As businesses evolve they tend to move into a structure where value is attached to individual books rather than to the entity as a whole. To avoid this you need to set up a structure that is a business unit instead of just an accounting conduit. This webcast explains how improper structure can be dangerous for the ongoing growth of your business.
Building your business the right way is an important element to ensuring sustainability. Unfortunately, there are key elements many business owners forget to take into consideration – including compensation structure, equity pathways, cash flow, and entity set-up.
In this webcast we explores the differences between revenue strength and enterprise strength, and how each contributes to the value of your business. We explain how paying consideration to factors that drive both the cash flow and equity value of your business will keep your exit planning options open down the road.
FP Transitions President & Founder, David Grau Sr., JD, dives into the three pillars of a strong advisory business and explores how each one is integral to the ongoing growth and sustainability of the enterprise. Working on the foundations of your business is an integral process that both encourages and supports growth in a perpetual cycle of success and profitability.
Whatever the goal, we have found a targeted terminology helpful for classifying and discussing financial advisory enterprises. It allows us to offer tailored advice to each and every client, and to be as precise as possible in addressing different areas of growth and sustainability. These industry-specific descriptions of "job/book," "practice," "business," and "firm" in this post are guides for determining where you are today, where you’d like to be five or ten years from now, and what will be required in the meantime.
In this Roundtable Talk, FPT experts Ericka Langone, JD, and Eric Fettig discuss the details of setting up (or restructuring) your entity to suit your business' unique situation, including: documentation, filing timelines, and key players in the process. They highlight the importance of proper entity elections to support your overall short-term and long-term business goals.
EMS Exclusive Resource
FPT Experts Ericka Langone, JD and Eric Fettig discuss the benefits of proper entity, including liability protections, governance for business leadership and operations, structure and value for future ownership, and tax treatments that make sense for your specific enterprise.
You and the rest of the ownership team have decisions to make about the merger process itself, as well as decisions to make about the business you’ll create. These details should not be left for discovery and sorted out mid-process, but should be understood and planned for before implementing your merger strategy.
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Too many advisors focus on revenue strength as the sole measure of their success, but creating and building enterprise strength is just as important for growing value. Maximizing enterprise strength depends on the selection of the proper entity for your business, the proper organizational structure within that entity, and the proper compensation structure for the cash flow of that organization.
Succession Management Exclusive Resource
As you choose the entity structure that’s right for your unique business and move to incorporate properly, one big consideration are the potential taxes that could apply when moving from a C-Corp to an S-Corp. In certain circumstances assets held by the C-Corp are subject to the Built-In Gains (BIG) Tax. This resource explores these circumstances and how to plan for them and their impact on your long-term plans.
Experts Rod Boutin, JD and Ericka Langone, JD explore preparation beyond determining value. They highlight the importance of reconciling the expectations and goals of all parties, the considerations that may warrant an assigned premium share value, and the benefits of a holistic approach to the entire merger process.
EMS Exclusive Roundtable Talk
FPT transactions experts Rod Boutin, JD and Ericka Langone, JD discuss common areas of governance and control that many owners (existing and future) have concerns about during any (re)structuring or additions to the ownership of a financial services business.
Even with all the modern tools of practice valuations and equity management solutions, some financial advisors are still choosing to use revenue splits as a compensation structure and succession plan. As an independent financial advisory owner, this is a poor and shortsighted business decision for several reasons.
When it comes to understanding an "equity-centric" business model the structural details can be difficult to grasp. The parable of ship vs. liferaft will help to illustrate the problems many independent financial advisors face when trying to evolve their structures as they progress from a job to a practice, and ultimately, to a business.
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Recruiting and developing a skilled team of advisors can be a daunting challenge for the owner of a financial advisory practice. Doing that, however, is only half the battle. Once you’ve chosen and trained your next generation how do you hold on to them? How do you keep them from opening up shop across the street? Create an ownership track and make the opportunity available to the best on your team.
Unexpected circumstances forced Floyd to quickly reduce his work hours at his firm, Cornerstone Wealth, from 45 to 20 hrs a week. Too young to retire, Floyd incorporated existing staff into the ownership structure to ensure his business not only survived, but thrived. In this client success story the team discusses the transition and their new ownership mentality.