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Having a succession plan for your business will help you define your vision for why your company exists and what your target for growth will be. You need to decide if you plan to sell a portion of the business, or the entire business at some point in the future. The people who work for you will also want to know if they might aspire to become an owner inside of your business as part of their career with you. As a business leader, establishing your vision for the company and sharing that vision with your team is important.
First you need to build a viable business that is a saleable asset. If the business is not big enough, then selling a small portion of it will not be an attractive offer to any buyer. You want to build a large enough business that a small ownership in it will offer a substantial return on investment. In the process, you also don’t want to lose your controlling interest in your business by selling off too much of it. And you can decide not to offer voting right to your owners; they can be shareholders.
You also want to wait for your business to gain reasonable maturity before you start selling portions of it. Give the business time to grow and expand. This will help ensure that you will have a substantial offering. There’s a big difference in ROI between owning 10% of a million dollar company, or 10% of a 10 million dollar company. This also allows your people to know the right time in their career to consider becoming an executive director or business owner inside of your business.
Planning for succession will involve knowing what you want to accomplish, and what will need to be in place for the growth you need to occur. Consider the size of your company in 10 years, how many business partners you will need, branch offices you want to set up and how many employees you want for each of those, and evaluate the worth of your current salespeople.
Of course, you may not want to sell any part of your business at all, and that’s fine. Keep in mind, however, that your best people are likely to leave your company at some point in order to set up their own businesses elsewhere, and they can very well become your biggest competitors. So if you aren’t going to sell an interest in your company, then focus on creating great talent through hiring and training quality assistants and junior agents who can step up as your senior agents move on.
Whatever you choose to do, be clear about exactly what you want to build and how you’re going to do that as well as your proposed timeline. Also consider planning for acquisitions of other property managements to help expand your business so it is ultimately big enough to share portions of it without losing control. Structure your vision around what you are creating and who you need to have around you to help with the process. The better your planning and resources, the better your outcome will be.
I hope you’ve enjoyed this month’s Growth, Leadership and Management Tip, and I look forward to seeing you here again next month.