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Preparing for sale: building a plan and executing it

  • Learn how to prepare your business for sale
  • Understand what buyers are looking for
  • Understand what to avoid when selling a business
Preparing for sale: building a plan and executing it
(Reuters/Mike Blake)

As the average age of a financial planner marches upwards, it is not surprising we are seeing more and more consolidation in the market.

Gunner & Co’s recent survey of financial planning business owners saw 76 per cent of respondents state that succession planning was an element of their annual business planning cycle.  

This is extremely positive. Selling your business takes significant planning to maximise the outcome, both financially and personally. And it needs to be done right.

I would recommend you start thinking seriously about a sale around 18 months to two years before starting the process.  

Louise Jeffreys is managing director at Gunner & Co






You would then want to allow a year to execute a deal, from instructing a quality broker to completing the deal and receiving the first payment, and a further year of integration if you are retiring post-sale. 

Setting objectives

As you build out the plan, it is essential at the outset to start with the end in mind. Understanding who the key stakeholders in any deal are and setting clear objectives to meet each stakeholder group’s needs is essential. 

Timing: it is not unusual for business owners to find there are timing mismatches across stakeholders.  

Open and honest conversations are needed, alongside a thorough understanding of opportunities in the market, to identify the right timing.  

It may be the case that one shareholder retires post-sale, while others work on – this is not uncommon, and can be executed effectively when planned for. 

Know why you are selling: this is something that is often overlooked or presumed in the planning phase, however it is essential you are able to articulate effectively why you are selling, especially if you are under 60.  

Buyers always run the risk of you setting up shop a few years post-sale, and can only protect themselves to a limited degree legally.  

Price: typically a key measure of deal success, most sellers have a fair understanding of their price aspiration at the point of sale.  

Understanding how achievable that number is, a few year’s out from sale is essential, while you still have time to impact it.  

It may be that timing has to be pushed back, or you have more clarity on the growth needed to deliver that objective. 

Transaction structure: your business structure will impact the transaction structure. LLPs, sole traders and limited companies all have different sale parameters, and consequently tax treatments, some of which you can influence. 

Exit route: the majority of business owners exit their businesses through a trade sale or merger with another financial planning business.  

However, internal succession through management buyouts and employee ownership trusts may be explored.  

In my experience internal succession is challenging to achieve, and needs planning as early as possible. 

Client proposition: this is where you are likely to have the most ‘red lines’ – operational approaches you either do not believe in or do not think your clients will benefit from.