Leave Your Practice by Design (Part 2)

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In my previous article, I discussed the peril of a founder-centric advisory practice when it comes to business valuation. Those firms are generally profitable and have the appearance of success, but buyers don’t find them attractive because they are too dependent on their owners.

In other words, they are not worth much as a business.

This is unfortunate because if you're an owner of an advisory practice, your firm may be the most valuable asset you own. Growing and protecting the value of your advisory practice, and eventually monetizing such value, is enormously consequential to achieving your financial independence. The net amount that you receive after selling your practice will directly impact your retirement lifestyle and your legacy.

Three questions

When you plan for exiting your advisory practice, start by asking three questions:

  1. When will I retire from my practice?
  2. How much income do I need after I retire to live comfortably?
  3. To whom will l sell or transfer my business?