Why Buyers May Not be Interested in Your Practice

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Financial advisors in their late 50s or 60s may be getting attention from would-be suitors. If buyers are courting you, perhaps you can sell your practice on your own schedule and terms. And why not? Valuations for financial planning practices are at all-time highs; consultants tell me there are 50 buyers for every seller.

However, having 50 experienced buyers lined up to buy a practice isn’t reality.

Usually, the number of experienced buyers is two or three. As someone who has completed transactions and has walked away from a number of others, getting a deal done is more complex than putting out a “for sale” sign.

Consider the buyer’s point of view

To get the highest value, consider the buyers point of view.

While the seller walks away with a check, the buyer assumes the risk and work associated with onboarding the acquired business.

A buyer will pay a premium for a practice with less risk and less work.

Regardless of whether your sale is strategic, out of necessity, or due to retirement, how will buyers evaluate what you are selling?