In the midst of the most active M&A marketplace that our industry has ever experienced, often times...
Three Parts to Planning for your Future
In order to best plan for the future, an agency owner must consider three main components: their business, financial and personal readiness. Of those three areas the most overlooked area is by far the owner’s personal readiness.
Many business owners have spent their lifetime working in their business, and the thought of not doing that every day is in a word - terrifying. They have no idea how they will spend their days if they are not working in the business that they have called home for most of their life. The business has become such a huge part of their identity, social life and sense of accomplishment that the thought of no longer having a part of their daily life is unthinkable. It is often the reason that so many business owners put off planning for the future of their business as they do not want to wrestle with what's next for them.
Sadly, this avoidance and lack of planning often leads to limiting their options – or worse yet – their business not realizing it full value. In order to think about what the next chapter of your life may be after you transition ownership of your agency, ask yourself some of these key questions:
- What experiences have I always looked forward to having?
- What are some ways that I would love to give back to my community, family, industry or group?
- What are some key interests or hobbies that I have never been able to commit enough time and energy to?
- Are there places that I wish to visit, people I would like to spend time with or things I have always wanted to learn more about?
For those that have spent the time and given this topic a fair amount of consideration, they are ready. The have thought about all of the things, experiences and activities that they are passion
ate about and/or bring them a great sense of peace and satisfaction.
They have hobbies, plans and a well-defined “bucket list” of items that they want to accomplish. This can include travel, volunteering, spending time with family, becoming a mentor, or even starting a different business or career.
By going through this exercise their future can start to take shape and they can answer the question of what they will need financially to be prepared to build out the next chapter of their lives. It will inform the second part of the plan which is - financial. What will I need for the next chapter?
Once your personal and financial goals have been contemplated and defined, planning for your business becomes much easier. You will be able to assess the value of your business today and combine it with the assets you have outside of your business to determine if you are well prepared to retire successfully. For some, they may determine that there is a gap between the assets that they have today plus their current business value and what they need to retire. For many, once they have defined this gap, it can serve as the roadmap for you to grow your agency's value an create the future you have envisioned for yourself. It may also help you determine and define the options you will consider for the transition of your agency.
Without considering your personal, financial and business readiness, your plan is incomplete and increase the likelihood of making decisions that are uninformed and ones that you may ultimately regret. For more information about planning for your future, visit www.agency-focus.com.