• Prepping Your Practice for the Big Sale 
• Getting Your House in Order
• The Power of a Practice Valuation

After coming off another record-breaking year in 2020 for RIA mergers and acquisitions, 2021 proved to be another strong year in M&A activity — marking the eighth consecutive record-breaking year. In fact, according to a recent report from DeVoe & Co., 2021 finished the year with 242 transactions, a whopping 52% higher than in 2020. 

Our new reality, due to the pandemic, has many advisors thinking that they’re ready for the next chapter of their lives to begin. That means succession plans and the anticipation of the big payday you’ve worked so hard to line up. Whether you’re ready to move on now or you’re thinking it’s right around the corner, you need to be prepared in order to get the most for your business. 

You’ve sacrificed so much and put a tremendous amount of hard work getting your business to where it is today — you not only want to get the most for it, you also want to be sure it moves to the right person and that your clients will be in good hands. It’s a lot to get done, and taking the DIY approach can result in leaving money on the table, enduring avoidable delays, and not getting the ideal successor.

Here are some critical steps you should be taking that will put your business in the best light for success and help in finding a suitable successor. 

Develop an Accurate Timetable

It’s important to have a clear sense of what your timetable is for retiring. Create a timeline that roughly shows aspects such as, when you want to start slowing down, how long it will take to transition your client base, and when you’d like to be fully retired. If you’re looking to stay on a part-time basis, note when you’d want that downshift to occur. Having an idea of the overall timeline of transitioning outlined will help you stay on track.

Carefully Configure Your Team

Going through a transition is no walk in the park, it takes having the right team to get the most out of your efforts and ensure that you’re staying within the lines. Typically, a transition team will consist of an industry consultant, like 3xEquity, as well as a tax and legal counsel. 3xEquity serves as your advocate, guiding you through the twists and turns of transitioning and helping you find the best successor. 

Secure a Practice Valuation

How can you expect to get the most for your business if you don’t know what it’s worth? Getting a practice valuation before a potential buyer does is a must. A valuation will give you an inside look at the strengths and weaknesses of your business as a buyer may see it, showing you potential areas to work on before it comes time to sell and helping you negotiate. Our online evaluation tool can provide you with quick, reliable, and affordable practice valuation. 

Standardize & Record Your Processes

A great transition is seamless to the point where it doesn’t even appear as if a transition has taken place.  The practices that achieve that seamless transition are often the ones that get the most for their business when it comes time to sell. Some of the keys to achieving that are by making sure your processes are well documented, that all client contact is consistent and that everything gets captured in your CRM system. Organization and conciseness can help to provide greater client continuity in the long run and help put your best foot forward with potential buyers.