Years of grind, rejection, self-investment and self-improvement and more than the customary business liability risks that other types of business owners face…they should all add up to a pot of gold, right?
The reality is that most advisers do little more than create a transferrable income stream. No matter whether it is a fee-based business with renewable client monitoring agreements, or a contractual right to an income stream from a supplier for in-force policies, most advisers contemplating their exit indulge in the equivalent of a business garage sale.
For the buyer it is not even about buying a business. It is an asset strip.
More often than not there is little to no value is placed upon a brand or turn-key business operation for the buyer. They simply wish to strip out the certain cash-flows and walk away from the rest.
There are 4 general areas that an adviser has to be able to deliver to a buyer if their business is ever going to be worth more than justy the discounted future cash-flow of the contractual rights to an income stream. They are:
1. Efficient Operations & Delivery
2. Best-of-breed Advice Processes
3. Strong Prospecting Systems
4. Corporate Brand & market position
You need to create reliable and replicable processes in each of these areas as they are the cornerstones of a great professional services business. An entity that stands for something in the market over and above an individual owners brand and a business that functions efficiently and profitably with or without the founders presence. It is one that has a strong probability of continual new clients and new business opportunities regardless of whether the founder remains in the business or not, and it is one where robust advice and product recommendations have been developed that minimise statutory risks and maximise the probability of happy clients.
To build a business which can be sold for highest possible value requires these 4 components….otherwise it is just an asset strip at a discounted price for future purchasers.
For more great tips on building a valuable business I thoroughly recommend the video (link below) outlining the 7 Deadly Sins of building a financial advice business, by Brian Boggs in Australia – but the tips are truly universal!
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