Ask Yourself These 5 Questions Before You Sell Your Business

Selling your business as a part of your succession planning process is an incredible emotional undertaking. For many independent financial advisors, their business is like another child that they’ve nurtured and cared for as it’s moved through growing pains and become something they can be proud of today. But now it’s time to say goodbye to your business and embrace the next phase of your life. When you are creating your succession plan and considering the sale of your business, there are numerous things you’ll need to consider. These five questions will help you start the process and begin thinking about what matters when it comes to the sale.

Ask Yourself These 5 Questions…

What’s My Business Worth?

This isn’t necessarily a question that you can (or should!) answer yourself, but it is one that you’ll definitely want to know the answer to before you sell. It’s worth your time and investment to hire a professional valuation company to put a price on your business. The financial advisors who run their companies are often too close to the situation to make a good judgment call on how much their business is worth and are in danger of overvaluing or severely undervaluing the business and damaging their chances at a sale. Have a professional firm tell you what it’s worth so you know how much to expect from the sale.

When Do I Want to Sell?

Think about your timeline. If you want to sell your business within the next year, you have a lot of things to do in a short amount of time. You’ll need to prepare the business for sale quickly and ensure you have all of the information that the new buyer will need. If on the other hand, you’ve decided to sell the business in the next five years, you have more time to prepare and can take a more relaxed approach to the preparation. Knowing when you’d like to sell will help you know what needs to happen and when.

What Are My Goals for the Sale?

Be honest with yourself about what your goals are in the sale of your business. If you want to make sure you get a sizable addition to your retirement nest egg, be prepared to hold out for the best offer. If you decide that your goal is to get out of the business as quickly as possible, though, then you may want to consider smaller cash offers that can move the process along quickly. There are no right or wrong goals for the retirement of a financial advisor; just make sure you know what your goals are before you begin.

Is My Business Ready to Run Without Me?

A business is ready to sell when you could step out of the picture without creating a huge fuss. That’s a tough point to get to when you’ve been a vital part of the business for so long. But for a financial advisor, though, it’s a necessary evil. You have to make yourself unnecessary. Moving items off of your plate and onto others is a good first step. Documenting your processes and vital vendors is another important one. You can work with a professional succession planning business to help you identify what needs to happen in order to help your business carry on without you.

Do I Know All the Ramifications of the Sale?

Selling your business isn’t just about getting a check. There are financial and legal ramifications to selling your business and you’ll want to make sure that you know them all. It’s a smart idea to talk to a lawyer and/or an accountant to prepare whatever paperwork you’ll need and to get an idea of what your tax implications will be. This can make the transition to retirement life easier, too.

Are you ready to retire from your financial advising business? Are you working on the succession planning process? We can help. advisorRETIRE™ has worked with top financial advisors in the industry to help them create a plan that helps them get the most out of their businesses while keeping their clients’ needs as a top priority. We can do that for you, too. Give us a call or contact us through our website for more information today.