Sooner or later, most agency owners want to retire. You think about it in the abstract, but very few owners actually get down to the nitty gritty and put a plan in place soon enough. There’s plenty you can do 5-10 years out to make sure you keep all your options open. Don’t wait too long!
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Hey everybody, Drew McLellan here from Agency Management Institute, coming to you again from Wilderness Lodge on Disney property in Orlando, Florida. You know, in the last week or so, two weeks maybe, I’ve probably had 8 or 10 conversations with agency owners that go something like this: “I want to wind things down. I’m ready to sell my business. I’m ready to pass it on to an internal buyer. I want to start looking for an external buyer. And what do I need to do to get my agency ready for that?” And I say, “Well, what’s your timeframe?” And I get 18 months, two years, maybe three years. And the unfortunate conversation, the uncomfortable conversation we then need to have is, “You know what? You’ve waited too long. Yes, you can absolutely get out in 18 months or two years or three years, but you’ve greatly limited your options because you’ve waited this long. You have not done the due diligence, you have not built an agency that is ready to sell, and so the odds of finding a buyer are smaller and the value you’re going to get for your agency is smaller.” So here’s what I want to tell you. I don’t care if you’re 35 or 65. I don’t care if you haven’t even thought about… You’ve just started your agency, you’re not thinking about selling it or you are thinking, “You know what? Maybe I want to wrap this up in 10 years, I want to retire,” whatever that may be. Today is the day! Today is the day you start building an agency that is attractive to a buyer. Today is the day you start running your agency by the numbers rather than by your gut. Today is the day you start learning the best practices of how to run a profitable agency. How do you put 20% or more on the bottom line year after year after year? There is no economic situation, there’s no pandemic, there is nothing that can get in the way of you doing that if you make the right choices, if you understand agency math. So, what I’m going to tell you is you need to learn what is still confusing to you. You have to embrace understanding your finances. You have to understand agency math. If you don’t, come down to our workshop, Money Matters, in December of every year in Orlando or attend our Running Your Agency for Growth and Profit in the spring of every year in Chicago. You’ve got to learn these basics of running your business by the numbers. You have to make decisions differently if you’re positioning your agency to sell. Another decision you have to make is you have to get out of the day-to-day business. You can’t be an account manager anymore, you can’t be the creative director anymore, because the reality is no one wants to buy an agency where the owner is integral to the operations of the agency. And so, again, these take years to put into play these new systems and processes and getting you out of the business so that you are really running the agency, you’re working on the agency as Michael Gerber would say, versus working in the agency. So, everybody, sooner or later. I don’t care how much you love the business. I don’t care how young you are. Sooner or later, you are going to want to be done running your agency. And ideally you’re going to want to either just close it down or you’re going to want to sell it. Now, if you know you just want to shut the door someday and be done, then don’t worry about it. But if you think that you have a younger employee who might be a great successor or you think you have an agency that has some value and you want to sell it to an outside buyer, today is the day you need to begin to think about, “How do I build my business in a way that makes it attractive to a buyer?” Don’t wait until you’re 18 months out or two years out or three years out, because now what you’ve done is you’ve limited your options. All right? So if we can be helpful, please reach out, but start thinking about today, “What do I need to do to build a business that someone would give me money for, tomorrow?” All right? I’ll see you next week.