Maximising the Sale Price of your Planning Business - in changing times

Business Brokering Monday 14th of January 2019

Now that the Financial Services Royal Commission final report has been handed down one thing is clear – the way Financial Planning and Insurance Businesses are traded in the market place will change.

Already the main providers of funding for these businesses have made significant changes to their lending guidelines which will limit the availability to finance for the sale. 

Which is a problem for sellers, because sellers need buyers – and buyers need funding. So, is the lack of funding a deal-breaker?

Perhaps not. The key for many practices may lay in broadening their view of the transaction, and in considering options beyond a simple sale of business. 

Sale of business is certainly the simplest answer – which is to say that it is simple in concept, though often very tricky in execution. The all-or-nothing nature of a business sale often makes for fraught negotiations, complex terms and transitions, which a prospective vendor should always keep in mind when setting expectations.

But what are the alternatives? 

If a conventional business sale is not feasible a vendor may consider the following possibilities:

  • Equity Partner Appointments – in which you can share your workload to shift work/life balance, while also taking some money off the table. Having an equity partner in the business also allows for a gradual and controlled transition for your clients – plus, it can be an opportunity to add new skill specialisations (and possibly even new service offerings) to your business, without needing to take you offline for retraining.
  • Business Merger – In real terms this is often a close cousin to a business sale, but it differs markedly in terms of expectation and mindset. Done properly, a merger with a suitable firm will strengthen both parties.
  • Joint Venture – There doesn’t necessarily need to be a transfer of equity or merging of management in order for two complementary firms to work more closely together – often it’s enough to set up the processes that allow for natural synergies to emerge. This kind of cooperative arrangement can be a good springboard for a future merger or equity transfer, too.

The bottom line is this: when you’re dealing with an issue as important as the future of your business and the protection and growth of your business equity, you need to know and consider all the options on the table.

It’s well worth your time to consult with experienced and qualified professional.

If you’d like to chat more about the option that may suit your particular situation please contact Mark Witt CA at 1300 722 452, or email or click here to book a call

Mark Witt CA

Mark is the Head of Brokering at Business Exchange with over 20 years experience and 400+ completed transactions

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