Succession planning. For some people, it’s a distant goal, an “I’ll do it later” or “I’ll do it when I need to.” But think about this. What happens if you pass away suddenly, if you have a disability that forces you into early retirement, or if someone in your family gets sick and needs 24/7 care?

So, the answer to the question “when should I think about succession planning?” is simple.

As soon as you can.

Any kind of what-if scenario can happen and telling yourself “it can wait” is procrastination you can’t afford to take. No matter your age, whether you’re 35, 45, 55, or even 70, it’s good to have a plan. A plan ensures that your family is protected, and they continue to have a steady stream of income if you are not there running the business. It also ensures your employees will still have a job.

How you design your plan depends on your situation. Here are some suggestions.

What should I think about in terms of succession planning?

No matter the size of your business, big or small, succession planning is essential. What is it, exactly?

Succession planning is a forward-thinking practice of recognizing and creating future leaders who will take your place when you retire or if a “what-if” scenario occurs. Without a succession plan, your business will be left at the mercy of your insurers and their contracts.

Employees will leave because they’ll need a new job. Clients will leave because they’re not getting the help they need. Your residual commissions will decrease—or disappear completely.

When thinking about who you want as your successor, consider the following:

  • Is your successor aligned with your client-management philosophies?
  • What type of backup plan do they have for their business?
  • Does their business model allow them to take only your book of business or your employees as well?
    • Do they want to partner with you or buy your business outright?

What should I include in my succession plan?

When you’ve decided on that person who will fill your shoes, make sure you have your plan in mind before talking with them about it. Think about including these questions:

  • What will you be offering your successor?
  • When would the succession plan start?
  • When would the plan take effect?
  • Is there an advantage to them owning a part of your business now?

When should I execute my succession plan?

Make sure you’ve detailed your plan, have it agreed to by all parties, and executed in a campaign outline ahead of time.

What should a succession campaign look like?

Here are some possible steps in a succession campaign:

  • Meet personally with each of your clients and introduce their new team. Meeting in person will go a long way in giving them comfort with the transition.
  • Send a letter to your clients telling them a change is incoming. In the letter, mention how the transition and change will benefit them.
  • Assure your client you will continue to be involved in advice and recommendations (if you will be), so they can make the best decisions.
  • Share bios and credentials of the key officers and principals now working as part of the team.

The bottom line

You spend many years building your business, and you don’t want your hard work to go to waste. I’ve seen this happen way too many times, and it’s a sad situation when a family asks me after an unexpected event, “What can you do to help me?”

Usually my answer is, “Not much. I wish I met with you a year ago.”

You need to protect your business for your family, your clients, and your employees. At Retire with Renewals, we are here to help you do just that.

Let’s talk.