Building your Small Business into a $10,000,000+ Asset

Jan 9, 2025 | Planning

What if the next 18 months could be the time you transform your financial advisory practice into an asset buyers can’t resist? You’ve spent years building client relationships, managing countless tasks, and doing everything possible to help your clients succeed. But here’s the tough question: if you stepped away today, would your business thrive without you?

The reality is sobering. According to the Exit Planning Institute, 80% of business owners have 80% of their net worth tied up in their business—yet only 20% of those who attempt to sell will succeed. The rest face disappointment because their businesses weren’t designed to attract buyers.

Here’s the good news: it doesn’t have to be this way. Buyers are looking for specific qualities in a financial advisory practice, and you have the power to build a business they can’t resist. Let’s break it down into actionable steps.


1. Build a Business That Doesn’t Need You

Here’s a common story: John, a financial advisor, dedicated 20 years to building his practice. When the time came to sell, he assumed his business was worth a significant amount based on its loyal client base and his hard work. However, buyers placed a much lower value on the firm. Why? The business was too dependent on John’s involvement.

This left John with hard choices: sell at a depressed valuation, work through a lengthy earn-out, or double down on improving the business—right when he was ready to reduce his workload. Ultimately, the lack of systems and scalability forced John into a corner, one he could have avoided with just a few years of targeted improvements.

While this is not an exhaustive list, things like documenting workflows, delegating tasks, automating client onboarding, and empowering his team to take on more responsibility could have helped John. A more concerted effort to implement these strategies would have yielded a significantly higher valuation—and the flexibility to exit on his terms.

Start by systematizing every aspect of your practice. Focus on creating processes that allow your business to operate independently of you. The goal? A scalable, attractive asset that buyers see as a seamless operation rather than a one-person show.


2. Maximize Recurring Revenue

Here’s a statistic that should get your attention: businesses with strong recurring revenue streams are often valued 3–5 times higher than those without. Why? Buyers crave stability and predictability, and recurring revenue delivers both.

In the financial space, everything should have a recurring revenue component. Financial planning fees, retainer agreements, and insurance renewals all contribute to predictable income streams. If your revenue depends heavily on commissions or transactional fees, it’s time to make a shift.

Think about it: a practice generating $500,000 annually in recurring revenue is far more valuable than one generating $1 million in inconsistent commissions. Buyers see recurring revenue as a sign of reliability and growth potential. The higher your recurring revenue, the higher your business value—and the smoother your exit.


3. Address the Value Gap

Do you know what your business is worth today? If not, you’re in the dark. Many financial advisors overestimate the value of their practice, only to face a harsh reality when it’s time to sell.

The “value gap” is the difference between your current valuation and the valuation of a best-in-class practice. For instance, just suppose the average financial advisory firm generates a multiple of 2.5–3 times EBITDA. Firms with strong recurring revenue, scalable systems, and a robust team could command multiples of 5–7 times EBITDA—or more.

These numbers aren’t guarantees but rather an illustration of how building a best-in-class business can significantly impact your valuation. Start closing your value gap today by identifying weaknesses in your operations, revenue streams, and client retention. Small, intentional improvements can lead to a significantly better outcome when it’s time to sell.


4. Master the Eight Primary Value Drivers

Your business’s value depends on eight interconnected drivers: planning, leadership, sales, marketing, people, operations, finance, and legal. Each of these areas must work together seamlessly to create a business that’s not just functional but exceptional.

At our academy, we teach financial advisors how to leverage these eight value drivers to double or even triple their valuation in as little as 18 months. Whether it’s creating a leadership succession plan, building a marketing system that works without you, or optimizing client onboarding, every improvement adds to your bottom line.

Curious about how these value drivers can transform your practice? Schedule a FREE Strategy Call with us today to explore how our proven framework can help you achieve your goals.


5. Think Like Your Ideal Buyer—or Your True Client

When preparing your business for sale, it’s essential to think like your “true client.” Your buyer is the ultimate client of your practice—the one who will take it over and write the check. What does your ideal buyer want?

They want a business that’s scalable, profitable, and easy to operate. They want clear systems, a strong team, and recurring revenue streams. Put yourself in their shoes and ask, Would I buy this business?

Start building for your ideal buyer now. By designing your practice to meet their expectations, you’re also creating a more efficient, profitable business for yourself in the meantime.


The Bottom Line: Build Freedom Into Your Business

Building a business buyers love isn’t just about the exit—it’s about creating freedom. Freedom to focus on what you enjoy most. Freedom to take a step back when you need to. Freedom to unlock financial independence when the time is right.

Statistics don’t lie. Most financial advisors won’t achieve the exit they dream of because they don’t take the necessary steps to prepare. But you can be the exception. With the right strategy, you can build a practice that’s not only sellable but irresistible.


Ready to Make the Next 18 Months Count?

Imagine transforming your practice from a demanding job into a scalable, sellable asset that buyers compete for. Whether you’re five years from retirement or just starting to think about your exit, now is the time to act.

Click here to schedule a FREE Strategy Call and learn how to build value, scale your business, and create the freedom you deserve. Let’s make these next 18 months the turning point for your financial advisory practice—and your life.