SUCCESSION PLANNING – KEEP CLIENTS INVOLVED

Your clients helped build your business, so don’t forget to involve them when you come to sell.

There are many things to consider when selling your business, but two key ones are valuation and client relationships – both impact one another.

When negotiating the value paid by a buyer the traditional payment structure is 50% up front followed by 25% payments at the end of years one and two. These deferred payments will have caveats attached and depend upon good client retention post sale.

Because of this, it is important that your clients are involved, and that you consult and communicate your plans. This has two main benefits. Firstly, it should strengthen client relationships and, secondly ensure the valuation you expect is paid.

Clients that understand your plans and motivations will be more likely to stay with the acquiring business post deal. Being transparent will increase the trust your clients have in you and the new firm. It also gives you the opportunity to communicate and reassure them that you have found a firm with similar values. One which will look after their interests as you have done. This will reduce anxiety for your clients and support the clients’ transition to the new firm.

The above will take time so start early. Create a detailed transition plan outlining timeframes, responsibilities and communications. Consider segmenting your clients tailoring the approach to different clients. These communications need to be positive stressing the time and effort you have put into finding a successor who will provide the continuity of service the clients need and expect. Focus on what the clients will be gaining rather than losing from the new firm.

Remember that selling your business is not just a significant event for you but also your clients who have relied on your support and guidance for their family’s financial goals.

Our Succession Planning Service can help you find like-minded acquirers who have a similar approach to you, and which will help with the continuity of service. If you would like to know more about what we can do to support your succession plans, we would be happy to help.

If you would like to discuss the above or any aspect of the selling process please do get in touch, successionplanning@integrafin.co.uk.

 

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