Debunking the Top 4 Exit Planning Myths
DEAR ADVISORS,
Exit planning not only helps your business while you are in it. It’s also the best way to leave the company on your own terms! So why is it so hard to get started? We’ve debunked the top 4 myths advisors believe about succession planning.
When it’s the right time, it’ll happen naturally.
It’s unlikely that you, the buyer, and the business will be ready to exit at the same time. Preparing your firm to sell will put you in the best position to negotiate a good price even if it’s a few years earlier than you expected.
Finding the right buyer doesn’t usually happen on the first try. It’s good to get in the habit of keeping your eyes and ears open and informally talking with prospective buyers. This will help you figure out what kind of buyer you’re looking for, and you’ll recognize the right one when you find them.
The business isn’t worth enough to meet my financial needs.
There are two easy ways to resolve this. First, get an updated valuation from a firm like Advisor Successions. Second, update your financial plan, preferably with an objective 3rd party like Ellevate Advisors.
If you’ve done that and the business is not on track to achieve your financial goals, now’s the time to take action. You could implement a number of growth strategies and work with a business coach to achieve your retirement goals. (Ellevate Advisors does this as well!)
I’ll have to work a few years for whoever buys me out.
You have control over your exit strategy. If you don’t want to work for the buyer, you can find a buyer with a short timeline. Also, you’ll want to train your team to run the business without you. If the buyer can easily step into your shoes they won’t need you to stick around.
This is one benefit to sharing your exit plan with your clients. I’ve been surprised to see how transferable the client relationships are. As long as clients know what to expect, and trust the buyer’s expertise, they’re happy with the change!
I’d be bored in retirement and regret selling my business.
You have control over your life. Now’s your chance to rediscover who you are, what you love to do, and who you enjoy spending time with. If this exercise challenges you, consider hiring your own financial advisor to help you figure it out, just like you do for your clients.
One thing is certain - each of us will exit our business someday. We tell our clients about the importance of retiring “to something” and now it’s our turn. Why not make it something to get excited about?!
I’ve been getting to know the team at Advisor Successions and have been impressed by their discreet, concierge service and knowledge about the key players in the industry. They are a great partner at a great price, able to help with deal structuring, financing, and legal documents. If you’re not ready to pull the trigger but want to make sure you’re on the right track, schedule a complimentary call with us at Ellevate Advisors. We’ll make sure you’re on track to secure the future of your family and your advisory firm!
Warm regards,
Brooklyn
P.S.
At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Click here to schedule an initial phone call with our team today or get to know me on my bio here!