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Changes, changes, changes. You can*t pick up a Wall Street Journal on a given day without finding that one company has been bought by another. Most of the time you can*t pick up one of the trade magazines in our business without finding that an independent broker-dealer has been bought by another independent broker dealer or an RIA has been bought by another RIA.

All this activity has to make you wonder: Why are all these people doing this? Are they trying to get their equity out of the business? Are they trying to preserve their businesses for a loved one? Are they trying to derive some economies of scale and some synergy by joining forces? Are they trying to gain some strength to protect themselves from the competitive onslaughts that are coming from every direction in the independent broker dealer, financial planning and investment advisory arenas? Yes, probably all of these reasons and many more.

Your independent broker dealer has a business. Do you? Maybe you do. Maybe you don*t. Maybe you just think you do! Maybe you*re wondering what you should be doing with this work area to which you report to every morning, this gaggle of clients that depends on your every move, these employees who support you on a day-to-day basis. Maybe you*re tired and want to slow down. Maybe you*re just burned out from dealing with the everyday hassles. Maybe you*re excited about your work and want to see it grow. Maybe you*re looking for a sensible and profitable exit strategy. Whatever your scenario is, start thinking about your practice and make a conscious decision about whether it is positioned the way you want it to be. Don*t be caught up in *The B Myth.*

The B Myth is my terminology for the situation where a broker, financial planner or investment adviser is under the illusion that he has a *business* when in actuality all he really has is a job. As John Bowen, a senior consultant in this area, says, *If you build a system which revolves around you, it is difficult to transfer the business to anyone else. You own a job, and it's hard to sell a job.* Yes, I know. When you went in the financial services business someone told you that *you were in business for yourself, that you were building something for yourself.* In truth, that's what you may have done -- built something for yourself -- which nobody else wants because it has little or no value to anyone but you. Beware the *B Myth!*

Some of you may be asking yourselves, *Haven*t I heard of this B Myth before?* Well, actually my concept is borrowed from one outlined by author Michael Gerber in his best-selling books, The E Myth and The E Myth Revisited and applied to our industry. The sad fact is many financial planners and financial advisers with independent broker dealers are suffering from the illusion that they have a business. In fact, what they do have is an unreliable stream of income, a lease, some employees, a group of clients, some commercial software, and some fixtures and equipment worth only 25 cents on the dollar.

The reality is this: The stream of income is a mixed bag of financial planning fees you generated, commissions you generated, and a slice of RIA fees that is growing slowly and is dependent upon your efforts to sell the client on this way of doing business. Your assistants or employees may not know what to do unless you are around to tell them and might scatter to the wind if they thought the business was for sale. Your clients think you walk on water because you have convinced them that you are what is indispensable rather than the advice they receive. In this scenario, hopefully you have been a good saver because there will not be much equity in your *business" to sell.

Have I given you some food for thought? If so, here are some of the things you can do to make your *business* more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let's call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:

* Accept the fact that making your business attractive to a buyer and building value normally takes some time: Time to streamline operations and build teamwork among staff; time for you to aid in the transition of clients after the business has been sold.

* Don*t make your clients suffer under your own *myth of indispensability.* Being indispensable leaves your clients vulnerable when you are gone -- for any reason. Instead create systems within your office that deliver whatever you deliver in a consistent way regardless of whether you are there or not. That's what successful franchises do.

* Understand that a knowledgeable potential buyer is looking for a documented stream of revenue over a period of time. Different revenue streams have different values. Commissions and one-time fees have much less value than consistent, annual investment advisory fees or consistent mutual fund trails.

* Valuing your business can be tricky. First ask yourself what you would reasonably pay for what you have. Then consult with a professional. Mark Tibergien of the management advisory services of Moss Adams, LLP in Seattle stresses the importance of *free cash flow* as a valuation measure -- net profitability of your business adjusted by fair market compensation for you and any other principals. To prove profitability and determine free cash flow, you have to keep good records. Knowledgeable buyers will normally ask for two to three years of records.

* Qualify your buyer: Does the buyer's personality and style fit your clients? If a buyer scares the clients, they will leave and your ability to maximize the value of your business will be limited. Does he have the money to pay (cash and good credit)? As John Bowen points out, *Make sure that you are not taking all the risk in the transaction.*

Falling victim to the *B Myth* is easy to do but also avoidable with some awareness and planning. Do you want to own a *business* rather than a *job*? Then do what Michael Gerber suggests: Think about your practice as if it were the prototype for a network of 5000 outlets. At McDonald*s, the franchise owners don*t flip the burgers, but the franchises have tremendous value because they have installed the systems that turn out a very consistent product or service in the absence of the owner. Something for you to consider!