How To Create Successful Agency Succession Planning
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Think of your business as a relay race, and youve just run a great first leg. Now what? Will the next runner drop the baton? Is there even a next runner? Researching, developing and executing a thorough succession plan keeps the relay running forward when you plan to exit the race, or if your exit comes unexpectedly.
We all know that large corporations spend considerable time and resources on succession planning. Remember when legendary CEO Jack Welch retired from GE? There was no mad scramble for the top spot. There was an orderly transition–for GE employees, for GE customers and, importantly, for GEs stock price. GE had a thorough succession plan.
The goal for any succession plan should be to provide the road map for a business to continue as a successful operation in the event of its leaders departure, whether that departure is planned or completely unexpected due to a life-threatening experience, such as a heart attack. Its no less important for senior agents to have a succession plan than it is for major corporations.
For you, a successful succession can preserve the value of your practice and provide for you in retirement or for your family following your death. For your clients, it can provide the ongoing support and services necessary to help them meet long-term financial goals. And for your successor, it can greatly increase the probability of success.
With business succession planning, just as in the relay race, youre passing the baton–youre passing the responsibility for running a business and youre passing the trust, respect, and goodwill that youve cultivated with your clients. To do this successfully, try following these basic, proven steps:
1. Define your objective. Do you want to retire from your practice in 10 years? Five? Two? Do you want to keep a hand in the business or leave completely? Also, because accidents happen, be sure to address the contingency that today, tomorrow or the next day will be your last.
2. Appraise your business. Since your own assessment is necessarily biased, its a good idea to invest in a formal valuation of your practice. That way, an objective professional will have established the starting point for negotiations with your successor.
3. Find the right successor. Networking has been an important part of your business and it will be a valuable part of your search for a successor. Work with a local agency or company leadership and ask friends or business associates for suggestions and referrals. You can even use direct mail, the Internet or advertise for a successor.
