As more and more financial advisors transition to independence, they often cite higher payouts, better support from a new broker/dealer, and the ability to operate their business as they wish as the reasons for making the move. However, one huge advantage that shouldn’t be overlooked is the ability to build a successful business that can eventually be sold.

Is selling your business part of your succession plan? If so, it’s important to increase the value of your business, starting today. While AUM will play a big part in the valuation of your business, here are a few additional things you should consider that can help you get top dollar for your practice.

What is your recurring income? Keep in mind that this can be affected if your clients are mostly 65-years-old or older, and you have no plan in place for replenishing your client base as you lose elderly clients.

How actively are you servicing your clients? A client isn’t really a client unless you have built a strong relationship with them, and you are confident they will stay with you through thick and thin. Can you show a potential buyer that you are meeting regularly with your clients and have an in-depth knowledge of the issues each client faces? Can you show that your clients depend on you to help them reach their financial goals?

Do you have a high percentage of affluent clients?  Remember the Pareto 80/20 Rule. Eighty percent of your revenue usually comes from 20 percent of your clients. Give your top clients more attention and better services. Let them know that you appreciate them. Increase the number of clients who fall in the “affluent” category.

Have you built your business on your personal reputation alone? If so, you may have a harder time selling it. Make sure you are building name recognition for your business and the services your “team” can provide. Increase interaction between clients and other members of the team. By doing this, clients are less likely to leave when you are no longer part of the picture. Rate yourself on each of these points to determine how you can continue to build the value of your business until the day you decide to sell.