The Six Steps to Selling Your Financial Planning Business

By: Chris Budd
Ovation Finance & The Eternal Business Consultancy

In my experience, ask a business owner when they plan to sell their business, and you’ll get the answer ‘In five years’ time’. 

Go back next year, and ask the same question, and you’ll get the same answer – owners always seem to be planning to sell in five years’ time.

If you want to get serious about selling, and to prepare the business – and you – for the sale, what are the steps that you could start taking now?

Step 1 – Plant the cherry tree

The old Chinese proverb says, ‘When is the best time to plant a cherry tree? Ten years ago. When is the next best time to plant a cherry tree? Now.’

There are things about your business that you don’t know, challenges that lie ahead you cannot foresee.  If you are serious about one day selling, you need to start now.

Step 2 – Make yourself the least important person in the business

This is arguably the number one priority for every business owner, especially those who one day plan to exit.

There is another old saying that ‘the biggest barriers to growth in the business are the owners’. The bottom line is that, if you want your business to continue beyond you, it needs to not need you.

Step 3 – What kind of exit do you want?

Of course, step 2 assumes that you want the business to continue beyond you (perhaps by selling to management or an Employee Ownership Trust (EOT)).

If you plan to sell to a consolidator or third party, who are mainly interested in the assets under management and maybe a few employees, then much of this article doesn’t apply to you.

There is some middle ground, such as a management buyout or sale to a third party, such as a local firm.

The steps you take now at the beginning of the process should be markedly different depending on which of these exits you plan for. It’s therefore worth spending some time really understanding these options, so that you can make sure your first steps take you in the right direction.

Step 4 – What do you need to sell your business for?

This is the first question I always ask of owners when they get in touch to discuss succession options.

The answer often comes back with a figure. However, it is the word ‘need’ in that sentence which is so important.

in my experience, very few financial planners receive financial planning, and yet this is a key staging point in the sale process. If you need £1m but your business is only worth £700k, then you need a plan to grow the business.

If, however, you need £1m and your businesses is worth £2m, then you have options.

Of course, this process will include understanding the valuation of your business …..

Step 5 – Understanding the value of your business

Let’s get a few things straight about valuations.

  • An offer is not a valuation;
  • Headlines in the trade press about how much a business sold for does not equal how much the owner will eventually receive;
  • What a business broker tells you your business is worth is not a valuation.

I have written about valuations of IFA businesses a great deal. Such as the ‘fish-and-chip deal’ where an acquirer will offer an inflated valuation to’ fish in’ an owner, and then ‘chip away’ through due diligence’.

That due diligence process will weed out genuine factors that would reduce the value of a business. Most notably at the moment, this will include a reduction for defined benefit transfer liabilities.

I have come across one case where a bank refused to lend on a deal because of the existence of defined benefit transfer cases.

The combination of how much you need to sell your business for plus a genuine valuation, is going to be crucial to understanding your timescale in preparing your business for sale.


Don’t be that person who, a year later, says that they still plan to sell in 5 years’ time  – and then suddenly discover that they don’t have five years left, (maybe through ill health, becoming fed up with a business or just wanting to do something else).

Plant that cherry tree today.

The Eternal Business Consultancy runs an online programme for just £300 per month taking owners through everything they need to do to make themselves the least important person in their business.

If you’d like to discuss succession planning, please get in touch with me at

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