Many independent financial advisors will be party to thousands—if not tens of thousands—of transactions on behalf of their clients before they retire, from assembling and managing laddered bond portfolios to executing complex block trades. Ask an advisor how any of these transactions work and most will be able to tell you in minute detail about the mechanics of the trade, key factors that may affect its outcome and its potential benefits for the client.

Yet when it comes to the most crucial transaction many independent advisors will ever undertake—the sale of their own business—these same highly informed, ultra-competent professionals often begin the process with only a cursory understanding of how they can position themselves, their families, their employees and their clients for long-term prosperity through a thoughtful, well-managed sale.

My own experience guiding hundreds of financial advisors through the selling process has shown that sellers can start to prepare themselves for a successful exit transaction by keeping an eye out for some common pitfalls:

1. Failing To Start With Valuation. Many advisors skip ahead in the sale process because they assume they already have a handle on the value of their practice based on industry “rules of thumb.” (The old “2X revenue” chestnut is one that still crops up a lot.) These advisors may move straight to identifying buyers or even performing diligence on a preferred buyer without having a firm grasp of the fundamental question that should underpin the whole enterprise: “What is my practice worth?” Other advisors put off preparing for a sale because they do not know where to begin in order to make sense of such a complex process.

The solution for advisors in both scenarios is the same: selling a practice or business should start with a formal, unbiased third-party opinion of value. This is not something that can be worked out on a piece of scratch paper. It involves serious analysis of the business by professionals who do this for a living. Neutrality, experience and expertise matter in the valuation field just like in the advisory field. Many buyers are experienced acquirers of smaller books and practices, and can easily take advantage of a seller who does not have a clear, data-driven sense of valuation.

Just as importantly, valuation is the starting point for helping sellers map out and consider all their options. Failing to accurately address this key step, or assuming that valuation can be determined by a vague multiple based on snippets of conversation at an industry conference, can be a serious mistake for a seller.

2. Thinking That All Advisory Practices—And All Sale Processes—Are Alike. Many advisors start down the road to a sale without having a clear sense of what exactly they are selling. Is it simply a book of clients,that only exists as long as the advisor is around to do the work? Is it a practice, with rudimentary infrastructure and support staff in place? Or is it a business, with a developed organizational structure, equity-centric ownership and established systems for attracting and retaining talented employees?

The nature of what is being sold makes a substantial difference in how it should be valued and the range of potential buyers that may be interested. It is also a key determinant of the final payment terms, documentation and tax structure of the transaction, and even the spectrum of planning options that will be available for the seller post-closing.

3.     Unnecessarily Limiting The Universe Of Prospective Buyers. Buyers far outnumber sellers in today’s M&A market for advisory practices. Unfortunately, identifying the right buyers and bringing them into a structured sale process can be time-consuming and challenging. With that in mind, many advisors focus on the first offer or indication of interest they receive once they decide to sell, thinking that they may not get another chance.

Buyers are often confident and sophisticated and have the backing of their broker-dealers, while sellers are frequently new to the transaction process. Simply settling on the first offer that comes along because it’s easy can leave sellers vulnerable, and often results in costly—sometimes very costly—mistakes.

4. Not Understanding Financing Options. Financing options for selling a practice have changed significantly in just the last two or three years. Arrangements that were widespread a few years ago, such as earn-outs and revenue sharing agreements, are often not the best choice for sellers today. Sellers may also have opportunities to significantly reduce their risk in a transaction by using the appropriate financing options. Here again, though, such options require the seller to obtain a sound, third-party valuation for the practice at the outset of the sale process.

In many ways, the most common—and most costly—mistakes made by sellers in today’s M&A environment boil down to one strategic misstep early in the process: attempting to go it alone. Selling a practice is often the most important journey a successful independent advisor will undertake in their career, and sellers need a plan, not an idea or a comforting thought, to guide them through it.

By partnering with a strong third-party consultant who understands valuation, transaction structuring, financing methods, post-closing transition planning for clients and the full spectrum of other complex issues involved in planning and executing a sale process, selling advisors can position themselves to realize win-win-win outcomes for themselves, for the buyer and—most importantly—for their clients.

David Grau Sr., J.D., is the president and founder of FP Transitions, which partners with independent advisors to build businesses of enduring and transferable value. The above is adapted and excerpted from his second book, Buying, Selling, & Valuing Financial Practices: The FP Transitions M&A Guide published by John Wiley & Sons in August 2016.