Assess Your Business

An objective assessment of your business will help you determine the starting point for a transition that honors your commitment to your organization and stakeholders while helping to deliver maximum value. Areas to consider include: strategy and vision, employee capabilities, financial and legal matters.

Strategy and Vision

A firm’s strategy and vision help guide the organization and bind employees with a common goal. It encompasses a variety of topics related to why you’re in business, your ideal clients and the services you deliver. Consider:

Culture and values

  • What are your firm’s core values?
  • What kind of culture have you created for your clients and your employees?
  • Are your values and culture reflected in the way you handle clients and employees?
  • Do employees understand and embrace the values you want to project?


  • Who are your ideal clients and what are their unique needs?
  • What is the average age of your clients?
  • What is the typical account size?
  • Are your clients still accumulating wealth?
  • Do your clients have money elsewhere?
  • Can they refer additional clients to you?
  • Who owns the client relationship and how transferrable is the relationship?
  • Do you have a process for transitioning client relationships?

Products and services

  • How does your firm meet the distinct needs of its ideal clients?
  • What products and services does your business offer clients?
  • How does the firm charge for these services?
  • Are there services the firm would like to offer but are not currently offered?
  • Are there any capabilities lacking that could be added to provide optimal service?


  • Who are your competitors?
  • How do competitors view you in the marketplace?
  • Are they a threat to your business?
  • Where are you vulnerable to competition?

Governance and oversight

  • Who is responsible for activities within the firm? Consider operations, marketing and sales, compliance, strategy, finance and legal, human resources, and technology.
  • Are there clear roles and responsibilities within the firm?
  • How will your governance structures be affected in a transition?

Employee Capabilities

Mapping your employees’ skills and experience against the firm’s future strategic business needs can give you a sense of whether you can tap your existing staff for successors or if you need to look outside the firm.

Some considerations for evaluating employees

  • Are certain employees potential candidates to eventually run the business?
  • Do employees have experience in financial management? Employee management? Proficiency in operations management?
  • Do certain employees have the ability to interact with clients or easily establish rapport with clients?
  • Do certain employees have the ability to market the firm’s capabilities and develop new business?
  • What skills do employees need to grow into a leadership role?
  • What are your employees’ career goals?
  • Do you have a system and process to evaluate employees and increase their responsibilities?
  • Do your employees want to own the business?
  • Do employees have the financial means to buy in to your business?
  • If your employees cannot develop these skills or do not want to own the business, can you recruit and train people capable of running the business in a timely fashion?
  • What reward and retention programs are currently in place for key employees? General employees?

Financial and Legal Matters

Reviewing your financial and legal positions can provide information important in analyzing different options, such as attractiveness to buyers, or the ability to finance firm growth and expansion or equity purchase by new partners. Consider this partial list:

Balance sheet

  • What is your current capital structure—debt vs. equity?
  • Do you have equity concentrated in one or a few owners?
  • What liabilities does the business have?
  • Are there any liabilities that have not been recorded?
  • How much working capital does the business have?

Income statement

  • Are there any non-recurring revenues?
  • What are the components of revenue—advisory fees, commissions, consulting fees?
  • How consistent are the revenues? Are they predictable?
  • What is the revenue growth rate?
  • Are there any discretionary expenses (personal expenses deducted through the business, spouse compensation, etc.) or extraordinary items?
  • What are direct (variable) expenses and what is overhead (fixed)?
  • Is your partner compensation under direct expenses in line with what you would have to pay to hire someone to do your job?
  • Are there any expenses you will incur after you transition the business?
  • What is your tax position?

Cash flows

  • What is your recurring cash flow?
  • How much have you spent on capital needs—software, processes, technology?
  • How are you using your cash—for growth, distributions or infrastructure?


  • What are you forecasting for growth in revenue, profits?
  • Are your projections consistent with your past performance?
  • What critical changes need to be made to reach your targets?
  • Other Key Performance Indicators (KPIs)
  • What is your client growth rate?
  • Are you consistently bringing in new clients?
  • Is your AUM/client consistent or growing?

Legal matters

  • How is the organization structured?
  • Has the organizational structure been changed?
  • Has a buy-sell agreement been executed and funded?
  • What is the source of funding for the buy/sell agreement?
  • Where was the organization formed?
  • Are there any non-compete and non-solicit agreements in place?

NEXT: Evaluate Your Options