Most advisors are great at year‑end planning. For their clients.
They harvest losses, rebalance, check beneficiary forms and map out next year’s goals. Then they glance at their own firm’s revenue, assets under management and budget and call it done.
You spend your career telling clients to be intentional about the future, then rush through that step for your own.
Your business is likely the largest asset on your personal balance sheet, so it’s important to treat it like any other investment. You invest for dividends or capital appreciation, and year‑end is the time to ask whether you got both. Did you build a stronger, more valuable, more transferable business than you had 12 months ago? That’s the difference between running a successful practice and building a valuable enterprise.
Questions Your P&L Won’t Answer
Your P&L doesn’t offer a complete picture. Start with these questions instead: Are we growing efficiently? Is revenue growth showing up in stronger margins and better productivity, or are expenses and headcount climbing just as fast?
Then ask the one most owners skip: Are we becoming less dependent on the founder? Could our team keep clients, make good decisions and keep growing if you weren’t in every meeting?
You don’t need to be thinking about selling your business to start thinking like an investor in your business.
It Won’t Happen On Its Own
Founder dependence only wanes naturally if the founder stops working as hard, and even then, only if the firm is ready for it. Reducing founder dependence takes a real succession plan and deliberate delegation of pieces of your job, whether that’s day‑to‑day management or business development.
It also means letting go of the idea that you need to find one person to replace you. In most cases, it’s more viable to replace yourself in multiples. What one person can run at $100 million may take several people at $1 billion. At FP Transitions, our rule of thumb is that for every first‑generation owner, you want two second‑generation owners, and down the road, three third‑generation owners.
Show Me The Data
The thought of giving up any control may sound daunting, but the numbers show a reward when an ownership handoff happens with pragmatism and care. A couple of years ago I studied firms between $100 million and $1 billion in assets to see what separated the more valuable ones. One factor blew the rest away: Multi‑owner firms had a 48% higher EBITDA multiple than single‑owner firms.
From the buyer’s side, it makes sense. Finding, attracting, training and keeping next‑generation owners is one of the hardest things to do in our industry right now. If you haven’t done that work, it becomes the buyer’s problem, and they’ll price it in. Buyers are paying a premium for firms that already have it figured out.
Buyers are paying a premium for firms that already have it figured out.
Succession Is A Long Game
Bringing in a next‑generation owner works best at a gradual cadence. The first stage is like a “dating” phase. Have them work for you for two to five years to make sure you’re aligned on how you serve clients and run the business.
Then sell them a small tranche, 5% or 10%, and give it another couple of years. Owner‑to‑employee is a very different relationship than partner‑to‑partner, and you both need time to see how it works. Going back to my earlier point about business control, at 10%, you can still outvote them on everything.
Multi‑owner firms tend to grow faster, too. When a second‑generation owner takes operations and management off your plate, you get your bandwidth back to spend more time with clients and nurture further growth.
You deserve to harvest the value of the equity you’ve built.
Start With A Baseline
With 12 months of results in hand, year‑end is the right time to look at your firm through the lens of enterprise value, even if you never plan to sell. In three to five minutes, our Estimated Value Index gives you a score from 1 to 100, peer benchmarking and a directional revenue multiple range. It isn’t a formal valuation, but it shows where the upside is. A firm in the mid to upper 90s is near the top of its peer group and will mostly grow value by getting bigger. A firm at 50 could probably get to 60 or 70 just by fixing a few things, without adding a single client.
It isn’t a formal valuation, but it shows where the upside is.
November and December are a great time to set a baseline and revisit it as the firm changes.
Plan For More Than One Version Of 2027
Nobody knows what markets, rates or M&A will do next year. Going into 2027 knowing your economics, your leadership bench and your value will help you make better calls on when to invest, hire, acquire or develop successors.
Pick one opportunity you want to go after next year and one vulnerability you want to eliminate. Then, build a measurable plan around both.
Scott Leak is Director of Business Development and Senior Consultant at FP Transitions.
This article is published under WSR’s partner program and was not written by WSR’s staff or editors. For more information on how to participate in the partner program, contact zack.drew@wealthsolutionsreport.com. Views expressed are the author’s and do not necessarily reflect the views of WSR.
