It's not a question of how much AUM.  More importantly, how much of this AUM will come with you and how much income will it generate?  Do you also have savings?

If you don't have enough income/savings, you'll probably have to do a fair amount of transactional work to survive.

Maybe you could put-off getting an office, for say... 3-6 months or so. That would save you $2,700-$5,400 right-off the bat. Waiting 3-6 months before renting an office would allow you the extra capital to work-out any unexpected "expensive" kinks that inevitably arise during transition.

I don't think your clients would mind you working out of your home, if you told them that you're moving into an office in 3-6 months or so.

Just sayin'.

[quote=feebase?]

That’s all I have for now so please add the many things I am
forgetting.  Also feel free to tell me how stupid/smart I am for
jumping with such few assets.  My average monthly gross is around
12k per month so feel free to bash meand tell me how impossible it
is.  In my ignorance, I think that even with a minimum 80% payout
it is somewhat feasible. [/quote]



How much of your AUM is mobile and willing to move with you? I would
say that the key question is how much savings you have in the bank.
Because it takes about a year for a practice to get up to full speed
again.



In general assume everything will be twice as expensive as you expect,
and take 1.73x as long. You want a margin of safety in doing this.

Definitely forego the office expense until you feel confident financially.  Offices are much more important to us then they are to the people we do business with.  From experience I can tell you it is not that important.

[quote=doberman]

Maybe you could put-off getting an office, for
say… 3-6 months or so. That would save you $2,700-$5,400 right-off
the bat. Waiting 3-6 months before renting an office would allow you
the extra capital to work-out any unexpected “expensive” kinks that inevitably arise during transition.

I don't think your clients would mind you working out of your home, if you told them that you're moving into an office in 3-6 months or so.

Just sayin'.

Yes, rightway, I am serious.

I don't get your point. If your clients suddenly received a notice that you and your team had left ML, and were temporarily working out of your house, would they treat you like the plague?

[quote=doberman]

Yes, rightway, I am serious.

I don't get your point. If your clients suddenly received a notice that you and your team had left ML, and were temporarily working out of your house, would they treat you like the plague?[/quote]

From personal experience, renting a small studio/1BR apartment can be much cheaper than renting an office. By the time you put in a desk and similar decor it can look very professional.

Most existing clients don't care, because its about a personal relationship, not your Aeron Chair.

Rent a studio and get a pull out sofa

[quote=bankrep1]Rent a studio and get a pull out sofa [/quote]

Even better, buy a doublewide bank repo trailer. Convert it to an office. Rent the lot under it. Later, if you don't like the location, slap some wheels on it and haul'er down the street someplace better. 

[quote=doberman]

[quote=bankrep1]Rent a studio and get a pull out sofa [/quote]

Even better, buy a doublewide bank repo trailer. Convert it to an office. Rent the lot under it. Later, if you don't like the location, slap some wheels on it and haul'er down the street someplace better. 

[/quote]

They used to do this in the late 1920s.

[quote=doberman]

Yes, rightway, I am serious.

I don't get your point. If your clients suddenly received a notice that you and your team had left ML, and were temporarily working out of your house, would they treat you like the plague?

I would not consider working out of my house, on a permanent basis.  Because I, like you, feel some of my better-heeled clients would look askance at such an arrangement. However, a temporary arrangement would be overlooked by said clients, in my opinion.

[quote=feebase?]
Rent:                                     900
Phone:                                   170
B/D fees:                                200  -for their basic tech/package
E and O:                                 225
Supplies:                                 120
Postage:                                 100
Equipment (lease & maint)       150
Registration fees         &n bsp;          100  
[/quote]

You need to plan that accounts won't transfer for 2-3 months, so you will need enough income/savings to cover your bills for those months.  You will be so busy trying to get clients to move & marshall everything through, you can't count on having much time to bring in new clients.

You didn't say how long you've been in the business, but with that little in AUM, you need to plan that as little as 50% of those assets will likely follow you -- particularly if you go independent instead of going to another firm with a "name."

Expenses to consider adding:

Your equipment number seems way too low to me:  you'll need a phone system, at least a combined copier/fax/scanner/printer (or you may need a heavier duty copier and heavier duty printer), postage scale, desk & office furniture, computer, PO Box rental, business reply permit (so clients can mail things back to you) -- mine costs $160/year, plus you have to put funds on deposit with the USPS to draw upon.   Depending on your clients, you may need a toll-free phone number and you may want to buy a domain name.   I'm assuming you're just going to buy stamps to use, because postage meters are pretty expensive to lease.  

I may think of some other things, but gotta go now.

[quote=OldLady]

[quote=feebase?]
Rent:                                     900
Phone:                                   170
B/D fees:                                200  -for their basic tech/package
E and O:                                 225
Supplies:                                  120
Postage:                                  100
Equipment (lease & maint)       150
Registration fees         &a mp;n bsp;          100  
[/quote]

You need to plan that accounts won't transfer for 2-3 months, so you will need enough income/savings to cover your bills for those months.  You will be so busy trying to get clients to move & marshall everything through, you can't count on having much time to bring in new clients.

You didn't say how long you've been in the business, but with that little in AUM, you need to plan that as little as 50% of those assets will likely follow you -- particularly if you go independent instead of going to another firm with a "name."

Expenses to consider adding:

Your equipment number seems way too low to me:  you'll need a phone system, at least a combined copier/fax/scanner/printer (or you may need a heavier duty copier and heavier duty printer), postage scale, desk & office furniture, computer, PO Box rental, business reply permit (so clients can mail things back to you) -- mine costs $160/year, plus you have to put funds on deposit with the USPS to draw upon.   Depending on your clients, you may need a toll-free phone number and you may want to buy a domain name.   I'm assuming you're just going to buy stamps to use, because postage meters are pretty expensive to lease.  

I may think of some other things, but gotta go now.