As you get ready to sell your advisory firm, the most important thing to do is to get your house in order. If you are years from selling your practice, you should focus more on maximizing its value. Working closely with a business broker for advisory firms San Diego recommends will help you cover every aspect of your business and avoid mistakes that can keep you from selling. In this post, we will be focusing on the steps you have to take when getting your advisory firm ready for sale.
Determine the value of your firm
The source of revenue for an advisory firm can impact the sale price drastically. If your firm has recurrent revenues, it will have the highest value. Commission-based firms bring a lower sale price. However, irrespective of the structure of your firm, an independent business broker for advisory firms San Diego trusts will be able to perform a business valuation and an appraisal. It is always good to learn about the value of your firm while you still have plenty of time to make adjustments.
Decide if you want to transition internally or externally
Your business broker will ask if you want to sell to an unrelated third party or an internal advisor. Each of these two options has its pros and cons. Identifying the primary goal of selling will help make a more informed choice. For example, selling to an unrelated third-party will be ideal if you want to get the highest sale price. However, if you want a seamless transition for your clients, an internal advisor or family member will be the perfect buyer.
Focus on building an enterprise, not a practice
One of the reasons many advisory firms fail to sell is because their success is tied to the owner. Once the owner departs, the practice may fail. As a result, buyers stay away from firms that depend too much on the owner. To prove to potential buyers that the momentum of your firm will not dwindle after the transfer of ownership, you need to create a management team and outsource technology to build a strong structure that encourages buyers to trust your firm’s growth projections. Your firm must also focus on its most profitable activities.
These three things will make it easier for you to sell your advisory firm in San Diego. However, while you may feel competent to sell independently, you should consider that selling a business is a whole new animal. It is nothing like running your firm. That is why you should consider enlisting the help of an independent business broker for advisory firms in San Diego to handle the sale.