The Elements Ironstone Blog

Current news and trending topics for sales and financial industry professionals

Begin With The End In Mind

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Your succession plan should start when you make plans to open your firm.  If you want to create a purposeful life and path for your career, as you start your business think about what your exit game plan will be.  Regardless of being in the midst of success, if you do not have a succession plan, make it a priority this year. 

How should you start the process?  Think of yourself as replaceable and begin to delegate tasks to others.  Other key questions to answer in developing your succession plan:

  • At what time would you like to transition out?
  • Who will you sell to?
  • When will you make the transition?
  • How will all of these work together?
  • Are annual recurring revenues growing over time consistently or are they up and down and somewhat volatile?
 

Predictability is the preference in appealing a buyer to your firm.  Higher net cash flow and higher recurring revenue will give your firm a higher valuation. 

How long should an exit take?  Each firm is different, however, it can take months to years for the entire succession process.  When pursuing a sale the following steps can take 1 to 2 months per step and are critical in successful succession planning:

  • Preparation
  • Marketing
  • Negotiating
  • Due Diligence
  • Final Transaction
 

 Other considerations to include in your succession plan:

  • Prepare your team & your clients. Make sure your clients will receive the same level or better quality of service that they are currently receiving.
  • Train your clients so they are used to you being out of the office.
  • That the buyer can have a profitable practice.
  • That you will be compensated fairly for your practice.
  • Look for businesses that are compatible with your firm.
  • Is the business a fee-based or commission-based firm?
  • Is the firm financial-planning based or investment-management service based?
  • What is the firm’s client service philosophy?
 

As the owner of your firm, you are sure to be experiencing feelings of loss of control, loss of significance and grief.  Be aware that your team is experiencing an elevated pressure of anxiety if you leave them in the dark.  It is vital to communicate the tactics of your succession plan to your team.   

Purposeful planning is key to the entire succession planning process.  “One of the best things you can do is to work ON the business not just IN the business.”

 We want to hear from you!  Is your succession plan in place?

Contact us for assistance in following the proper steps needed for a successful succession plan.

 

Follow us as we explore each of Ironstone’s Fundamental 4™! 

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

You won’t want to miss our next in the series:  Business Development- Branding & Value Proposition-Does Your Firm Have A Value Proposition?  Learn How To Create A Unique Value Proposition For Your Firm.

 

 

 

 

 

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Author: Andrea Schlapia

Over 20 years of experience in the financial industry and thousands of business professionals • Founder and CEO of Ironstone, • Certified Myers-Briggs Master Practitioner, performance culture and sales communication strategist • Certified Executive Coach through Coach U • Dynamic and entertaining keynote speaker at national conferences, breakout sessions and “lunch and learn” events • Motivating and real-world tactics delivered through value-added programs for Wirehouse, Independent and Banking channels • Accolades for the highest program evaluations and continuous return-speaking requests. • Dedicated to inspiring people to achieve bottom-line results for sustainable change: Andrea works with entrepreneurs and business professionals from various fields, striving to find and fill the gaps of each practice entrusted to Ironstone's care. Email Andrea with your practice management questions: info@ironstonehq.com

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