Emily Clarke

ADDRESS : California, Bell Gardens, CA 90202


3 Signs You Should Sell Your Financial Planning Business

Are you considering stepping away from your financial planning business? There are many reasons to think about selling. Your business may be approaching its peak value, or you're ready for a career change. Whatever the case, timing is crucial.

The goal is to sell strategically to maximize the purchase price. In this guide, you'll learn how to sell your financial planning business and identify the signs that it's the right time.

You Have a Wealth of New and Young Clients

One mistake many business owners make is selling when they no longer acquire new clients. The idea is that you'll slow down and sell when you think your company reached its peak value. But in reality, many sell when the practice is in decline.

It's important to remember that your client's lifetime value decreases as they age. The assets under management shrink over time. Therefore, your business value drops.

The best time to sell is when you're actively acquiring new clients. You want to show potential buyers that your business is still valuable and that the potential of rising revenue projections still exists.

You Want to Cash in While Still Working

Want to know how to sell your financial planning business without retiring? You do a sell-and-stay. Contrary to popular belief, you don't have to wait until you're ready to retire to sell. By that point, the value of your business may be lower.

Instead, consider doing a sell-and-stay model to sell your business when there are rising revenue projections. With these sales, you can monetize now and hold off on retirement for a few years. You can keep working and serving your clients for however long you want. But because you optimized the timing of your sale, you can get the most bang for your buck now.

The Sales Multiples are Just Right

The best time to sell is when your sales multiples are high. Many business owners calculate sales multiples based on gross revenue. But when you're thinking about selling, you should take expenses and ordinary income tax into account. Doing so may show that the sales multiples are higher, ranging from four to five times net income.

Author Resource:-

Emily Clarke writes about RIA and wealth management for financial advisors and more. You can find her thoughts at financial planning blog.

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