Buying, Selling, and Valuing Financial Practices

Foreword xi Preface xv For Sellers xv For Buyers xvi Acknowledgments xix Chapter 1 The Basics You Need to Know 1 Avoiding the Critical Mistakes 1 Valuation: The Great Debate 4 Assessing What You Have Built (or Are Acquiring) 6 Who Is Selling? Transition Strategies by Ownership Level 11 Overcoming Attrition: Public Enemy No. 1 14 What Is Being Sold? 17 Organizing the Marketplace 20 Exit Plans versus Succession Plans versus Continuity Plans 23 The Planning Continuum 28 Chapter 2 Value and Valuation Fundamentals 31 An Overview 31 What Creates Value? 33 Standards of Value 35 Valuation Approaches and Methods 38 The Rule of Thumb Method of Valuation 46 Application of Standards and Approaches 48 Making Sense of It All 51 Who Is Qualified? (to Offer an Opinion of Value) 53 Valuations for Bank Financing 54 Chapter 3 Solving Valuation 57 The Blue Book Standard 57 Lessons Learned 58 A Value Calculation 60 How It Works 61 Recurring versus Nonrecurring Revenue 65 Assessing Transition Risk 66 Measuring Cash Flow Quality 68 Fixing the Fracture Lines 69 The Profitability Issue 71 Chapter 4 Building and Preserving Value toward the End of Your Career 75 1. Get a Position Fix 77 2. Focus on the "M" in M&A 78 3. Obtain a Formal, Third-Party Valuation 79 4. Understand the Impact of Terms and Taxes on Value 80 5. Consider Alternative Strategies: Sell and Stay Opportunities 81 6. Study Reliable Benchmarking Data 84 7. Create a Plan and a Definitive Timeline 85 8. Have a Backup Plan 86 9. Sell on the Way Up! 87 10. Focus on You 88 Chapter 5 Preparing to Sell 91 What's Your Plan? 92 Finding the Very Best Match 95 When to Sell: Timing That Final Step 98 In a Nutshell: How to Sell Your Book, Practice, or Business 101 The Listing Process 107 Making a Quick Decision to Sell 112 When Selling Isn't Selling 113 Ten Things Buyers Will Want to Know 115 Handling Key Employees during the Selling/Listing Process 116 Letting Go 118 Chapter 6 The Buyer's Perspective 119 A New Direction 119 If at

DAVID GRAU SR., JD, is the founder and president of FP Transitions, the preeminent consulting firm known as much for building sustainable businesses as selling or merging them at the end of a career. FP Transitions has valued over 8,000 financial services or advisory practices and businesses, and consulted on over 1,500 completed third-party transactions. Grau Sr. previously authored the bestselling Succession Planning for Financial Advisors: Building an Enduring Business, also published by Wiley. He has written 90 nationally published articles, white papers, and manuals on complex succession strategies, equity management, business continuity, income-perpetuation plans, and mergers and acquisitions. Grau Sr. was named one of the most influential people in the profession in an industry survey by Financial Planning magazine and is a nationally recognized expert on succession planning and business- perpetuation strategies in the financial services industry.