How to Build a Strong Succession Plan

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Success is determined by planning. There are essential actions that entrepreneurial financial advisors must take to accelerate firm growth. A fundamental step is to plan for business succession. While growth and succession can be accomplished using a DIY approach, there are benefits (professional and personal) that come with working with a strategic partner to achieve those goals.

Entrepreneurial advisors want to build and lead a successful business and should employ the best and most efficient use of their limited time and resources. Advisors should contemplate what provides them the most energy and/or satisfaction. Is it being an advisor or running a business? As a financial advisory practice grows, firm owners often find themselves working in too many low-impact areas of their business. They must explore solutions that will help them with business planning and an appropriate end goal in mind.

Prioritize people when looking at succession

When advisors are running a practice, the people component is often not prioritized. Both the owner and the successor get too caught up in the valuation and multiples and do not spend enough time considering how the various succession solutions will affect their clients, employees, and even the seller. Owners should not just look to sell to the highest bidder. They should carefully analyze the cultural fit and ensure that the successor will maintain a similar client experience. Then, they can work on the math and to achieve the best outcome.