

Posted by FP Transitions on Nov 6, 2023 9:00:00 AM

Blog Banner Refresh Mergers - A Nontraditional Growth &  Acquisition  Strategy (1)

Mergers & Acquisitions – everyone’s favorite topic. Understandably so when one of the fastest ways to grow is to acquire and as such, add exponentially more clients (and assets) to your business in one fell swoop.

But what about mergers? Mergers are often lumped in with conversations and statistics about acquisitions, but their role and effect on an advisor’s future is much different than an outright sale or purchase. In our book, “Buying, Selling, and Valuing Practices – The M&A Guide,” FP Transitions’ president, David Grau Sr., JD, clarifies that mergers are, legally speaking, “the joining together of previously separate companies into a single entity.” Unlike an acquisition or sale, a merger means that some or all of the owners of the previously separate companies become owners of the post-merger entity. 

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Topics: Selling Your Practice, Acquisition, Business Growth, M&A, Buying & Selling, Mergers

The Invaluable Role of Mediator in M&A

Posted by FP Transitions on Sep 12, 2023 8:00:00 AM

Blog Refresh - Is Mediation For Your Deal a Good Investment

Whether you’re buying or selling a business, there are a few players that are “must-haves” on your transaction team: personal lawyer, CPA/Tax professional, representative of your IBD/Custodian, personal stakeholders, and a non-advocate, industry-experienced mediator. 

The role of each of these players is important to the overall success of your deal, however, the mediator can sometimes be overlooked–often to the disadvantage of your deal. So, why are they so important?

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Topics: Selling Your Practice, Acquisition, Buying & Selling, Trends in Transactions Study, Transactions

Independent Advisors Will Unlock the Future (If They Can Hold Onto the Keys)

Posted by FP Transitions on Sep 5, 2023 9:15:00 AM

Blog Banner - INDEPENDENT ADVISORS WILL UNLOCK THE FUTURE (1)

Even though it had been in the works for years, last month’s Schwab/Ameritrade merger left both organizations’ advisors wondering what it meant for them. The good news is that the transition has been seen as largely successful, with only some tech snafus which, let’s be honest, is to be expected when you’re talking about huge platform changes for millions of accounts. Adapting to change rarely happens overnight.

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Topics: Selling Your Practice, Acquisition, M&A, Deal Structure, Buying & Selling

Selling Your Practice, One Chance to Do it Right

Posted by FP Transitions on Aug 30, 2023 9:30:00 AM

Blog - Selling your practice, One chance to do it right

The decision to sell a financial services practice is a difficult one for any advisor to make. After a lifetime of work to build your business, and after years of earning your clients’ trust, how do you turn the job over to someone else? Will they work as hard as you have? Will they care as much as you do? Will they always put your clients’ interests first? When selling your practice, you get just one chance to do it right. The following case study provides some unique insights into the process and illustrates the opportunities, and the mistakes, that many first time sellers make:

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Topics: Selling Your Practice, Acquisition, M&A, Deal Structure, Buying & Selling

What Makes a Firm Desirable? - M&A Playbook

Posted by James Fisher, JD on Aug 10, 2023 3:23:00 PM

What makes a financial services firm more desirable on the open market? 

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Topics: Selling Your Practice, Acquisition, Buying & Selling, Open Marketplace, M&A Playbook

Price, Not Value, Is a Product of Negotiation

Posted by FP Transitions on Jul 24, 2023 9:00:00 AM

Blog Banner - Price, Not Value, is a Product of Negotiation

Price is usually the most difficult hurdle for buyers and sellers to overcome. The value of a business is different for each party participating in a transaction and is based on opinion and the specific set of circumstances for each individual. Price, on the other hand, is the number at which the transaction is executed. Yes, value informs price, but it is not the only influencer. Price is also the result of good faith negotiations between buyer and seller. While negotiation does not necessarily impact each party’s perception of value, it allows for dialogue so that both sides arrive at a price where the value for each individual overlaps and a mutually beneficial deal can be struck.

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Topics: Selling Your Practice, Acquisition, M&A, Business Value, Deal Structure, Buying & Selling, Mergers

Preparing to Sell Your Practice

Posted by David Grau Sr., JD on Apr 19, 2023 9:57:00 AM

Preparing to Sell Your Practice

The vast majority of today’s independent advisors only consider the option of selling to a third-party when it is time to retire or significantly throttle back as a last resort. Many advisors prefer a path with internal successors that allows them to exit gradually while building a strong, sustainable business. Many of these same advisors, however, come to realize too late that that process takes a fair amount of time, skillful execution, and next generation talent. As a result, a third choice emerges: that of attrition, which for most advisors is less of a choice and more of a default–keep working, enjoy the income, and let the practice slowly wind down if no better option emerges.

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Topics: Selling Your Practice

Tips for Increasing Firm Value

Posted by FP Transitions on Apr 11, 2023 10:00:00 AM

 

Blog - Tips for Increasing Value 16-9

You invest a substantial amount of energy into running, growing, and evolving your business. Knowing when, where, and how to best direct your efforts could mean the difference in thousands, or even millions, of dollars long-term. Having spent two decades accruing and organizing essential datapoints on more than 15,000 businesses, we’ve got a tight grasp on what matters most at each step of the way.

Depending upon your goals, certain areas will move the needle faster than others. Rather than guess at the best use of your limited resources, our team has compiled a list of places where your ownership and C-Suite team can start assessing opportunities for increased firm value.

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Topics: Selling Your Practice, Business Growth, M&A, Revenue Strength, Business Value, Revenue Sharing, Multiples, Benchmarking, Valuation & Appraisal, KPI