When I look an agency owner in the eye and ask, “what’s your business succession plan?” it’s amazing what I see in their eyes.
I work with 150 or so small to mid-sized (1 employee to 150 employees) privately held agencies every year. These are smart business owners who are successfully running profitable businesses that provide a great life for themselves, their families and their employees.
These are people who make lots of right choices every day. And yet most of them (and you) have not faced the succession plan issue dead on. I think for many agency owners it feels so far down the road that they don’t worry about because they’re focusing on hotter issues.
I can’t tell you how wrong you are, if that’s what you’v been thinking. If you actually want some control over your own exit strategy — you should have a good idea of how you’d like it to play out at least a decade before you’re ready to hang it up.
Yes, a decade. The sooner you decide how you’d like your business succession plan to go, the sooner you can make decisions that increase the likelihood that it will happen the way you want.
I’ve seen agency succession plans play out in many ways over the years but the truth is, you have a limited number of options.
- You can sell your agency to an outside buyer
- You can sell your agency to an employee or group of employees
- You can just decide when you want to be done and lock the door on your way out
- You can be forced out by partners
- You can die at your desk and leave your heirs to sort it out
Other than the last two —each of these options requires that you start doing things differently years ahead of the transition. I spent a few days with an agency owner recently and based on some decisions he made about his own and the agency’s long-term future — we had to make significant adjustments to:
- How he paid himself
- How much money he left in the agency versus taking out every year
- How he engaged with clients day to day
- Getting some golden handcuffs and having some future focused conversations with key staff that would be vital to his plan
- How they promoted and talked about the agency and its offerings
If we hadn’t made those course corrections — with every decision, he would have been moving his agency AWAY from being able to handle the succession the way he wants to.
That’s the danger in not dealing with this issue. When you don’t know where you’re going, you can accidentally make decisions that serious hinder your ability to wind down your career and your agency the way you want.
I know it’s a very personal and very deep topic. But I have also watched a lot of agency owners put themselves squarely between a rock and a hard place because they waited too long.
You make great decisions every day to the benefit of your agency, your clients and yourself. Don’t let your business succession plan go for too long. Will it play out exactly how you plan it? Probably not. But you have a much better shot at making it happen if you start planning now.