Developing a succession plan is a great tool to ensure your business continues to grow while you eventually work less and begin to realize the value of your business. But, a key piece of developing a plan for you and your business is having the right successor. For some, this person may be an existing employee or junior partner, but for the majority, the solution is to find a peer to sell the business to. The sale often involves a long-term gradual work-out period providing you with an exit strategy that lets you leave your business on your terms. So, where do you find a succession partner? And how can you do it with paying a hefty commission to a broker? Read on.
Putting your deal together on paper can be complicated, but finding the right partner/successor to transition your business to shouldn't be. In most cases, the best solution for advisors looking to retire in the next 1 or 5 years is to find a peer to team with, and ultimately transition the business to. Working side-by-side, you can gradually leave the business on your terms and timeline knowing your clients are in good hands. There are many buyers/successors interested in acquiring/partnering with you and your business. But finding the right partner is critical, and doing so cost effectively has historically been a challenge. With so many buyers in the market you should not be paying a commission to sell your business unless the firm you are working with is acting as your advocate. In other industries, where finding a good buyer/successor is more difficult and you need a broker to create a market, the traditional business brokerage model makes sense. However, in an industry with 10 or 20 buyers for every seller, this is a cost that most buyers will be willing to share in. As an advisor with trusted relationships, you should not need or want to auction your practice off to the highest bidder. You do need someone to help create a market of qualified candidates, screen the candidates based on your criteria for a perfect match, setup introductions, help you negotiate the best deal and then help see the deal through to completion.
Succession Resource Group has been retained by qualified advisors that are looking to partner with retiring advisors. These advisors have the infrastructure and financial resources to help ensure you get a great successor team and good value/terms.
So, the take away - if you are considering selling your business in the next 5 years, call us at 866.275.3165. We will talk about you and your business, then introduce you to successor candidates.
