Over the past 3 years, I’ve had hundreds of conversations with business owners and their trusted advisors about their exit strategy. As baby boomers turn 69 this year, some of them express the excitement and exuberance of a 29 year old as they describe the business opportunities in front of them. And it’s true! There are many wonderful opportunities. Technology and the availability of information and education is allowing people all over the world to come together in new and innovative ways to do things that were impossible to imagine just 20 years ago, and the costs have plummeted, leveling the playing field for many. On the other hand, I find many owners who are weary of the demands of running their business. Fighting fires and dealing with customer issues, employee disagreements and unprofessional behavior. The cost of doing business is going up while the payouts seem to be going down. Consolidation is happening in every industry and small agencies are getting gobbled up by bigger ones.
Agency leaders are approaching their golden years and fewer young professionals are entering the field. Take a look around at your next business gathering or your next meeting of financial service professionals. In Greensboro, NC, we are fortunate to have one of the strongest chapters of the Society of Financial Service Professionals (SFSP) in the country with over 250 members and attendance of over 150 nearly every monthly meeting, and guess what? There is a lot of gray in the room! The industry is aging, as is most every industry in the country as the boomer wave passes through.
Are you among the wired? Or among the weary?
To opt out of business when you are filled with excitement and exuberance ensures a disappointing future as you will always wonder ‘what could have been?’, and the pain of regret is often more challenging than the pain of trying and failing. If this is you and you are giddy about what you can create and how you can grow the business, it’s time to create your roadmap for success:
Excitement alone won’t grow your business. You need to partner that with a solid growth strategy. How will you reach new people, open new markets? Innovate your products or your delivery system? Create a clear competitive advantage and leverage it?
For an industry that’s been around a while, I like thinking through Jim Collin’s Hedgehog Concept in his best-selling book, ‘Good to Great’. He talks about figuring out what your company is deeply passionate about, what you can be best in the world at, and what drives your economic engine? These are great questions that form the foundation for an innovative strategy.
Surround yourself with Strong Leaders
You want to bring in and develop people who are (or can become) smarter than you, and who bring different areas of expertise. If you excel at sales, bring in someone who excels at operations. As long as you’re going to be around for a while, complement your skills and you’ll strengthen your team.
Great ideas are just that. Ideas. They mean nothing without execution. So figure out how to systematize, operationalize, standardize. Get effective AND efficient and you’ll discover you’ve got another value driver.
Does this roadmap cover everything the wired exuberant owner needs to focus on? No, but it will provide a strong foundation to build upon.
What if you’re weary?
To stick around the business, after you’ve lost your mojo, well, that doesn’t serve anyone. Your clients can sense you lost your mojo. Your employees know. And you know. If it just doesn’t hold the allure it once did, it’s time to take stock and build a ‘what’s next’ roadmap.
Acknowledge it’s Time for a Change
You know you are ready to figure out an exit. Accept that it’s ok to want to go. Nobody ever expected you to work forever. Of course your customers and employees will worry about what will happen to them when you are no longer there every day, but that doesn’t mean you don’t make a plan to go. There are always options…if you plan. There are often fewer options if you don’t.
Are there potential suitors you’d like to acquire you? Don’t assume the answer is no just because nobody has come knocking yet. Test the waters a little bit in safe and confidential ways. Awareness is amazing. We miss the hint or dismiss it as a joke. We make broad assumptions that nobody would be interested when in fact, they don’t know how to approach you. Take a look at your team. Do you have employees or family who could afford to buy you out? What about with financing and an earnout? Could they develop or hire the skills and experience needed?
Shift your Employee/Client Mindset
It’s easy to project our thinking on to other people. We anticipate our employees will run out the door if they know we are considering an exit. We expect our clients to take flight and find another agent if they even get a whiff that we may be passing the torch. We also assume that the only option is to keep our process so confidential that we are paralyzed. Might your employees leave? Yes. Might your clients find another agent? Yes. But most of the time, those extreme scenarios don’t play out…or they would have left anyway. When they do, the cause can often be traced to poor, disrespectful or total absence of communications. Most people respond well to transparency, business circumstances, and the commitment to strive for a win-win outcome.
Small Shifts – Big Difference
Whether you are giddy or weary, these small shifts can make a big difference – for your clients, employees and business, and get you what you most want. That sounds like a win – win – win – win to me!