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Valuation

Your purpose, standard, and premise determines your path.

Price ≠ Value Purpose Matters The FP Difference Deriving Value is Complex Get Started FAQ

FP Transitions has a team of credentialed experts and an expansive database that is essentially the industry standard. Our depth of industry valuations ensures an unmatched ability to identify your firm's value. 

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Valuation for every scenario

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Price ≠ Value

Value embodies the economic advantages or benefits anticipated by the holder of a business or business interest. While this might sound textbook-like, in practice, it encapsulates the expected advantages an owner anticipates from their property. Now, juxtapose this with the concept of price - it's not what one expects to receive but rather the cost paid for that expected value or benefit.

Purpose Matters

Our team adopts a personalized approach to discern your valuation intent, recognizing its significance in evaluating your business. We provide advisors with a range of resources, from turnkey and cost-effective options to concierge support, collecting a wealth of data points. We emphasize the importance of understanding the "why" behind your valuation needs. Whether you're pursuing a current market value for M&A, internal succession, or other crucial business objectives, there's a tailored approach for you.

A Valuation for Every Scenario

A Valuation for
Every Scenario

When it comes to valuing your life’s work, our team of analysts and experts takes an unmatched approach to getting it right.

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Understanding the
Value of Your Business

Business valuation is crucial for owners aiming to manage equity effectively and create a business with lasting and transferable value.

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Maximizing Key
Drivers For Business
Revenue & Growth

Distinguish between the growth under your control and external factors to obtain a more precise year-over-year success assessment.

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The FP Difference

Deriving Value is Complex

Valuing a business is a nuanced process, intricately woven with complexities. Deriving the true value involves a multifaceted analysis encompassing various factors. Unraveling this complexity requires a keen eye for detail, industry expertise, data, and a deep understanding of the dynamic forces shaping the business landscape. FP Transitions excels in unraveling these complexities, offering the insight, tools, and specialized knowledge required to accurately assess a business's true worth.

Market Value Assessment

Market Value Assessment

FP’s market-based valuation leverages our expertise in industry M&A and our internal database of real sales data of independent financial services businesses to provide advisors with the most probable selling price of their business in an open market transaction. This analysis is ideal for selling a practice, general benchmarking, and estate planning.

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Certified Business Appraisal

Certified Business Appraisal

FP Transitions provides certified business appraisal services matched to your specific business needs. FP’s certified appraisals follow edicts and methods accepted at large in the valuation profession – which matters when the appraisal is reviewed by other professionals or government agencies. Our team performs appraisals for a range of tax and non-tax purposes, including charitable contributions, M&A, succession planning, equity grants, and more.

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Valuation for Lending Purposes

Valuation for Lending Purposes

FP works with industry-leading lenders to independent financial advisors and provides appraisal reports approved for SBA and conventional loans. If you need a valuation of your business to obtain a working capital loan or capital for partner buy-outs or external M&A, FP Transitions can produce a valuation report using an analysis that best represents the business you’ve built.

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Business Formation & Merger Analysis

Business Formation
& Merger Analysis

For individuals forming an ensemble or companies contemplating a merger, FP Transitions' will assess the market value of each individual contribution to the new or surviving entity, either as the market value of a book of business or as the fair market value of each companies’ stock. FP’s analysis includes a recommendation of the equity ownership for each shareholder in the resulting company, analysis of post-contribution compensation for the shareholders, and pro forma projections of the new company’s value.

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Appraisal Review

If you have questions regarding your completed valuation, we would be happy to schedule an appraisal review to go over the report and answer any questions that you may have.

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WHICH SOLUTION IS RIGHT FOR YOU?

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Advisors Who Trust Us

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    Star Star Star Star Star

    FP Transitions' thoroughness, attention to detail, and professionalism deeply impressed us, offering invaluable insights into our business's worth and potential. They displayed a keen understanding of our business, which allowed them to translate the nuances of our business to a practical valuation. We're genuinely appreciative of FP’s analysis, which has greatly enriched our perspective and set a solid foundation for our strategic decisions moving forward.

    Taylor J. Whelan, CFP®

    Partner | CFO | Investment Advisor, Whelan Financial

  • Star Star Star Star Star

    FP Transitions proved exceptional in handling our valuation and financial analysis. The meticulous fact-finding inspired confidence in their grasp of our financial landscape. Their invaluable expertise in the Northwestern Mutual system streamlined the information transfer, saving us time and effort.  FP’s use of proprietary models made things easy to digest and alter potential outcomes. During the valuation, they balanced detailed insights with high-level explanations. We highly endorse FP Transitions for their proficiency and eagerly anticipate future engagements for additional equity partner conversations.

    Andrew Gillespie

    Pathfinder Wealth Partners

Frequently Asked Questions

Is price the same as value?

The asking price of a listed practice is based in value, but they are not the same thing, and are often not exactly the same number. Value is the economic advantage (or series of benefits) that the business holder expects to receive. Price is the actual cost paid for that value.

 

Value is assessed by a credentialed professional using one of three standards and methods based on the purpose of the valuation. A variety of factors are considered and weighted depending on the purpose and circumstances of the assessment. Businesses valued for the purpose of a sale have a predictable set of metrics and consider the market and demand.

 

Price is ultimately decided upon by the seller–though often under the guidance of an M&A consultant. The business valuation helps a seller set the asking price for the business, but considers other factors as well including personal attachments, anticipated deal terms, and the seller’s preference.

What’s the difference between Fair Market Value and Income-Based Value?

These are two of the common standards used to value a business and the two that are most appropriate for financial services firms. Determining which is applied to the valuation assessment depends on the purpose of the valuation. The method then helps the assessor to determine the perspective and premise of the assessment to zero in on the most accurate value for each business. Fair Market is commonly applied to businesses who are preparing to sell their business or are generally monitoring value to gauge growth. Income Based valuations are most commonly applied for the purpose of investment like internal succession and mergers.

 

Find out which valuation is right for you. Schedule a Consultation

How do you determine value?

The FP Transitions team of accredited and industry-specific valuation experts determine business value based on a variety of factors which are assessed and weighted depending on the purpose of the valuation. The purpose of the valuation dictates the method and standard used, from which the assessor can determine the perspective and premise of the assessment to zero in on the most accurate value for each business. FP Transitions valuations consider up to 155 business metrics and rely on a database of over 16,000 valued businesses and transactions to support the final opinion of value.

Can I just use a multiple of revenue/EBITDA to determine my value?

Using a multiple of either revenue, EBITDA, or any other metric is an extremely inaccurate way of determining the true value of a wealth management or financial services business. Applying a multiple does not consider the reason for the valuation, unique circumstances, or who the value matters to and why. Using a multiple can lead to money lost, missing out on financing options, and costly, late-stage transactional disputes.

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