To Run a Successful Business, Plan For Succession
Succession planning is often overlooked when business owners are devising their strategy for success. It can feel antithetical to the goal of building a strong company to simultaneously plan for its end — or the end of your role within it. Yet according to one agency head, succession planning is essential to running a well-oiled team.
Paul Davies, CEO and founder of One Agency, wants the businesses under his banner to make a commitment to in-built succession planning.
“As we go into business ownership for all sorts of personal reasons and motivations, likewise, we exit the business for a myriad of reasons. Hopefully, the exit is a graceful one made on our terms when we’re good and ready.
However, we’ve all heard sad stories about colleagues and others that have sudden health crises, accidents, crippling divorces, or other totally unexpected and unforeseen experiences that have hugely significant impacts on their capacity to continue trading,” Mr Davies explained.
It’s his hope that fostering open and honest conversation about these realities can ensure that business owners are never left in a tight spot, and that it might help retain and foster the talents of emerging leaders coming up in their careers.
“I consider having an exit strategy an important part of any businesses’ issues, risk, and crisis management,” Mr Davies said. “Timelines must be considered a fair way out to avoid panic on a personal level and undue disruption on an office level. Don’t wait for a crisis (personal or professional) to happen,” he warned.
Moreover, Mr Davies noted that it’s important to understand what legal requirements and commitments you’ve taken on, particularly with your brand’s head office, and any office lease terms you might be liable for so that you can time any changes correctly — whether that’s winding your business down or transferring it to other hands.
“Identify your preferred exit; is it to scale back until you have just a rent roll to sell? Is there a family member or younger business partner that may be an obvious successor? If not, then consideration must be given to other potential avenues. Whether that’s to look for someone new to bring into your business,” Mr Davies noted.
There are a few key skills that he’s been able to identify over the years that make for good leadership potential.
“In my experience, if an agent has been running their own EBU successfully and exhibits signs of enjoying empowering his or her team, that is a sign I look for. Do they express an interest in other aspects of the office’s operations? Ideally, they may even have spoken about business ownership as one of their personal goals in a one-on-one session."
And for agents out there who might be fostering dreams of running a business, he urged them to consider laying the groundwork now by cultivating the qualities needed to run an operation.
“Being a successful sales agent doesn’t necessarily mean a person will be a great business owner. Running a business requires an understanding of people management and getting the best from each team member and facilitating each team member’s growth and career expectations. Plus, of course, a high degree of attention to detail and respect for compliance and the legal responsibilities of operating a real estate business,” Mr Davies explained.
He’s been pleased recently to see four agents step up to take the reins of businesses under the One Agency banner. With One Agency’s support in planning for succession, the former owners of these businesses have been able to transition away from work at a time that suited them, while offering support to their successors and helping realise these agents’ dreams of running their own business.
Mr Davies called the transfers of these businesses “[exemplary of] the effectiveness of One Agency’s model in nurturing future generations of independent business owners”.