Succession planning for your broking business

It takes a lot of hard work to build a broking business, whether you’re a finance broker, a mortgage broker or insurance broker. And while you have probably planned for all sorts of contingencies so you’re prepared for changes in the marketplace or in legislation, have you thought about the one thing that will inevitably happen to your business?

Eventually, the time will come when you’re no longer in a position, or around, to run your business. What will happen then? What will happen to your family, to your staff, to your partners, even to your clients? Have you thought about it at all? Well, you should. Planning for what will happen to your business when you retire or if you were no longer able to run your business is known as succession planning. And it should play an important role in your overall long term business plan.

Succession planning provides clear direction on the future of your business when you’re no longer willing or able to run your business. For some, their succession plan may be simply to close the brokerage. That’s fine, but there are still a lot of things you need to consider. For example, how will the assets of the brokerage be split up? Should one partner receive a higher share than another? Are the staff of the brokerage aware that this is what you intend doing? And what about your clients? Will you recommend them to another brokerage, can you sell your register, or will you just cut and run?

Who will take over?
If your idea is for your brokerage to continue on without you, there are lots of considerations. Firstly, you need to decide who will take over from you. If you run a larger brokerage, you may need to consider several successors for different roles. You may even need to consider choosing a whole new management team.

Considerations…training and communication
And once you’ve decided who will take over and in what capacity, the next step is to start training them so they can more easily slot into the position. Now one thing you must be careful of here, especially if you have a larger team with many capable people, it’s important to communicate your intentions. While you may not want to let everyone in on every aspect of your succession plan, it is important that you let all stakeholders know what your overall plans are. Otherwise, you could end up causing disharmony when others see your successors receiving what may appear to be special treatment.

Gradually give successors greater responsibility
As you show your successors the ropes, it’s important to start giving them greater responsibility too. Have them join management meetings if they don’t already do so. Take them out with you to see important clients and others who are important to your business.

Finally, make sure you communicate your succession plan to everyone impacted. That not only means staff within the brokerage, but to creditors, clients and any credit, mortgage or insurance providers you work with. By putting into place a proper succession plan now, and by communicating that plan to all affected parties, you’ll ensure a smooth transition.